George Margonis, the General Manager of Philip Morris Bulgaria, on the biggest change in the history of the tobacco industry
Probably the most impressive things we experience nowadays when we watch period movies and TV series, like Mad Men, is not the vintage fashion or the dated technology. It is watching all those people smoke. We are living in a world that is rapidly parting with the smell of burning tobacco, and with the health risks it brings. Astonishingly, one of the agents of change is a tobacco company. Philip Morris International is now building a smoke-free future, says George Margonis. He has almost 17 years of experience in the company, and in 2016 he became the general manager of its Bulgarian branch.
The tobacco industry is changing. How is Philip Morris addressing this? What changes have you implemented and what is your ambition for the future?
Nowadays, we all are participating in a consumer-led and technology driven product revolution, one that has the potential to improve people's quality of life, and Philip Morris International (PMI) is part of this process. We are glad that our company is leading the biggest shift in the history of the tobacco sector, and that we are driving the transformation of the industry with the development of smoke-free alternatives with the potential to make a difference for the millions of men and women who smoke.
The history of tobacco trade dates back 500 years. In recent years public health experts, scientists and smokers have been looking for less harmful alternatives that could reduce health risks and benefit society at large. Today, many health experts agree that although nicotine is addictive, the main cause of smoking related diseases are the harmful chemicals generated by burning tobacco. The progress of technology and science today is helping to eliminate burning and provide millions of adult smokers around the world a new chance to enjoy tobacco by heating it, instead of burning.
Today, the harm reduction concept is supported by many public health experts around the world and some authorities in a number of countries are open to the idea that smokers, who cannot or do not want to stop smoking, should be provided with better alternatives than traditional cigarettes.
For more than a decade, we at PMI have focused our efforts and resources on the research and development of such better alternatives – innovative products that have the potential to reduce risk for adult smokers in comparison with continued smoking. There could hardly be a more ambitious and challenging goal for a leading tobacco company than to develop smoke-free products to replace cigarettes. This is our mission, and to put it into practice we have invested over $4.5 billion and involved more than 400 scientists, engineers and other experts to develop and assess our smoke-free products at the company's R&D facilities in Switzerland and Singapore. This reaffirms our full commitment towards designing a smoke-free future.
Is smoke-free future possible and will smoke-free products replace cigarettes one day?
Innovations and new technologies are driving rapid changes in every aspect of economy and everyday life. Society's and consumers' expectations also change rapidly and therefore the tobacco industry has to adapt to meet adult consumer's needs for better reduced risk alternatives. It is very important to underline that our smoke-free products are not safe or risk-free. We also state clearly that the best way to reduce harm is to quit or never to start smoking.
We strongly believe that our vision of a smoke-free future will be achieved using the principles of harm reduction. Some public health experts, authorities and regulators share the opinion that harm reduction concept can complement the existing tobacco control measures by making reduced risk alternatives available to the current adult smokers, who would otherwise continue to smoke. Bulgarian authorities, just like many others in the EU, have also progressed in this direction by creating a specific fiscal framework for the heated tobacco products. We at PMI believe that this is the right course of development for the whole industry to move towards a smoke-free future.
It is encouraging that so far close to 5 million adult smokers around the world have stopped smoking and have switched to our innovative heated tobacco product IQOS. According to the latest data we have, approximately 10,000 smokers switch to IQOS every day. Since the end of last year Bulgaria is also part of the smoke-free journey together with 37 other markets, and Bulgarians have now access to revolutionary smoke-free products. So far the results for our heat-not-burn products from around the world are encouraging. In most of the markets where IQOS was launched, 70% to 80% of the smokers who purchased it, have fully or predominantly switched to it. This is very important – in order to reduce harm we need to offer not only products that have the potential to reduce risk, but at the same time the products that satisfy adult consumers' needs and are well perceived by them. The encouraging results reached so far give us the hope that one day we can phase-out conventional cigarettes. The significant investments in R&D and over 10 years in scientific research behind our smoke-free products confirm our commitment towards this vision, and we are confident that one day these products can completely replace cigarettes.
What does science say about smoke-free alternatives to cigarettes?
Our smoke-free products are the result of robust scientific research in our complex multi-level scientific programme. Our scientific research is conducted following the highest international standards and it brings encouraging results on the reduced risk potential of the smoke-free products compared to cigarettes.
Our own research and that of independent researchers confirm that there are significantly fewer harmful chemicals in IQOS vapour compared to cigarette smoke. Our toxicological assessment reveals that IQOS aerosol is significantly less toxic compared to cigarette smoke. Our clinical studies are ongoing, but results so far point in the direction of harm reduction. Encouragingly, in December last year, the UK Committee on Toxicity reviewed our research data in its assessment of IQOS and stated that the exposure to compounds of concern in using heat-not-burn tobacco products is reduced compared to that from conventional cigarette smoke and it is likely that there is a reduction in overall risk to health for conventional smokers who switch to heat-not-burn tobacco products. Public Health England relied in part on the committee's review for its report published earlier this year. Scientific substantiation takes time of course. We continue further research and development and have made our data available on our website www.pmiscience.com, and we encourage independent scientific verification by third parties.
Last month Scuderia Ferrari announced that they will continue their partnership with Philip Morris International. Could you tell us more about this collaboration?
Indeed, after 40 years of successful collaboration with Scuderia Ferrari, we have decided to extend our partnership until 2021 with an exclusive focus on our vision to advance a smoke-free world. Our plan does not include any product-specific communications. We believe that this is a great opportunity to create global awareness on the idea of a smoke-free world, in which all people who would otherwise continue smoking cigarettes will switch to scientifically substantiated less harmful smoke-free alternatives. We are fully committed towards this idea and we will use all available resources, including our motorsports related activities, to accelerate momentum around this revolutionary change for the benefit of people who smoke, public health and society at large. We deeply appreciate Scuderia Ferrari's support in this cause, and we believe that this is the best partner for this challenge, as it harnesses a pioneering spirit, science, technology and innovation in a relentless pursuit of great ambitions.
The material was conducted with the cooperation of Philip Morris Bulgaria