Tobacco concern Philip Morris International has increased shipments of finished products in Ukraine by 8.4% in 2023 compared to 2022, the company said in a press release.
“For 2023, our finished product shipments in Ukraine increased by 8.4%. This figure includes both imported and locally produced products. The increase in shipments occurred as part of our strategy to regain market share, which we temporarily lost due to the war and the forced shutdown of our factory in Kharkiv region,” the company’s press service quoted Philip Morris’ CFO in Ukraine Sergey Kalnoochenko as saying.
According to the published financial report of the company, in the fourth quarter of 2023 PMI increased total shipments of cigarettes and tobacco products for electric heating in Ukraine by 14.9% compared to the same period of 2022.
In total, total finished goods shipments in the company’s European region, which includes Ukraine, increased 2.6% to 53.6 billion cigarettes in the fourth quarter of 2023 compared to the fourth quarter of the prior year, primarily driven by markets in Poland (up 10.6%), Italy (up 4.0%) and Ukraine (up 14.9%), partially offset by lower shipments in France (down 13.7%) and Germany (down 6.2%).
In total, Philip Morris International’s 2023 revenue increased 10.7% to $35.2 billion compared to 2022.
According to the report, the total number of adult IQOS users globally at the end of 2023 was estimated at approximately 28.6 million, an increase of 3.7 million from December 2022.
Philip Morris International (PMI) is a leading international tobacco company that has been operating in the Ukrainian market since 1994. Over 30 years of work, the company has invested more than $700 mln in the Ukrainian economy.
Philip Morris in Ukraine has suspended the operation of its factory in Kharkiv region since February 24, 2022. Since the beginning of the full-scale war in Ukraine, the company has secured a steady supply of its products to Ukraine through imports from 8 PMI factories and a temporary partnership with another international manufacturer in Ukraine.
Philip Morris plans to launch a new factory in Lviv region in the second quarter of 2024 with an investment of $30 mln.
In 2023, the company paid more than UAH 30 bln of taxes to budgets of different levels in Ukraine.
Tobacco products manufacturer Philip Morris Ukraine is ready to cooperate with the Antimonopoly Committee of Ukraine (AMCU) in its initiated investigation into the legality of advertising of tobacco heating systems IQOS as a less harmful alternative to regular cigarettes.
The company’s press service told Interfax-Ukraine news agency that the claims used by the manufacturer of IQOS when advertising tobacco heating systems were and are clear, credible and scientifically confirmed.
“There is ample evidence to support that while IQOS is not devoid of all risks, it is the best alternative to continuing to smoke. Such evidence includes thorough laboratory studies and 10 clinical trials by the company, as well as numerous independent studies, including government agencies in several EU countries such as Germany, Belgium and the Netherlands,” the manufacturer’s press office stressed in a statement.
According to the company, the AMCU inquiry into the legality of advertising IQOS will begin the process of determining whether the charges against Philip Morris Ukraine are valid. At the same time, Philip Morris Sales and Distribution LLC has not received a single message from the AMCU about the initiation of an investigation against it.
“Thousands of smokers in Ukraine have switched to IQOS and stopped smoking. It is important that consumers continue to receive reliable information and not be misled, which may encourage them to continue smoking or return to cigarettes – one of the most harmful forms of nicotine use – that are harmful to both their health and public health in general,” the company’s press service comment states.
“Philip Morris Ukraine” also reminded that the reliability of the information distributed about IQOS has previously been confirmed when the AMCU considered the application on similar accusations of another complainant.
“The company also urges the AMCU and the press to avoid expressing or disseminating premature conclusions until the evidence in the case is fully completed and to comply with proper standards and principles of law,” the Philip Morris press service stated in a comment.
As reported, the AMCU December 30, 2022 initiated a case against “Philip Morris Sales & Distribution” for possible unfair competition, as the company in advertising their systems to heat tobacco IQOS claims their greater safety for the health of smokers compared with conventional cigarettes. The office called the cause of the case the Ministry of Health of Ukraine, according to which any heating tobacco systems are dangerous and do not reduce the risks of smoking.
Philip Morris International, which includes Philip Morris Ukraine, is one of the world’s largest tobacco manufacturers. It operates in Ukraine for more than 20 years, owns a factory in the Kharkiv region. Before the Russian armed invasion the company employed about 1.3 thousand people. Before the war the factory was an export hub for more than 20 countries, in particular large markets like Japan and Egypt.
The company’s brand portfolio includes Marlboro, L&M, Chesterfield, Parliament, Bond Street and other brands. PMI also produces IQOS tobacco heating systems and tobacco sticks for them.
