A UK business that makes products to treat lung problems might end up in the hands of one of the world's largest cigarette manufacturers, prompting health organisations to call on the British government to oppose the deal.&nbsp;

The tobacco firm that created the 'Marlboro Man' has stirred uproar in medical circles with a move to invest in a business that develops inhaler technology, potentially allowing it to profit from the smoking-related lung ailments it helped create.

Philip Morris International is in the process of acquiring Vectura, a UK company that specialises in lung disease inhaler technology.

An open letter signed by 35 health charities and public health experts urged Vectura board members to reject a takeover bid by Philip Morris International. Signatories of the letter, led by Asthma UK and the British Lung Foundation, said a deal “could significantly hamper Vectura’s research and product development capabilities.”

The deal would boost the tobacco giant's ambition to generate more than half of its net revenue from smoke-free products such as e-cigarettes and respiratory drugs within four years, up from about a quarter today.&nbsp;

For firms like Novartis and GlaxoSmithKline, Vectura has produced 13 inhaled medicines to treat respiratory disorders like asthma.

It is presently collaborating with Inspira Pharmaceuticals, another UK firm, on an inhalation therapy for COVID-19.&nbsp; 
 
Campaign groups have criticised tobacco companies for promoting themselves as part of the transition to a smoke-free society while continuing to sell and advertise cigarettes around the world, despite a long history of denying the health consequences of smoking.

The tobacco epidemic is described by the World Health Organization as "one of the greatest public health concerns the world has ever faced."

According to the United Nations, smoking, including secondhand smoke, kills more than 8 million people each year.&nbsp;

(With inputs from agencies)

A UK business that makes products to treat lung problems might end up in the hands of one of the world's largest cigarette manufacturers, prompting health organisations to call on the British government to oppose the deal.

A UK business that makes products to treat lung problems might end up in the hands of one of the world's largest cigarette manufacturers, prompting health organisations to call on the British government to oppose the deal. The tobacco firm that created the 'Marlboro Man' has stirred uproar in medical circles with a move to invest in a business that develops inhaler technology, potentially allowing it to profit from the smoking-related lung ailments it helped create. Philip Morris International is in the process of acquiring Vectura, a UK company that specialises in lung disease inhaler technology. An open letter signed by 35 health charities and public health experts urged Vectura board members to reject a takeover bid by Philip Morris International. Signatories of the letter, led by Asthma UK and the British Lung Foundation, said a deal “could significantly hamper Vectura’s research and product development capabilities.” The deal would boost the tobacco giant's ambition to generate more than half of its net revenue from smoke-free products such as e-cigarettes and respiratory drugs within four years, up from about a quarter today. For firms like Novartis and GlaxoSmithKline, Vectura has produced 13 inhaled medicines to treat respiratory disorders like asthma. It is presently collaborating with Inspira Pharmaceuticals, another UK firm, on an inhalation therapy for COVID-19. Campaign groups have criticised tobacco companies for promoting themselves as part of the transition to a smoke-free society while continuing to sell and advertise cigarettes around the world, despite a long history of denying the health consequences of smoking. The tobacco epidemic is described by the World Health Organization as "one of the greatest public health concerns the world has ever faced." According to the United Nations, smoking, including secondhand smoke, kills more than 8 million people each year. (With inputs from agencies)

Bizarre: Tobacco giant to buy a company that makes asthma inhalers

The Enforcement Directorate (ED) is investigating Philip Morris International Inc and its Indian partner Godfrey Phillips for alleged violation of laws in India, a senior directorate source told Reuters on Thursday.

The Enforcement Directorate has been looking into both the companies and the scope of the investigation is much broader than the alleged foreign investment law violations highlighted in a Reuters story published on Wednesday, the source said.

Philip Morris has for years paid manufacturing costs to Godfrey Phillips to make its Marlboro cigarettes, circumventing a nine-year-old government ban on foreign direct investment in the industry, Reuters reported based on a review of dozens of internal company documents, which were dated between May 2009 and January 2018.

Three former officials and one former head of the Enforcement Directorate had reviewed the Philip Morris documents for Reuters and said the dealings should be investigated for circumventing India's foreign investment rules.

On Friday, the Enforcement Directorate source declined to comment on whether the ongoing investigation included Reuters reporting findings, but said "this is already under investigation."

"Both companies are being looked into," said the source, who declined to be named citing sensitivity of the investigation.

The Enforcement Directorate (ED) is investigating Philip Morris International Inc and its Indian partner Godfrey Phillips for alleged violation of laws in India, a senior directorate source told Reuters on Thursday.

The Enforcement Directorate (ED) is investigating Philip Morris International Inc and its Indian partner Godfrey Phillips for alleged violation of laws in India, a senior directorate source told Reuters on Thursday. The Enforcement Directorate has been looking into both the companies and the scope of the investigation is much broader than the alleged foreign investment law violations highlighted in a Reuters story published on Wednesday, the source said. Philip Morris has for years paid manufacturing costs to Godfrey Phillips to make its Marlboro cigarettes, circumventing a nine-year-old government ban on foreign direct investment in the industry, Reuters reported based on a review of dozens of internal company documents, which were dated between May 2009 and January 2018. Three former officials and one former head of the Enforcement Directorate had reviewed the Philip Morris documents for Reuters and said the dealings should be investigated for circumventing India's foreign investment rules. On Friday, the Enforcement Directorate source declined to comment on whether the ongoing investigation included Reuters reporting findings, but said "this is already under investigation." "Both companies are being looked into," said the source, who declined to be named citing sensitivity of the investigation.

India's Enforcement Directorate investigates Philip Morris, Godfrey Phillips: Report

Philip Morris International Inc and British American Tobacco Plc lobbied Pakistan's government to not implement bigger health warnings on cigarette packs, in what officials say was part of an industry-wide campaign that successfully persuaded Islamabad to water down a proposal designed to save lives.

In Pakistan, where the government estimates tobacco kills more than 100,000 people a year, Philip Morris launched a lobbying campaign that included letters to and a meeting with the country's prime minister on blocking larger health warnings and controlling illicit trade of cigarettes. Reuters reviewed two such letters written by Philip Morris executives to the Prime Minister's Office in 2017, and internal company documents describing a meeting in 2015 at which executives discussed "protecting the pack" in Pakistan.

British American Tobacco, through its local subsidiary, also lobbied Prime Minister Shahid Khaqan Abbasi with a letter and met Pakistani officials, according to government documents and a review of the October 2017 correspondence.

Two current, and one former, health officials said their ministry watered down a requirement to increase the size of health warnings to 85 per cent of the surface area due to industry lobbying. One of the current officials also cited pressure from Abbasi's office.

An official at the Federal Board of Revenue said the government took a sympathetic view towards tobacco industry lobbying because of the sector's hefty contributions to the nation's finances - more than $550 million in excise taxes during the 2016-17 fiscal year alone.

Instead of 85 per cent, the new rule, which comes into effect on June 1, requires warnings that cover 50 per cent of the pack - up from 40 per cent now - rising to 60 per cent in a year's time.

In a response to Reuters' questions, Philip Morris sent a statement from Moira Gilchrist, its vice president of scientific and public communications. "Like any global company, PMI regularly speaks with governments all over the world on a wide range of subjects, including our efforts to replace cigarettes with smoke-free products," Gilchrist said, referring to next-generation smoking devices that the company says significantly reduce the risk of disease by heating instead of burning tobacco.

A spokesperson for British American Tobacco (BAT) said in a statement: "like many companies, as part of our open and transparent engagement with governments, we regularly consult a wide range of representatives in health, trade, revenue, customs, agriculture and other relevant areas on a range of issues that affect our business. It's important that any legitimate business should be able to engage with regulators, and contribute to the development of policy that impacts it."

Extensive Lobbying

A Pakistan government survey in 2014 found some 24 million adults, or 19 per cent of the population 15 years and older, used tobacco. Of those, 15.6 million were smokers.

In February 2015, Pakistan's health ministry announced it was changing an ordinance to increase health warnings on the front and back of cigarette packs to 85 per cent. The graphic photographs currently on packs depict the effects of smoking, such as a close-up image of a person's mouth ravaged by tobacco use.

The initiative by Health Minister Saira Afzal Tarar was aimed at deterring tobacco use and would have put Pakistan, alongside India, near the top of global rankings for the size of such warnings, according to the Canadian Cancer Society.

The health ministry notification said the new warnings needed to be applied by March 30 that year.

On March 13, a delegation from a subsidiary of British American Tobacco, Pakistan Tobacco Company Ltd, called on the country's then-finance minister and "expressed its reservations about the notification issued" by the health ministry, according to government minutes of the meeting.

The tobacco representatives argued that the bigger health warning would lead to more smuggling of black market cigarettes and a "decrease in revenue", according to the minutes, which were reviewed by Reuters.

The industry argues that cigarette packs become indistinguishable by brand or promised quality when the packaging is covered by disturbing images. As a result, it says, consumers are incentivized to turn to alternatives without the graphic pictures. Health advocates say warnings on packs reduce tobacco consumption.&nbsp

The BAT statement to Reuters said: "We agree that all tobacco product packaging should feature appropriate health warnings which are bold, easily legible and ensure clarity of message."

However, the statement said: "Evidence suggests that drastic and large increases in the size" of health warnings "can result in a number of unintended consequences, including a rise in illegal cigarettes – with a corresponding decline in government revenues - and a rise in criminality. Additionally, there is still no credible evidence that graphic health warnings reduce smoking levels."

'Soft Corners' for Tobacco

Within a day of hearing from BAT, Pakistan's then-finance minister, Ishaq Dar, formed a review committee that was to examine the issue and present a report within seven days, according to the government document.

Dar told Reuters that the government's decisions were not influenced by Philip Morris or BAT.

Asked about the convening of the review committee, he said it was formed to ensure consultation between ministries on the issue, a move he described as "a fundamental requirement of good policy-making".

When provided with a copy of the government minutes showing the committee was put together just after his meeting with BAT, Dar responded that Reuters should contact the finance ministry for further comment, as he no longer held the portfolio. Requests for comment to the finance ministry were unanswered.

On March 27, as the review committee began deliberating, the health ministry issued a notification postponing the implementation date for the new 85 percent health warnings by two months.

During an interview with Reuters at her office, Health Minister Tarar said the tobacco industry was one of the biggest taxpayers in the country and so the finance ministry and the federal revenue board "definitely" have "some soft corners for them".

When Reuters relayed that characterisation to Dar, the former finance minister replied: "This is not true."

Health Minister Tarar said that in some of the meetings she had attended during that time, it was not easy to convince finance and revenue officials that people were dying because of smoking. She did not identify specific individuals.

Dar, the former finance minister, denied that his ministry's officials had challenged the link between smoking and mortality.

Muhammad Iqbal, a senior official at the country's Federal Board of Revenue, told Reuters that his agency "has no role in the matter of health warnings to be printed on cigarette packs. It is up to Ministry of Health to make regulations on this issue."

Still, Tarar defended the eventual outcome, telling Reuters the ministry had "stood firm" and that the increase in the size of health warnings to 50, and ultimately 60 percent, was significant. "We have undone the status quo," she said.

As BAT's Pakistan Tobacco Company launched its lobbying effort, Philip Morris also sprang into action: two internal documents related to an Asia corporate affairs meeting in Indonesia in 2015 said the company had devised a "campaign to roll-back" the stringent tobacco pack rules in Pakistan. It did not go into details.

When the government's inter-ministerial committee started to deliberate the health warning rules in 2015, Philip Morris and BAT representatives attended at least two of its meetings as industry stakeholders, according to records reviewed by Reuters.

During one meeting, a Philip Morris executive said the warning size was "too high", according to a record of the meeting held in May 2015, which was chaired by Health Minister Tarar.

In addition to Philip Morris and BAT, a constellation of smaller tobacco companies, growers and industry associations joined the lobbying effort, according to government records.

The panel's subsequent recommendation to roll back the increase in the size of health warnings, to 50 per cent and then 60 per cent instead of 85 per cent, was sent to the finance ministry for approval in August 2015.

Appeal to Prime Minister

The health ministry continued issuing successive notices pushing back the start date of the 85 per cent requirement, which had been published in the nation's official gazette but never implemented.

Then, last October, Philip Morris International's global vice president for corporate affairs, Jon Huenemann, wrote to Prime Minister Abbasi asking him to nudge the health ministry to formally change its rules.

"We would kindly request your near term intervention to direct the concerned officials to enforce the steps mentioned in the IMC recommendation," Huenemann wrote in the letter dated October 2, referring to the inter-ministerial committee set up by the finance ministry.

BAT's unit, Pakistan Tobacco Company, whose brands include John Player Gold Leaf and Benson & Hedges, made the same specific request to the prime minister on October 18, according to a copy of the company letter.

In his letter, Philip Morris' Huenemann reminded Abbasi that the prime minister had spoken with his colleague the previous month at a meeting of the US-Pakistan Business Council in New York.

Prime Minister Abbasi's office did not reply to questions sent by Reuters.

Huenemann mentioned, also, that he had personally met twice with the previous Pakistani prime minister, Nawaz Sharif, to discuss the issue of illegal cigarette manufacturing.

A request for comment to a representative of Sharif, along with officials from his political party, was not answered.

Huenemann did not respond to an e-mail sent to his company account. Philip Morris, maker of Marlboro cigarettes and local brands such as Morven Gold, said the existence of the letter had previously been reported in Pakistani media, but made no other comment.

BAT said in a statement about the letter that, "regarding the use of the words 'advise' and 'instruct' in this letter, it is customary for the Prime Minister to use such language when addressing government departments, and as such, it is equally customary for businesses and other external stakeholders to use similar language when they are writing to the Prime Minister."

According to a government office memo, the prime minister's office forwarded letters from Philip Morris and BAT to the health ministry two days later. Within two months, the health ministry issued a notification for smaller warnings. 
&nbsp

Instead of 85 per cent, the new rule, which comes into effect on June 1, requires warnings that cover 50 per cent of the pack - up from 40 per cent now - rising to 60 per cent in a year's time

Philip Morris International Inc and British American Tobacco Plc lobbied Pakistan's government to not implement bigger health warnings on cigarette packs, in what officials say was part of an industry-wide campaign that successfully persuaded Islamabad to water down a proposal designed to save lives. In Pakistan, where the government estimates tobacco kills more than 100,000 people a year, Philip Morris launched a lobbying campaign that included letters to and a meeting with the country's prime minister on blocking larger health warnings and controlling illicit trade of cigarettes. Reuters reviewed two such letters written by Philip Morris executives to the Prime Minister's Office in 2017, and internal company documents describing a meeting in 2015 at which executives discussed "protecting the pack" in Pakistan. British American Tobacco, through its local subsidiary, also lobbied Prime Minister Shahid Khaqan Abbasi with a letter and met Pakistani officials, according to government documents and a review of the October 2017 correspondence. Two current, and one former, health officials said their ministry watered down a requirement to increase the size of health warnings to 85 per cent of the surface area due to industry lobbying. One of the current officials also cited pressure from Abbasi's office. An official at the Federal Board of Revenue said the government took a sympathetic view towards tobacco industry lobbying because of the sector's hefty contributions to the nation's finances - more than $550 million in excise taxes during the 2016-17 fiscal year alone. Instead of 85 per cent, the new rule, which comes into effect on June 1, requires warnings that cover 50 per cent of the pack - up from 40 per cent now - rising to 60 per cent in a year's time. In a response to Reuters' questions, Philip Morris sent a statement from Moira Gilchrist, its vice president of scientific and public communications. "Like any global company, PMI regularly speaks with governments all over the world on a wide range of subjects, including our efforts to replace cigarettes with smoke-free products," Gilchrist said, referring to next-generation smoking devices that the company says significantly reduce the risk of disease by heating instead of burning tobacco. A spokesperson for British American Tobacco (BAT) said in a statement: "like many companies, as part of our open and transparent engagement with governments, we regularly consult a wide range of representatives in health, trade, revenue, customs, agriculture and other relevant areas on a range of issues that affect our business. It's important that any legitimate business should be able to engage with regulators, and contribute to the development of policy that impacts it." Extensive Lobbying A Pakistan government survey in 2014 found some 24 million adults, or 19 per cent of the population 15 years and older, used tobacco. Of those, 15.6 million were smokers. In February 2015, Pakistan's health ministry announced it was changing an ordinance to increase health warnings on the front and back of cigarette packs to 85 per cent. The graphic photographs currently on packs depict the effects of smoking, such as a close-up image of a person's mouth ravaged by tobacco use. The initiative by Health Minister Saira Afzal Tarar was aimed at deterring tobacco use and would have put Pakistan, alongside India, near the top of global rankings for the size of such warnings, according to the Canadian Cancer Society. The health ministry notification said the new warnings needed to be applied by March 30 that year. On March 13, a delegation from a subsidiary of British American Tobacco, Pakistan Tobacco Company Ltd, called on the country's then-finance minister and "expressed its reservations about the notification issued" by the health ministry, according to government minutes of the meeting. The tobacco representatives argued that the bigger health warning would lead to more smuggling of black market cigarettes and a "decrease in revenue", according to the minutes, which were reviewed by Reuters. The industry argues that cigarette packs become indistinguishable by brand or promised quality when the packaging is covered by disturbing images. As a result, it says, consumers are incentivized to turn to alternatives without the graphic pictures. Health advocates say warnings on packs reduce tobacco consumption. The BAT statement to Reuters said: "We agree that all tobacco product packaging should feature appropriate health warnings which are bold, easily legible and ensure clarity of message." However, the statement said: "Evidence suggests that drastic and large increases in the size" of health warnings "can result in a number of unintended consequences, including a rise in illegal cigarettes – with a corresponding decline in government revenues - and a rise in criminality. Additionally, there is still no credible evidence that graphic health warnings reduce smoking levels." 'Soft Corners' for Tobacco Within a day of hearing from BAT, Pakistan's then-finance minister, Ishaq Dar, formed a review committee that was to examine the issue and present a report within seven days, according to the government document. Dar told Reuters that the government's decisions were not influenced by Philip Morris or BAT. Asked about the convening of the review committee, he said it was formed to ensure consultation between ministries on the issue, a move he described as "a fundamental requirement of good policy-making". When provided with a copy of the government minutes showing the committee was put together just after his meeting with BAT, Dar responded that Reuters should contact the finance ministry for further comment, as he no longer held the portfolio. Requests for comment to the finance ministry were unanswered. On March 27, as the review committee began deliberating, the health ministry issued a notification postponing the implementation date for the new 85 percent health warnings by two months. During an interview with Reuters at her office, Health Minister Tarar said the tobacco industry was one of the biggest taxpayers in the country and so the finance ministry and the federal revenue board "definitely" have "some soft corners for them". When Reuters relayed that characterisation to Dar, the former finance minister replied: "This is not true." Health Minister Tarar said that in some of the meetings she had attended during that time, it was not easy to convince finance and revenue officials that people were dying because of smoking. She did not identify specific individuals. Dar, the former finance minister, denied that his ministry's officials had challenged the link between smoking and mortality. Muhammad Iqbal, a senior official at the country's Federal Board of Revenue, told Reuters that his agency "has no role in the matter of health warnings to be printed on cigarette packs. It is up to Ministry of Health to make regulations on this issue." Still, Tarar defended the eventual outcome, telling Reuters the ministry had "stood firm" and that the increase in the size of health warnings to 50, and ultimately 60 percent, was significant. "We have undone the status quo," she said. As BAT's Pakistan Tobacco Company launched its lobbying effort, Philip Morris also sprang into action: two internal documents related to an Asia corporate affairs meeting in Indonesia in 2015 said the company had devised a "campaign to roll-back" the stringent tobacco pack rules in Pakistan. It did not go into details. When the government's inter-ministerial committee started to deliberate the health warning rules in 2015, Philip Morris and BAT representatives attended at least two of its meetings as industry stakeholders, according to records reviewed by Reuters. During one meeting, a Philip Morris executive said the warning size was "too high", according to a record of the meeting held in May 2015, which was chaired by Health Minister Tarar. In addition to Philip Morris and BAT, a constellation of smaller tobacco companies, growers and industry associations joined the lobbying effort, according to government records. The panel's subsequent recommendation to roll back the increase in the size of health warnings, to 50 per cent and then 60 per cent instead of 85 per cent, was sent to the finance ministry for approval in August 2015. Appeal to Prime Minister The health ministry continued issuing successive notices pushing back the start date of the 85 per cent requirement, which had been published in the nation's official gazette but never implemented. Then, last October, Philip Morris International's global vice president for corporate affairs, Jon Huenemann, wrote to Prime Minister Abbasi asking him to nudge the health ministry to formally change its rules. "We would kindly request your near term intervention to direct the concerned officials to enforce the steps mentioned in the IMC recommendation," Huenemann wrote in the letter dated October 2, referring to the inter-ministerial committee set up by the finance ministry. BAT's unit, Pakistan Tobacco Company, whose brands include John Player Gold Leaf and Benson & Hedges, made the same specific request to the prime minister on October 18, according to a copy of the company letter. In his letter, Philip Morris' Huenemann reminded Abbasi that the prime minister had spoken with his colleague the previous month at a meeting of the US-Pakistan Business Council in New York. Prime Minister Abbasi's office did not reply to questions sent by Reuters. Huenemann mentioned, also, that he had personally met twice with the previous Pakistani prime minister, Nawaz Sharif, to discuss the issue of illegal cigarette manufacturing. A request for comment to a representative of Sharif, along with officials from his political party, was not answered. Huenemann did not respond to an e-mail sent to his company account. Philip Morris, maker of Marlboro cigarettes and local brands such as Morven Gold, said the existence of the letter had previously been reported in Pakistani media, but made no other comment. BAT said in a statement about the letter that, "regarding the use of the words 'advise' and 'instruct' in this letter, it is customary for the Prime Minister to use such language when addressing government departments, and as such, it is equally customary for businesses and other external stakeholders to use similar language when they are writing to the Prime Minister." According to a government office memo, the prime minister's office forwarded letters from Philip Morris and BAT to the health ministry two days later. Within two months, the health ministry issued a notification for smaller warnings.

Pakistan diluted proposed tobacco health warnings after Philip Morris, BAT lobbying

<div style="text-align: justify;">Marlboro maker Philip Morris International says its electronic cigarette has rapidly captured close to 3 percent of Japanese tobacco sales, making inroads into a market Japan Tobacco (JT) relies on for 40 percent of its profit. 
 
In what may be an early vindication of Philip Morris&#39;s electronic cigarette strategy, their iQOS product accounted for 2.2 percent of Japan&#39;s tobacco sales in the quarter ended on June 30, a company spokesman said. 
 
That share had climbed to 2.7 percent by the end of June after Philip Morris rolled out the $98.53 electronic smoker in late April accompanied by &quot;HeatSticks&quot;, which cost the same as regular cigarettes. 
 
&quot;The figures clearly show that iQOS is stealing a chunk of the rolled tobacco market,&quot; said Masashi Mori, analyst at Credit Suisse Securities in Tokyo. Japan&#39;s overall cigarette sales in June shrank 5.2 percent. 
 
On Friday, JT said revenue from July cigarettes sales in Japan dipped by 3.4 percent to $520 million. 
 
Unlike conventional e-cigarettes that vaporise a nicotine infused liquid, Philip Morris&#39; iQOS produces a smokeless aerosol by heating tobacco leaf packed into stubby cigarettes inserted into the device. 
 
So far Philip Morris has tested the gadget in seven countries, including cities in Switzerland and Italy. Japan, which has suppressed e-cigarette &quot;vaping&quot; by regulating nicotine liquids under pharmaceutical laws, is the only country where it is sold nationwide. 
 
Demand for iQOS, which is made in Malaysia, has outstripped demand, leaving Philip Morris unable to make the most of its early entry into Japan. Some limited-edition IQOS models are selling online for as much as $780. 
 
&quot;When Philip Morris can supply enough to meet demand, then its push in to the market is very likely to accelerate,&quot; UBS Securities Japan analyst Naomi Takagi said. 
 
E-cigarettes assuage some smokers&#39; health concerns and ease social stigmas attached to tobacco. Tobacco firms are battling to take an early lead in the emerging market as overall cigarette sales shrink globally. 
 
Sales of e-cigarettes, however, are booming, growing five times to $8 billion in 2014 from 2010, according to research company Euromonitor. The market in 2020 is likely to be 20 times the 2010 level, predicts Euromonitor. Global cigarette revenue is about $750 billion. 
 
Philip Morris plans to widen sales of iQOS to 20 countries by the end of the year. 
 
Former state tobacco monopoly Japan Tobacco, which has 60 percent of its domestic market, is struggling to counter the challenge with its own device. JT&#39;s electronic cigarette stick, dubbed the Ploom TECH, creates a vapor from a liquid that is passed through granulated tobacco. 
Yet the world&#39;s No. 3 cigarette maker has so far been unable to match iQOS&#39;s nationwide launch, with no clear indication yet when it will have sufficient production output to do so. 
&quot;It&#39;s doubtful that JT will manage a wider launch before the end of the year,&quot; Takagi at UBS Securities said. 
(Reuters)</div>

Japan Tobacco's cigarettes sales in Japan dipped by 3.4 percent from July, dropping to $520 million

Marlboro maker Philip Morris International says its electronic cigarette has rapidly captured close to 3 percent of Japanese tobacco sales, making inroads into a market Japan Tobacco (JT) relies on for 40 percent of its profit. In what may be an early vindication of Philip Morris's electronic cigarette strategy, their iQOS product accounted for 2.2 percent of Japan's tobacco sales in the quarter ended on June 30, a company spokesman said. That share had climbed to 2.7 percent by the end of June after Philip Morris rolled out the $98.53 electronic smoker in late April accompanied by "HeatSticks", which cost the same as regular cigarettes. "The figures clearly show that iQOS is stealing a chunk of the rolled tobacco market," said Masashi Mori, analyst at Credit Suisse Securities in Tokyo. Japan's overall cigarette sales in June shrank 5.2 percent. On Friday, JT said revenue from July cigarettes sales in Japan dipped by 3.4 percent to $520 million. Unlike conventional e-cigarettes that vaporise a nicotine infused liquid, Philip Morris' iQOS produces a smokeless aerosol by heating tobacco leaf packed into stubby cigarettes inserted into the device. So far Philip Morris has tested the gadget in seven countries, including cities in Switzerland and Italy. Japan, which has suppressed e-cigarette "vaping" by regulating nicotine liquids under pharmaceutical laws, is the only country where it is sold nationwide. Demand for iQOS, which is made in Malaysia, has outstripped demand, leaving Philip Morris unable to make the most of its early entry into Japan. Some limited-edition IQOS models are selling online for as much as $780. "When Philip Morris can supply enough to meet demand, then its push in to the market is very likely to accelerate," UBS Securities Japan analyst Naomi Takagi said. E-cigarettes assuage some smokers' health concerns and ease social stigmas attached to tobacco. Tobacco firms are battling to take an early lead in the emerging market as overall cigarette sales shrink globally. Sales of e-cigarettes, however, are booming, growing five times to $8 billion in 2014 from 2010, according to research company Euromonitor. The market in 2020 is likely to be 20 times the 2010 level, predicts Euromonitor. Global cigarette revenue is about $750 billion. Philip Morris plans to widen sales of iQOS to 20 countries by the end of the year. Former state tobacco monopoly Japan Tobacco, which has 60 percent of its domestic market, is struggling to counter the challenge with its own device. JT's electronic cigarette stick, dubbed the Ploom TECH, creates a vapor from a liquid that is passed through granulated tobacco. Yet the world's No. 3 cigarette maker has so far been unable to match iQOS's nationwide launch, with no clear indication yet when it will have sufficient production output to do so. "It's doubtful that JT will manage a wider launch before the end of the year," Takagi at UBS Securities said. (Reuters)

Philip Morris' electronic cigarettes storm Japanese tobacco market

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Bizarre: Tobacco giant to buy a company that makes asthma inhalers

India's Enforcement Directorate investigates Philip Morris, Godfrey Phillips: Report

Pakistan diluted proposed tobacco health warnings after Philip Morris, BAT lobbying

Philip Morris' electronic cigarettes storm Japanese tobacco market