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Philip Morris International Spinning-off!!!

Philip Morris International and Altria are breaking up!  Why is this news?  And why should Catalyst be all over this?  Let us explain . . .

So, there's Altria, the parent company of Philip Morris USA and Philip Morris International.  Kraft Foods used to be under the Altria umbrella as well, but they spun-off last year.  Just this week Altria announced that Philip Morris International (PMI) will be spinning-off on March 28 to become its own independent entity.  PMI will continue to maintain its headquarters in  Lausanne, Switzerland.  Altria will move its headquarters from New York City to Richmond, Virginia, where Philip Morris USA (PM USA) is based.

So why, after all these years, does PMI need to head off on its own?  Why can't Altria, PM USA and PMI be one big happy US-based family?  Much of the news coverage of the spin-off suggests that PMI is hoping to avoid litigation and public relations pressure around tobacco marketing in the US.  Ultimately, as Business Week noted in an article this week, this means that PMI "will be able to pursue new products that would be off-limits in the US."  ANd the Wall Street Journal comments, The move would free the tobacco giant's international operations of legal and public-relations headaches in the U.S. that have hindered its growth. The separate entity, for example, would be exempt from U.S. tobacco regulations and out of reach of American litigators. Importantly, its practices would no longer be constrained by American public opinion, paving the way for broad product experimentation."

What kind of experimentation?  Well, current PMI Chief Executive André Calantzopoulos, who will become President of PMI after the transition, was more than willing to share information on new products and product development in an interview with the Wall Street Journal.  There's Marlboro Intense: "the product has been shrunk down by about a half inch, and offers smokers seven potent puffs apiece, versus the average of eight or so milder draws."  And then there's Marlboro Mix 9, which they are already marketing in Indonesia, and planning to expand to other Southeast Asian markets this year.  It's a high-nicotine, high-tar cigarette infused with cloves. The Wall Street Journal comments "To appeal to customers in some emerging markets, the company is making sweet-smelling cigarettes that contain tobacco, cloves and flavoring -- with twice the tar and nicotine levels of a conventional US cigarette."

Hmmmm . . . SWEET-smelling, cloves and FLAVORING . . . why does that sound familiar?  Oh, that's right, the tobacco industry has been saying for years that sweet flavors are a great way to attract young customers!  "It's a well-known fact that teenagers like sweet products.  Honey might be considered."  Brown & Williamson memo, 1972. 

Want to find out more about the PMI split and what you can do to take action? Visit http://www.philipmorrisbreakup.org/ for more!

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philip morris PMI international sweet flavor global