26 January 2023
The ASEAN region’s 125 million smokers present a lucrative market for the world’s largest transnational tobacco company, Philip Morris International (PMI), which is set to increase its business in 2023. PMI has the most (20 out of 39) manufacturing facilities located in South East Asia and significant share of the cigarette market (Table 1), especially in Philippines, Singapore, Thailand and Indonesia.
Table 1: PMI market share in select ASEAN countries*
*SEATCA TobaccoWatch: https://tobaccowatch.seatca.org/index.php/2016/09/26/ti-market-share-2/
The Philippines has about 14 million smokers who smoke more than 180 million sticks daily. Smoking among adolescents (13-15 years) remain a big problem with about 15% boys and 5% girls smoking. Tobacco advertising at retails outlets is still allowed and single cigarette sticks are sold for as little as 5 Pesos making it easily accessible to minors and the poor. 5 Pesos can buy a small piece of cake or a cup of juice in the Philippines.
While publicly promoting a corporate transformation of going “smoke-free” and switching to heated tobacco products (HTPs), PMI’s local affiliate, Philip Morris Fortune Tobacco Corp (PMFTC) relaunched its Marlboro cigarettes recently by sponsoring new branded signboards for sari-sari stores in many cities in the Philippines (Figure 1). Posters also advertise special promotion of single stick sales costing as little as 5 -8 Pesos.
Figure 1: Philippines: New sponsored Marlboro signboards and single stick promos at sari-sari stores
|Dauis-Panglao Road, Lourdes, Panglao, Bohol||Javier Road, Alulod, Indang, Cavite|
|PMFTC single sticks promotions, 5–8 Pesos per stick, in Cavite||PMFTC promotion of single sticks, Cavite|
Photo: Courtesy of SEATCA
While the government of the Philippines is making efforts to reduce tobacco use among its people, PMI is enjoying a lucrative cigarette business with two manufacturing factories and 40 sales offices throughout the archipelago, claiming to sell seven out of the top 10 best-selling cigarette brands.
In 2020, PMI launched its HTP brand, IQOS in Manila. Although IQOS is touted as smoke-free, it still uses tobacco which contains nicotine which is addictive. Besides, HTPs emit pyrolysis products such as volatile aldehydes; therefore, these aerosols are clearly within the scientific definition of “smoke”.
PMI recently announced it will invest USD 150 million in setting up 2 new manufacturing facilities to produce HTPs to sell in the domestic market and for export. Currently, the Philippines exports tobacco/cigarettes to India, Pakistan and Malaysia, among others.
Indonesia, with its 65 million smokers and a large number of child-smokers, is an attractive cash cow for PMI. About 17 million youth (10-19 years) start smoking every year. PMI’s Indonesian subsidiary, PT HM Sampoerna has more than 30% (Table 1) of local cigarette market share. Sampoerna has been found promoting to minors, selling cigarettes near schools and supporting front groups to oppose tobacco control measures. Indonesia remains the only Asian country that has not ratified the tobacco treaty, WHO FCTC, and still allows tobacco advertising and sponsorship of sports and other popular events.
Despite the tobacco epidemic, more tobacco products have been introduced into the country. Sampoerna’s HTP factory in Karawang, West Java,the first in the ASEAN region, started production of IQOS in 2022. It is purposed for domestic use as well as export. IQOS is sold in major cities including Jakarta, Surabaya, Denpasar, Bandung, Medan, Pekanbaru, Palembang, Makassar, Balikpapan and Samarinda.
The Indonesian Coordinating Minister for Economic Affairs who inaugurated at the Sampoerna factory endorsed the investment as having a positive impact in encouraging innovation and creating economic value in many sectors. Unfortunately, tobacco’s devastating impact on the people (260,000 deaths annually) has taken a back seat in this economic view. Indonesian’s annual spending on cigarettes is 11 times the average expenditure on health. The direct and indirect cost smoking of 21 tobacco related diseases is about USD40 billion.
Thailand’s smoking prevalence has been steadily declining to the current level of about 19% (10 million smokers). Thailand has stringent tobacco control measures, compliant with the WHO FCTC, and has imposed a ban on e-cigarettes and HTPs. PMI which has a 40% local market share of cigarettes, has been trying to reverse the ban including lobbying the Ministry of Commerce and the Excise Department and accept its HTPs.
Switching from one tobacco product to another is not the solution to ending the tobacco epidemic. According to WHO, tobacco use in any form is harmful. The 570,000 tobacco related deaths every year in the ASEAN region – which are preventable – is a tragedy that must be reversed. The ASEAN region must do all they can to end tobacco use in any form.
For more information: https://tobaccowatch.seatca.org/