Philip Morris International

Philip Morris International Inc.
Public
Traded as
Industry Tobacco
Founded 1847 (1847)
Headquarters New York City, New York, US
Area served
 Worldwide (excluding the United States)
Key people
 Louis Camilleri (Chairman)
André Calantzopoulos (CEO)
Products Cigarettes, cigars, Codentify, fine-cut rolling tobacco, snuff, rolling papers and tubes
Revenue Increase US$ 78.098 billion (2017)[1]
Increase US$ 11.503 billion (2017)[1]
Decrease US$ 6.341 billion (2017)[1]
Total assets Increase US$ 42.968 billion (2017)[2]
Total equity Increase US$ -10.230 billion (2017)[1]
Number of employees
 ~80,600 (2017)[1]
Subsidiaries Sampoerna
PMFTC, Inc.
Rothmans, Benson & Hedges
Papastratos Philip Morris International
Website www.pmi.com

Philip Morris International Inc. (PMI) (NYSE: PM) is an American multinational cigarette and tobacco manufacturing company, with products sold in over 180 countries outside the United States. The most recognized and best selling product of the company is Marlboro.[3]

Until a spin-off in March 2008, Philip Morris International was an operating company of Altria Group. Altria explained the spin-off, arguing PMI would have more "freedom" outside the constraints of US corporate ownership in terms of potential litigation and legislative restrictions to "pursue sales growth in emerging markets.", while Altria focuses on the United States.[4] The shareholders in Altria at the time were given shares in PMI, which was listed on the London Stock Exchange and other markets.

The company's operational headquarters are in Lausanne, Switzerland, although the corporate headquarters remain in New York. It does not operate in the United States; Philip Morris USA, a subsidiary of PMI's former owner Altria, owns the Philip Morris brands there.

With tobacco being addictive and the single greatest cause of preventable death globally,[5] the company is highly controversial. It has been the subject of litigation and restrictive legislation from governments.

With the world-wide decrease in smoking in the 21st century, shares of Philip Morris were no longer considered the "safe haven" they once were.[6]

History

Early development

The company states its history is traced to a London tobacconist, Philip Morris, opening a single shop on London’s Bond Street in 1847 which sold tobacco and cigarettes.[7][8] In 1881, Philip Morris' son, Leopard Morris, established the "Philip Morris & Company and Grunebaum, Ltd" with Joseph Grunebaum.[3] In 1885, the company changed its name to "Philip Morris & Co., Ltd". [3]

In 1894, William Curtis Thomson and his family began to control the company, and in 1902 the company was incorporated in New York.[3] In 1919, the company was acquired in the United States and was incorporated as "Philip Morris & Co., Ltd, Inc." in Virginia.[3]

Later development

In 1954, Philip Morris (Australia) became the first affiliate of Philip Morris & Co., Ltd, Inc. outside the U.S. In 1972, the company's Marlboro became the world's top-selling cigarette brand.[3]

In 1987, Philip Morris International (PMI) was incorporated as an operating company of Philip Morris Companies Inc.[3] In 2001, the operations center of the company was transferred from Rye Brook, New York, to Lausanne, Switzerland.[3][9] On January 27, 2003, Philip Morris Companies Inc. formally changed its name to the Altria Group.[10] In March 2008, Philip Morris International was spun off from Altria.[11]

In April 2014, Philip Morris International announced that it would close its Moorabbin plant in Australia by the end of 2014 after operating for 60 years, due to the gradual decline of sales in the last ten years and difficulties conforming to 2010 Australian government regulation about reducing fire risks.[12] In 2015, the company sold 850 billion cigarettes,[13] and it ranks 17th among the most valuable tobacco brands of 2017 on BrandFinance website.[14]

Brands

Philip Morris factory in Russia

Philip Morris International has six multi-billion US$ brands including:

  1. Dji Sam Soe 234 was launched in 1913 and is a brand of Kretek cigarettes. It is the best seller of Kretek cigarettes in Indonesia.
  2. L&M was launched by Liggett & Myers in 1953 with the tagline: "American cigarettes of the highest quality with the best filter." L&M variants include full flavor shorts, full flavor 100s, lights, ultra lights, menthol shorts, menthol 100s, menthol light shorts, menthol light 100s, Turkish Blend shorts, Turkish Blend 100s, and L&M Mild Kretek.
  3. Longbeach include in Australia and Indonesia in 1999. Longbeach variant include: Longbeach Filter and Longbeach Mild.
  4. Marlboro was launched in 1904. Marlboro is the premium brand. Marlboro variants include: Marlboro Special, Marlboro Menthol, Marlboro Lights, Marlboro Lights Menthol, Marlboro Mix-9 Filter Kretek, Marlboro Flavor Plus, Marlboro Black Menthol, and Heatsticks, a heated tobacco product.[15]
  5. ST Dupont Paris is the brand cigarette designed by Simon Tissot Dupont in 1902. With the black packaging. ST Dupont Paris variants include: filter, lights, menthol, and menthol lights.
  6. U Mild was launched in Indonesia in 22 May 1998 after Indonesian revolution. U Mild is a Mild Kretek cigarette sold in Indonesia.

Its main brands are Dji Sam Soe 234, L&M, Longbeach, Marlboro, Minak Djinggo, ST Dupont Paris, U Mild, Philip Morris, Red and White, Basic, Bond Street, Chesterfield, Parliament, Lark, Merit, Morven Gold, Muratti, Skjold, Good Companion, Multifilter, Virginia Slims, IQOS, Benson & Hedges (with British American Tobacco, Gallaher Group, and Japan Tobacco), Escort (with British American Tobacco and Imperial Tobacco), John Player & Sons (with British American Tobacco and Imperial Tobacco), and Peter Stuyvesant (with British American Tobacco and Imperial Tobacco).

Local brands include: Rym, Gauloises (with Imperial Tobacco), Dji Sam Soe 234, L&M, Longbeach, Marlboro, Minak Djinggo, ST Dupont Paris, U Mild, Nassim, and Winston (with Japan Tobacco) (Algeria), Philip Morris and Marlboro (Argentina), Marlboro and L&M (Belgium), Marlboro, L&M, Shelton, Dallas, Muratti, Luxor, Sampoerna A, Chancellor, and Fortuna (Brazil), Marlboro, Parliament, Muratti, Assos, L&M, Eve, and Virginia Slims (Bulgaria), Benson & Hedges (with British American Tobacco, Gallaher Group, and Japan Tobacco), Belmont, Craven A, Rothmans International (with British American Tobacco), Canadian Classics, Number 7, Accord, and Mark Ten (Canada), Marlboro (China), Boston, Caribe, Green, Derby, Marlboro, Pielroja, and American Gold (Colombia), Derby, Marlboro, and Next (Costa Rica), Marlboro, L&M, and Skjold (Denmark), Nacional, Marlboro, Next, and Lider (Dominican Republic), Marlboro, Líder, Lark, and Philip Morris (Ecuador), L&M, Marlboro, Next, and Merit (Egypt), L&M, Next, and Marlboro (Estonia), Marlboro and ST Dupont Paris (France), Marlboro (Finland), Marlboro, L&M, and F6 (Germany), Marlboro, Wismilak Diplomat (with Japan Tobacco), Rubios, and Lider (Guatemala), Marlboro, Virginia Slims, Multifilter, and Bond Street (Hungary), Dji Sam Soe 234, L&M, Longbeach, Marlboro, ST Dupont Paris, Sampoerna A, and U Mild (bold font meaning Philip Morris International's main brands) (Indonesia), Marlboro, Merit, Philip Morris, Chesterfield, Virginia Slims, and Diana (Italy), Marlboro, Lark, Parliament, Philip Morris, and Virginia Slims (Japan), Marlboro, Parliament, L&M, Bond Street, Astra, Prima, Polet, Medeo, Kazakhstanskye, and Souz Apollon (Kazakhstan), Marlboro, Parliament, Chesterfield, L&M, Bond Street, and Red & White (Latvia), Marlboro, Bond Street, Merit, Chesterfield, Virginia Slims, and Parliament (Lebanon), Marlboro, L&M, Chesterfield, Parliament, Bond Street, Red & White, and Partner (Lithuania), Dji Sam Soe 234, L&M, Longbeach, Marlboro, ST Dupont Paris, and U Mild (Philip Morris International's main brands) (Malaysia), Marlboro, Delicados, Benson & Hedges (with British American Tobacco, Gallaher Group, and Japan Tobacco), Faros, Elegantes, and Chesterfield (Mexico), Fortuna, Gauloises (with Imperial Tobacco, Marlboro, and Marquises, (Morocco), Chesterfield, L&M, and Marlboro, (Netherlands), Philip Morris Red.

The Sampoerna products include Sampoerna A Kretek Teman Yang Asyik (English : Passionate Friends), Sampoerna A Kretek Yang Spesial (English : Most Special), Sampoerna Hijau, Go Ahead (A Mild, Avolution, A Flava Click Mint), Sampoerna A King Size, Sampoerna A International, Sampoerna A Medium, Sampoerna A Exclusive, Sampoerna A King, Sampoerna A Menthol, Sampoerna A Slims, Sampoerna X-Tra, Sampoerna Classics, and Sampoerna Special Edition Millennium 2000.

The Bentoel Group products on 1980–2005 include Bentoel Biru, Bentoel Sejati, Bentoel Merah, Bentoel Mild, Star Mild, X Mild, Rawit, Pr1nsip, and Country.

PMFTC, Inc.'s products include Champion, Fortune, and Hope.

Board of directors

Information from company website.[16]

Research

PMI claims to have a research and development program. Investment has been made to reduce the levels of toxic chemical compounds, such as iQOS, a heat-not-burn tobacco product. [17]

In 2018, Philip Morris will focusing their next investment of 290 million euro with the start of building a new manufacturing in Dresden (Germany) to produce tobacco sticks (cigarettes) for iQOS.[18]

Responding to Philip Morris starting the Foundation for a Smoke-Free World in 2017, the American Cancer Society stated, "This attempt by Philip Morris International to paint itself as a public health partner is manipulative and dangerous. It is a new twist out of the tobacco industry’s deadly playbook, but nobody should be fooled. It’s a continuation of a decades-long effort to paint over tobacco’s role in spreading death and misery around the globe."[19]

Controversies

Australia

The Australian Government announced it would introduce "Tobacco Plain Packaging Laws" on 29 April 2010. Philip Morris International (PMI), arranged for its wholly owned Hong Kong subsidiary Philip Morris Asia (PMA) to 'takeover' two Australian subsidiaries - Philip Morris Australia Limited and Philip Morris Limited on 23 February 2011. In June 2011, Philip Morris International announced that it was using ISDS provisions in the Australia-Hong Kong Bilateral Investment treaty (BIT) to demand compensation for Australia's plain cigarette packaging anti-smoking legislation.[20] It was one of several tobacco companies to launch legal action against the Australian Government.[21] British American Tobacco, Philip Morris, Imperial Tobacco and Japan Tobacco International are taking the Australian government to the High Court of Australia to try to stop the elected government of Australia from introducing plain packaging for tobacco products. The government is doing this to lower the rate of deaths related to smoking.

Two challenges to the tobacco plain packaging legislation were heard by the High Court of Australia between 17–19 April 2012: 'British American Tobacco Australasia Limited and Ors v. Commonwealth of Australia' and 'J T International SA v. Commonwealth of Australia'.

On 15 August 2012, the High Court handed down orders for these matters, and found that the Tobacco Plain Packaging Act 2011 is not contrary to s 51(xxxi) of the Constitution. On 5 October 2012, the Court handed down its reasons for the decision. By a 6:1 majority (Heydon J in dissent) the Court held that there had been no acquisition of property that would have required provision of 'just terms' under s51(xxxi) of the Constitution.[22]

On 18 December 2015, the Tribunal instituted by the United Nations Commission on International Trade Law (UNCITRAL) issued a unanimous decision (3-0) agreeing with Australia's position that the Tribunal has no jurisdiction to hear PMA's claim. This was due to the fact that PMI used its wholly owned subsidiary PMA to takeover the Australian-based PM subsidiaries in order to specifically sue the Australian Government for bringing in plain packaging laws. PMI was unable to do this itself as the Australia-United States free-trade agreement signed in 2004 did not have any investor-state dispute settlement clauses included - by design.[22]

In 2017, the Dispute Settlement Body of the World Trade Organization supported Australia's right to enforce plain packaging.[23] In 2017, PMI was instructed to pay the Australia government's legal costs, an estimated 50 million dollars.[24]

In March 2018, the Tobacco giant announced that it will cut 150 jobs as part of a major restructure. Tammy Chan, the managing director in Australia, said more efficient ways to deal with retailers were introduced based on digital technology development. [25]

European Union

In 2004, Philip Morris and the European Union reached an agreement according to which Philip Morris would pay $1.25bn until 2016 to end a lawsuit over smuggling charges[26].

Norway

Philip Morris also sued Norway over the country's ban on displaying tobacco products in stores. It lost the case in 2012.[27]

Uruguay

In 2010, the company lobbied against Uruguay's strong anti-smoking laws[28] and filed a complaint against the country (Philip Morris v. Uruguay) under the Switzerland-Uruguay bilateral investment treaty.[29] On 8 July 2016, the International Centre for Settlement of Investment Disputes ruled in favour of Uruguay.[30]

United Kingdom

In August 2014, the company foreshadowed legal action against the Government of the United Kingdom if it went ahead with plans to introduce plain packaging. In a submission to the government, Philip Morris International said it would seek compensation running into "billions of pounds," if the proposed legislation went ahead.[31]

IQOS

In 2017, according to two editors of the journal JAMA Internal Medicine, after publication of a research letter describing harmful chemicals in heat-not-burn tobacco products, people from Philip Morris International contacted the institutions where the researchers worked and questioned the methods used in the study; the editors described this as a form of "pressure to suppress discourse that could harm commercial interests".[32]

In December 2017, Reuters published documents and testimonies of former employees detailing irregularities in the clinical trials conducted by Philip Morris International for the approval of the IQOS product by the FDA.[33]

Other

From the 1970s to the late 1990s, Phillip Morris along with British American Tobacco, was involved in campaigns to undermine bans against smoking in Muslim majority countries by branding Muslims who opposed smoking as a "'fundamentalist’ who wishes to return to sharia law," and be "a threat to existing government as” according to leaked documents.[34] A 1985 report from Philip Morris squarely blamed the World Health Organization: “This ideological development has become a threat to our business because of the interference of the WHO [...] The WHO has not only joined forces with Moslem fundamentalists who view smoking as evil, but has gone yet further by encouraging religious leaders previously not active anti-smokers to take up the cause."[34] Philip Morris has refused to comment on these findings.[34]

Philip Morris International has announced an overhaul of its human rights protections of tobacco workers in Kazakhstan and 30 other countries after critical reports.[35]

The company runs an information web site outlining the health issues of tobacco. However, it has been criticised in an article in the journal Public Health Nursing as merely a "public relations effort" intended to "undermine public health".[36]

In the 1930s, the company's tobacco advertisements were a steady source of income for numerous medical organizations and journals, including the New England Journal of Medicine (NEJM) and the Journal of the American Medical Association (JAMA).[37]

In February 2015, John Oliver highlighted the company's many international legal cases on an episode of his television show Last Week Tonight. He also attempted to raise awareness for his campaign using the hashtag #JeffWeCan.[38]

Sponsorship

Marlboro sponsored Ferrari Racing Team on 2006 Bahrain Grand Prix.

The company says that it gives $25 million per year to charitable causes including domestic violence, emergency housing, education, combating poverty and teaching sustainable agriculture techniques in Africa.[39]

Philip Morris Sports

Philip Morris is a long-term main sponsor of the Formula One team Scuderia Ferrari.[40] The sponsorship is subliminal in the logo these days due to restriction in tobacco sponsorship, but Marlboro-branded Ferrari and McLaren cars won several world titles with famous drivers such as Alain Prost, Ayrton Senna and Michael Schumacher. Philip Morris also sponsored several title winners in MotoGP in road racing and Indy Cars. The Ferrari Formula One deal before direct sponsorships was banned was estimated to be worth £45 million a year as well as paying the multi-million salary of Schumacher.[41] The current deal is estimated to be even more lucrative, in spite of its logo not being legally allowed to be displayed on the car.[42]

References

  1. 1 2 3 4 5 "US SEC: Form 10-K Philip Morris International Inc" (PDF). United States Securities and Exchange Commission. Retrieved 28 March 2018.
  2. ↑ "US SEC: Form 10-K Philip Morris International Inc". United States Securities and Exchange Commission. Retrieved January 12, 2018.
  3. 1 2 3 4 5 6 7 8 "Key Milestones". www.pmi.com. Retrieved 2018-07-20.
  4. ↑ "Altria to spin off Philip Morris International". AP/MSNBC. 29 August 2007. Retrieved 19 December 2011.
  5. ↑ WHO Report on the Global Tobacco Epidemic, 2008: the MPOWER package (PDF). Geneva: World Health Organization. 2008. ISBN 978-92-4-159628-2.
  6. ↑ Felsted, Andrea (27 September 2018). "Has the Marlboro Man Gasped His Last?". Bloomberg. Archived from the original on 27 September 2018.
  7. ↑ "Philip Morris Companies Inc. - Company Profile, Information, Business Description, History, Background Information on Philip Morris Companies Inc". www.referenceforbusiness.com. Retrieved 2018-03-30.
  8. ↑ "Philip Morris International on the Forbes Global 2000 List". Forbes. Retrieved 2018-07-20.
  9. ↑ "Where to find us." Philip Morris International. Retrieved on 19 October 2009.
  10. ↑ Smith, Elizabeth A.; Malone, Ruth E. (April 2003). "Altria Means Tobacco: Philip Morris's Identity Crisis". American Journal of Public Health. 93 (4): 553–556. ISSN 0090-0036. PMC 1447789. PMID 12660196.
  11. ↑ "Altria - Investors - Press Release". investor.altria.com. Retrieved 2018-07-20.
  12. ↑ Michael Janda. "Philip Morris to quit Australian cigarette manufacturing". Retrieved 9 September 2014.
  13. ↑ "Cigarettes: Smoke signals".
  14. ↑ http://www.include-digital.com, Include -. "Best Global Brands | Brand Profiles & Valuations of the World's Top Brands". brandirectory.com. Retrieved 2018-03-30.
  15. ↑ Felberbaum, Michael (26 June 2014). "Philip Morris Int'l to Sell Marlboro HeatSticks". Richmond, Virginia: ABC News. AP. Retrieved 28 June 2014.
  16. ↑ "Board of Directors". Retrieved 14 August 2018.
  17. ↑ Lasseter, Tom; Bansal, Paritosh; Wilson, Thomas; Miyazaki, Ami; Wilson, Duff; Kalra, Aditya. "Scientists describe problems in Philip Morris e-cigarette experiments". Reuters. Retrieved 2018-03-30.
  18. ↑ "Erhitzen-nicht-verbrennen".
  19. ↑ "American Cancer Society Statement on Philip Morris International Support of New Effort". American Cancer Society. 2017.
  20. ↑ Klya Tienhaara and Thomas Faunce Gillard Must Repel Big Tobacco's Latest Attack. Archived 7 August 2011 at the Wayback Machine. Canberra Times 28 June 2011
  21. ↑ "Plain packaging challenge faces High Court". ABC News. Retrieved 12 July 2012.
  22. 1 2 Australian Government Attorney-Generals Department Archived 29 November 2015 at the Wayback Machine., retrieved 20 December 2015
  23. ↑ "Australia wins landmark tobacco WTO packaging case, reports". The Sydney Morning Herald. 5 May 2017. Retrieved 9 July 2017.
  24. ↑ Gartrell, Adam (9 July 2017). "Philip Morris ordered to pay Australia millions in costs for plain packaging case". The Sydney Morning Herald. Retrieved 9 July 2017.
  25. ↑ Toscano, Nick (2018-03-06). "Cigarette giant Philip Morris slashes Australian workforce". Canberra Times. Retrieved 2018-03-30.
  26. ↑ Tran, Mark (July 9, 2004). "Philip Morris reaches $1.25bn EU agreement". theguardian.com. The Guardian. Retrieved March 22, 2018.
  27. ↑ "Norway: Prohibition on the visible display of tobacco products at the points of sale". WHO.
  28. ↑ Carroll, Rory (27 July 2010). "Uruguay bows to pressure over anti-smoking law amendments". The Guardian. Retrieved 9 July 2017.
  29. ↑ BBC (12 March 2010). "Tabacalera Philip Morris demanda a Uruguay" (in Spanish). Retrieved 15 November 2010.
  30. ↑ "Phillip Morris loses tough-on-tobacco lawsuit in Uruguay". Reuters. 8 July 2016. Retrieved 9 July 2016.
  31. ↑ "Plain cigarette packing plan sees Philips Morris threaten legal action". London Mercury. 12 August 2014. Retrieved 14 August 2014.
  32. ↑ Katz, MH; Redberg, RF (6 November 2017). "Science Requires Open Discourse". JAMA Internal Medicine. doi:10.1001/jamainternmed.2017.5763. PMID 29114738.
  33. ↑ Lasseter, Tom; Bansal, Paritosh; Wilson, Thomas; Miyazaki, Ami; Wilson, Duff; Kalra, Aditya (December 20, 2017). "Scientists describe problems in Philip Morris e-cigarette experiments". Reuters.
  34. 1 2 3 Boseley, Sarah (20 April 2015). "How tobacco firms tried to undermine Muslim countries' smoking ban". The Guardian. Retrieved 5 February 2017.
  35. ↑ Philip Morris International Overhauls Labor Protections. Human Rights Watch, 22 May 2011.
  36. ↑ Elizabeth A. Smith and Ruth E. Malone, R.N., F.A.A.N. (2008), "Philip Morris's Health Information Web Site Appears Responsible but Undermines Public Health", Public Health Nurs., 25: 554–64, doi:10.1111/j.1525-1446.2008.00743.x, PMC 2794243, PMID 18950420
  37. ↑ Martha N. Gardner & Allan M. Brandt (2006), "The Doctors' Choice Is America's Choice", Am J Public Health, 96: 222–32, doi:10.2105/AJPH.2005.066654, PMC 1470496, PMID 16434689
  38. ↑ "#jeffwecan Campaign Launch". John Oliver Last Week Tonight.
  39. ↑ "Our Charitable Giving Program". PMI. Retrieved 19 December 2011.
  40. ↑ "Philip Morris International". Scuderia Ferrari. Retrieved 30 March 2015.
  41. ↑ Day, Julia (23 February 2001). "Philip Morris strengthens Ferrari ties". The Guardian. Retrieved 31 March 2015.
  42. ↑ ESPN F1 Staff (14 June 2011). "Ferrari extends deal with tobacco company Philip Morris". Retrieved 31 March 2015.
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