Blowing Unsmoke

Credit: OCCRP
Published: May 25, 2020

An art object. A fashion accessory. A medical treatment. A scientifically advanced gadget. And even, recently, a solution to COVID-19-induced lockdown boredom.

Philip Morris International, one of the world’s largest tobacco companies, is promoting its new star product, the IQOS, as everything except what it really is: a tobacco delivery device.

After decades of pressure from anti-smoking groups, the world’s major tobacco companies have been forced to admit that cigarettes cause cancer and other serious health conditions like heart disease and emphysema.

In many countries they have been hit with major restrictions — bans on advertising and promotion and strict limits on indoor smoking — stemming from the landmark Framework Convention on Tobacco Control (FCTC), an international treaty that aims to reduce the demand and supply of tobacco.

So 14 years on, the industry is also pivoting. PMI launched a global campaign last year called “Unsmoke Your World,” urging smokers to give up cigarettes. “Society expects us to act responsibly,” it proclaims on its website. “And we are doing just that by designing a smoke-free future.”

“Cigarette sales are declining everywhere in the world and we are going to accelerate this decline,” chief executive Andre Calantzopoulos told the BBC last year.

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Andre Calantzopoulos poses with the IQOS 3 at an event in Tokyo in 2018 Credit: Kim Kyung-Hoon/Reuters

But while PMI says it wants the world to be smoke-free, it has no intention of making it tobacco-free.

Instead, the company has banked its future on selling an entirely different way of getting aerosolized nicotine into its customers’ lungs: a proprietary system that uses electricity inside the IQOS device to heat short tobacco plugs to 350°C, substantially lower than the temperature of a cigarette, which burns at around 900°.

The company is betting big on IQOS, especially in markets where cigarette smoking is already on the decline or seen as déclassé, like many European countries and wealthier parts of Asia and Latin America.

At PMI’s most recent shareholder meeting on May 6, IQOS dominated the discussion and traditional cigarettes were barely mentioned, according to Michél Legendre of the non-profit organization Corporate Accountability, who was present at the meeting. IQOS products, which are more profitable per unit than cigarettes, generated US$5.6 billion in revenues for PMI last year, up from $700 million in 2016.

Philip Morris argues that when tobacco smolders rather than burning, it produces “on average 90-95 percent fewer” toxic substances, making it safer for smokers and those around them. The company has bombarded governments and the public with what it claims are “independent studies” that will prove that puffing an IQOS is healthier than smoking a cigarette.

But many of the studies on the health effects of IQOS were financed by PMI itself. There are only a few independent analyses on the safety of IQOS and how it compares to ordinary cigarettes in terms of the harm done to the body over time, according to Anna Gilmore, a professor at the University of Bath who studies the tobacco industry. They tell a different story.

After Philip Morris applied to sell the IQOS in the United States as a “modified-risk tobacco product,” the U.S. Food and Drug Administration rejected the claim that using the device cuts the risk of tobacco-related diseases. Although the IQOS may produce fewer levels of some toxins, the FDA said there is still no evidence it is healthier in the long term.

Another government analysis, in Italy, came to the same conclusion, but was never released. However, a copy of the report was exclusively obtained by OCCRP’s partner in Italy, RAI3’s Report investigative television program.

How IQOS is marketed on social media around the world.

As well as touting the health claims of IQOS, Philip Morris has been pushing a key advertising and sales strategy: separating the smoking device from the tobacco sticks that go inside it.

This sleight of hand has opened up a whole new world of advertising possibilities to the manufacturer that were shut down by the FCTC and related national anti-smoking laws.

The electronic device is still not taxed as a tobacco product in a number of countries, and it largely exists in a kind of regulatory limbo where it doesn’t need to be sold like one either.

This allows PMI to boost the public image of IQOS by creating sleekly branded shops that resemble Apple stores, even as the tobacco plugs, branded as “Heets” or “Marlboro Heets,” are still limited to shops licensed to sell tobacco.

In Italy, IQOS flagship shops are dubbed “embassies” and often feature art installations or architectural gimmicks. Rome’s IQOS Embassy has interiors made of recycled bottle caps and decorative elements shaped like nicotine molecules.

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The IQOS Embassy in Rome. Credit: Sartoria Comunicazione

“We use a lot of high-quality wood, ash and walnut in the interior,” a German executive for Philip Morris said of the new IQOS boutiques springing up on high streets in the country’s major cities.

The devices themselves are no less sleek. They resemble high-end pens, with matte chrome finishes and color options in a variety of jewel tones and limited-edition specials, like a recent Ukrainian version in aquamarine. (“One of the most trendy colors of the spring/summer 2020 season,” an advertorial in Cosmopolitan Ukraine buzzed.

IQOS street advertisements and billboards showing off the lines and curves of the electronic device have become common sights in countries like Romania and Japan that are FCTC signatories and have laws against tobacco advertising. Kiosks and stalls emblazoned with the IQOS logo have gone up in shopping malls, inside subway stations, and even on train carriages — which, emblazoned with the “Unsmoke” tagline, traveled thousands of kilometers around Romania earlier this year.

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A campaign for IQOS in Romania Credit: Andrei Ciurcanu

And IQOS is picking up sponsorships that a tobacco company would normally be barred from: Formula 1 cars in Australia and Japan, a medical conference in Romania, and the largest indie music festival in Colombia, Estereo Picnic, where attendees can enjoy acts like Lana del Rey and the Arctic Monkeys — and buy Heets at a specially-branded stall called “Chill Vibes.”

Promotions giving users free trial runs of an IQOS device or samples of Heets have also taken place around the world. OCCRP and partners spotted these in Romania, Ukraine, Japan, Germany, and the UK, among other countries.

In Bucharest, an event space known as the “Qreator Hub” sponsors art and theater shows and sells limited-edition “Qollections” of designer silk scarves, handbags, and furniture for pets. When visitors are thirsty, they can grab a drink in the Qreator bar, which has an IQOS-branded receptacle for used Heets on every table.

In Italy, IQOS sponsored articles in a food magazine, “Cooked and Eaten,” and threw a launch party with recipes all cooked to precise temperatures, supposedly inspired by IQOS’s “HeatControl” technology. (Tobacco advertising in magazines or newspapers is illegal in Italy, and the Italian Competition Authority fined Philip Morris 500,000 euros for hidden advertising for this stunt).

At last year’s Milan Design Week, PMI even hired British sculptor Alex Chinneck to create an art installation inspired by the IQOS. He produced a giant molded zipper that created the illusion of a building shedding its facade to reveal an ethereal light within.

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A Sprinkle of Night and a Spoonful of Light,” a sculpture commissioned by Philip Morris, said to be inspired by IQOS. Credit: Claudia Beretta / Alamy Stock Photo)

“IQOS wanted to channel the notion of opening the future, so this zip is the idea of revealing, opening,” the artist told media.

But although the art and decor can be frivolous, the implications of Philip Morris’s “decoupling” strategy are dead serious. PMI has lobbied fiercely around the world to carve out a new regulatory regime for IQOS, with lower taxes than cigarettes and fewer restrictions on where it can be smoked.

Taylor Billings, a spokeswoman for Corporate Accountability, told OCCRP there was a major push by tobacco companies at the 2018 Conference of the Parties to the FCTC to create an entirely new classification for heated-tobacco products.

”And the whole point of that is just to create a separate policy track to set countries back 10 years from implementing the same regulations that currently apply to cigarettes,” she said. “So every lobbying push you see in the country is really just to carve out an unprecedented policy track so that they aren't taxed as highly, so they don't have marketing bans, so they can market them close to schools or... at kid-targeted events.”

In Romania, Philip Morris lobbied against a new tobacco draft law that would tax and regulate heated tobacco products at the same rate as ordinary cigarettes (they are currently taxed at a sixth of the rate), and ban them from being promoted in public spaces or handed out as free samples.

Officials from Philip Morris Romania stormed the doors of the Senate and Chamber of Deputies during discussions on the law, and openly attended debates and special sessions in the Romanian parliament to argue against it, although this should be illegal under the terms of the FCTC. It also used two front groups to argue against imposing restrictions on heated-tobacco products.

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A Romanian Chamber of Deputies document showing how Philip Morris International lobbied against a law that would place more restrictions on heated-tobacco products like IQOS, saying it would “cancel out the investments that the industry is making, including in the field of research. Credit: OCCRP

In Ukraine, PMI has also been lobbying against a law that would tax heated-tobacco products in the same way as cigarettes. Between 2017 and 2019, it paid out nearly half a million dollars to an advocacy group called the Ukrainian Economic Freedoms Foundation whose founder, Maryan Zablotskyy, is now a member of parliament. (Zablotskyy did not respond to requests for comment.)

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Zablotskyy’s draft law. Credit: Kyiv Post

He tried to postpone the regulation of heated-tobacco products, introducing a draft law that would allow them to be smoked indoors as “smokeless tobacco.” Using this term, which echoes PMI’s marketing language, would allow them to be exempted from normal tobacco regulations.

IQOS even got its tobacco sticks certified by the Ukrainian State Service of Food Safety and Consumer Protection as “not for smoking,” meaning that they can be used indoors and in other areas where smoking is forbidden.

In Colombia, Philip Morris has provided financial incentives to politically influential groups to block changes that are unfavorable to the tobacco company, and high-level national government officials have had direct or close relationships with the industry. Colombian Vice Minister of Finance Juan Alberto Londoño was manager of government affairs for Philip Morris-Coltabaco between 2009 and 2010.

While HTPs are supposed to be treated like any other tobacco product in any country that has signed the WHO Framework Convention on Tobacco Control, tobacco companies are fighting hard to make sure that never happens.

For the “Blowing Unsmoke” project, OCCRP partnered with more than 14 journalists in 10 key countries — from Italy and Japan, where the IQOS debuted in 2014, to Romania and Colombia, where PMI is heavily promoting the device, to Macedonia, where the IQOS is just entering the market. Journalists collected exclusive documents and interviewed politicians, scientists, and former PMI employees over the course of several months.

Overall, their reporting paints a picture of a company taking advantage of legislative gray areas and relying on its own paid-for scientific literature to back its claims. By relentlessly marketing the IQOS as a fashionable, fun, and “clean” device that has nothing to do with smoking, PMI is pushing for a future in which “unsmoke” takes over the world of tobacco.

PMI’s Vice President of Strategic & Scientific Communication, Moira Gilchrist, denied that the company is flouting anti-tobacco regulations, arguing that campaign groups are targeting IQOS as part of a “disastrous prohibition-only crusade.”

“If people who smoke are denied accurate information — or worse yet, are misled about less harmful alternatives — the vast majority will simply continue to smoke cigarettes,” she said.

But it's not just ex-smokers who are trying IQOS.

In North Macedonia, although the device is not officially on sale yet, it already has a market of avid young users who have been buying it in neighboring Balkan countries. Some of them have eagerly embraced the message that using an IQOS is not really smoking.

Veronika, a 16-year-old living in the capital, Skopje, was just four years old when Macedonia enacted a smoking ban in 2008. She spent her childhood hearing that cigarettes were bad for you, and has no memory of throngs of smokers in bars and restaurants.

But last year, she started what she calls “sort of smoking.” Instead of cigarettes, she puffs an IQOS she got on a shopping trip to Serbia with friends.

She already has three devices and plans to buy a fourth — for aesthetic reasons. She wants a “chic” pink IQOS.

“It’s not really a cigarette, not a real one, from what I know about smoking,” she said.

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Veronika shows off one of her three IQOS devices. Credit: Saska Cvetkovska

Stories

Unsmoking for Health

A campaign to get doctors to recommend IQOS, a hidden medical report, and a brigade of industry-backed scientists: Inside Philip Morris International’s efforts to convince the world to adopt its high-tech heated tobacco.

25 May 2020 Read the article

Pandering to a Pandemic

Philip Morris is using the coronavirus pandemic to market IQOS, its new device for consuming tobacco without smoke. The company claims IQOS is safer than cigarettes, but some experts disagree.

25 May 2020 Read the article

Partner Stories

Smoke Screen

Smoke Screen

26 May 2020

RAI3’s Report uncovered evidence the Italian government kept quiet about a confidential report by its own scientists demolishing Philip Morris’ claims that IQOS is safer than cigarettes, just days after lawmakers approved a tax break for the devices.

  • Philip Morris applied to the Ministry of Health seeking approval for claims that its IQOS system is less harmful and risky than traditional cigarettes, using a questionable law.
  • The Ministry of Health asked the National Health Institute to analyze the study. When the Institute's scientists instead produced a 90-page report questioning Philip Morris's science and debunking claims the device was safe, the document was kept hushed up.
  • Italy’s government approved a new tax break for heated tobacco products in December 2018, just days before Philip Morris' claims were rejected by the National Health Institute.
(Italian)
Philip Morris whitewashes reputation with COVID-19 aid while promoting smoking

Philip Morris whitewashes reputation with COVID-19 aid while promoting smoking

26 May 2020

Cut-price deals, back-door donations, and teenage ‘influencers’ — our Ukrainian partner, The Kyiv Post, exposes the many ways that PMI has been pushing IQOS during the coronavirus pandemic lockdown

  • PMI intensified its IQOS marketing efforts during the coronavirus lockdown, cutting prices by up to 25 percent, offering free delivery and giving customers free gifts and bonuses.
  • Dozens of videos of ‘influencers’ unpacking Heets products and freebies have been posted on IQOS Ukraine’s official Instagram account, including one from a 19-year-old singer who is well below PMI’s own rules that promoters should be 25 or over.
  • PMI donated 10 million hryvnias to fight COVID-19 to a charity run by retired politician Serhiy Shevchuk, who tried and failed to build a mobile hospital and ended up spending the funds on PPE on the State Border Guard Service — a possible violation of international rules.
(English)
Big Tobacco use menthol cigarette ban to promote rival products

Big Tobacco use menthol cigarette ban to promote rival products

26 May 2020

The UK’s Bureau of Investigative Journalism, whose investigation is also published in The Daily Telegraph, found Philip Morris is exploiting a ban on menthol cigarettes in a bid to boost IQOS sales by up to 400 percent.

  • Philip Morris is taking advantage of a ban on menthol cigarettes to boost IQOS sales despite claiming it supports smokers quitting cigarettes over switching to IQOS. Management had set a 400 percent sales growth target for heated tobacco in the UK.
  • Philip Morris’ UK managing director Peter Nixon has told staff ‘2020 is the most important year in [our] history… The momentum of IQOS coupled with the menthol ban give us a huge opportunity.’
  • Strict UK laws prevent giveaways or free offers of tobacco products, but Philip Morris is skirting these restrictions with an IQOS trial that includes four packs of Heets for the price of two, as well as a two-week loan of an IQOS device.
(English)
Heated Lies

Heated Lies

26 May 2020

Rise Romania reports that Philip Morris is lobbying MPs — and even recruiting doctors to study if switching to IQOS can help lung disease patients — in a bid to stop heated tobacco products being regulated like traditional cigarettes.

  • Philip Morris supported one of the most vocal associations campaigning against tobacco regulation in Romania and recently criticised a draft law that proposes regulating heated tobacco products, such as IQOS, like traditional cigarettes.
  • PMI contacted doctors, via two clinical survey companies, asking them to take part in a study to show the benefits of switching to IQOS from traditional cigarettes for patients with chronic lung disease COPD.
  • Romania’s Medical Academy accused Philip Morris Romania of manipulation when officials stormed medical conferences in the country promoting IQOS as a medical device and a tool to quit smoking.
(Romanian)
Smokescreen: Philip Morris and its plan to convince you that IQOS is less harmful than a cigarette

Smokescreen: Philip Morris and its plan to convince you that IQOS is less harmful than a cigarette

26 May 2020

Despite Mexico’s president announcing a ban on heated tobacco devices, Aristegui Noticias found PMI is still selling IQOS in stores and has been targeting new customers on social media during the COVID-19 lockdown.

  • Mexico’s president banned heated tobacco products in February, but PMI has used a legal challenge to ensure IQOS is still being sold in Sanborns stores, owned by businessman Carlos Slim, as well as in the OXXO and 7-Eleven chains.
  • Prohibited from advertising in traditional media, PMI has used social media to push IQOS during the COVID-19 pandemic, posting “how to” videos on Youtube and publishing pictures of elegant women on Instagram with the line: “Take care — you’re important to us.”
  • Tobacco companies pay an estimated 41 billion pesos in special taxes every year in Mexico, but the cost of treating people with respiratory diseases such as chronic obstructive pulmonary disease is 75 billion pesos a year.
(Spanish)
How Philip Morris is trying to convince you that IQOS is not harmful

How Philip Morris is trying to convince you that IQOS is not harmful

26 May 2020

Macedonia banned smoking over a decade ago. Now, reports IRL, people are turning to IQOS as a way to get round the rules stopping them from smoking in public places.

  • IQOS launches in North Macedonia this month, a year after lawmakers changed the country’s tobacco control laws to allow heated tobacco devices.
  • For nearly two years, however, many people have been crossing into neighboring Serbia, Bulgaria, and Greece to buy the device and Heets tobacco sticks and smuggle them home.
  • Macedonians are taking up IQOS as a trendy way to circumvent what they see as malicious discrimination against smokers, who have been banned from smoking inside public areas for more than a decade.
(Macedonian)
Business Opportunities in the Time of Corona

Business Opportunities in the Time of Corona

26 May 2020

In Japan, OCCRP partner Waseda Chronicle exposes how PMI has lobbied to have its devices exempted from new anti-smoking laws while targeting people under coronavirus lockdown.

  • PMI has taken advantage of new laws banning smoking indoors, which came into force on April 1, 2020, to convince smokers to switch to IQOS. Thanks to years of lobbying by PMI, its heated tobacco devices are exempt from the rules, meaning they can be smoked even while eating and drinking.
  • Philip Morris Japan has been aggressively promoting IQOS during the coronavirus pandemic with newspaper advertisements, urging people to “Try the latest model, now that you’re spending more time at home! Fast, free shipping!” As the virus spread in Japan, the promotions did too.
  • This story is the first in a five-week series by the Waseda Chronicle exploring how weak regulation, and close ties between the tobacco industry and the media, have made Japan a haven for PMI and other big tobacco companies.
(Japanese)

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