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Philip Morris International Addresses Misguided Attacks On Role In Tobacco Products Directive Debate

Stocks in this article: PM

Philip Morris International (PMI) (NYSE/Euronext Paris: PM) today addressed recent attacks on the company’s efforts to express its views on the proposed EU Tobacco Products Directive (TPD). Speaking on behalf of the company, which employs 12,500 people in the EU, generates approximately EUR 14.6 billion in tax revenue and has invested hundreds of millions in reduced risk product innovation EU Region President Drago Azinovic said:

“Unfortunately, rather than a serious evaluation of the content and likely impact of the EU’s proposed Tobacco Products Directive, the discussion tends to focus on our efforts to make known our views about this proposal.

“The argument that we should remain silent in the face of a proposal that directly concerns us -- and on which we have facts and improvement ideas to share – is illogical. In fact, it would be irresponsible for us not to inform EU decision-makers of the impact of a proposal on our business, the hundreds of thousands of employees working in our industry, and the Member State governments and taxpayers who will bear the consequences. We have and will continue to express our views proactively and transparently. As the EU itself says this kind of interaction is ‘constant, legitimate and necessary for the quality of democracy.’

“As part of this process, some PMI employees spend time meeting with EU officials to share the company’s views and provide industry expertise not only on the TPD, but other complex policy issues as well, and we voluntarily reported this activity on the EU’s Transparency Register . Using the EU’s recommended methodology, we surveyed a total of 161 employees who potentially spent a portion of their time, in addition to their other job responsibilities, with EU officials. We then calculated -- again, using the EU's methodology -- the figure, which is a fraction of the number of employees surveyed and that appears on the Transparency Register. This number includes those employees in the Brussels office who interact with EU officials and are listed by name. In short, we followed best practices in our reporting, which makes it particularly frustrating to read articles that misinterpret -- or, perhaps, intentionally mischaracterize -- our practices -- especially when the purported basis for this information appears to be stolen, internal PMI working documents. On top of all that, creating confusion about the number of PMI employees who work on matters in Brussels distracts from what matters, namely a rational approach to tobacco regulation in the EU.

“Contrary to the impression that our critics attempt to create, PMI does support sound, effective regulation -- even when it restricts our business activities -- and we allocate resources to advocating our views in that regard. For example, we believe that a regulatory framework that enables and encourages reduced risk products makes sense; we believe government should pass -- and vigorously enforce -- laws to fight the large and growing black market tobacco market; and we agree that public should continue to receive information on the risks of smoking.

“At the same time, we are not alone in our view that many elements in the proposed TPD are deeply flawed. For example, the Commission's proposal to ban menthol and slim cigarettes violates the EU's basic standards of sound regulation. There isn't even an impact assessment of the ban on slims and the proposal skips over the key fact that, as history has shown, prohibition does not work. These bans will force sales out of legitimate corner shops onto unregulated street corners and other places where the products are illegal and the sellers are criminals who don’t follow basic laws such as verifying the age of a customer or collecting excise tax.

“These and the other negative consequences of this proposal would have received more careful consideration if the Commission had taken more seriously its duty to conduct a thorough and objective impact assessment of the draft Directive. Instead, Members of the European Parliament now face the task of correcting a deeply flawed proposal. Otherwise, the Member States will ultimately bear the burden of having to implement measures that unjustifiably disrupt an internal market that has been working well for years.

“We look forward to continuing to invest time, effort and resources into providing accurate and relevant information about the impact this Directive will have. It is our hope that members of the European Parliament will look beyond the rhetoric, examine the facts, and stand up for the many who will be unnecessarily, negatively impacted if this proposal is passed in its current form.”


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