Prevalence of tobacco use is continuing to trend downwards over time in all World Bank country income groups. In 2000, global prevalence of tobacco use among people aged 15 years and older was estimated to be 32.7%. The World Bank projects that global tobacco use prevalence will decline to 18.1% by the year 2030.1 (see Figure 10.19.1).
10.19.1 In Australia and other high-income countries, mature markets
Australia is regarded as a ‘mature’ tobacco market, meaning that consumption is in decline. The best tobacco companies can hope for is to gain a larger portion of a shrinking market, to sell more of their most profitable brands, and that further reductions in the volume of cigarettes smoked and the numbers of people smoking will be gradual.
Market research company Euromonitor International, in a June 2024 report, anticipated a continued decline in cigarette volume sales in Australia. Euromonitor attributes this trend to increasing health awareness among Australians and the implementation of stringent tobacco control measures. Additionally, the report noted that the Australian government intended to introduce further tobacco control policies, potentially accelerating the decline in consumption further.2
With the implementation and strengthening of tobacco control measures remaining significant threats to profitability, tobacco companies are investing heavily in other forms of nicotine and tobacco products that they claim are safer (See Section 10.19.4 below for an overview). The Wall Street Journal noted that revenue from these products remains a tiny slice of overall sales, however, meaning the tobacco industry must rely on traditional cigarettes for years to come. The article cited British American Tobacco’s head of research and development, David O’Reilly: ‘The focus really is, how do we sustain our revenues from combustible products, which fuel the innovation for next-generation products?’3
While tobacco companies remain reliant on revenue from tradition cigarettes, there has been increasing interest from governments for policy options that have the potential to largely eliminate tobacco use. These forward-looking or “endgame” measures are usually defined as policies that could drastically and rapidly reduce smoking prevalence, often with a goal of reaching a predefined prevalence target within a specified timeframe (e.g., reducing smoking prevalence to <5% by a certain year).4-6 Examples of such policies are described in Appendix 2 Forward-looking (“endgame”) measures in tobacco control.
Large tobacco companies have been consistently interfering with governments' efforts to enact such endgame policies, employing tactics such as lobbying, legal threats, and funding front groups to undermine legislation.7 In Malaysia, lobbying successfully led to the removal of generational bans from proposed laws, while in New Zealand, a new Coalition Government repealed smokefree policies on the basis of economic arguments influenced by industry-linked narratives. Similarly, in the UK, tobacco companies lobbied MPs, issued legal threats, and promoted libertarian arguments about personal choice, resulting in significant delays to the passage of endgame legislation.7 See InDepth 10A Strategies for influence, for more information about how the tobacco industry defends its interests.
In Australia, and other high-income countries, smoking prevalence remains higher among the most disadvantaged sectors of the community. The tobacco industry will likely continue to seek new ways to ensure tobacco products remain as affordable as possible. The tobacco industry has adopted a range of strategies in Australia to blunt the impact of tax increases and facilitate price minimising behaviours among people who smoke—see Section 13.4. For more on smoking among people experiencing disadvantage, refer to Chapter 9.
10.19.2 In low and middle income-country markets
According to the World Health Organization:
‘Tobacco use continues to be the leading global cause of preventable death. It kills nearly 6 million people and causes hundreds of billions of dollars of economic damage worldwide each year. Most of these deaths occur in low- and middle-income countries, and this disparity is expected to widen further over the next several decades. If current trends continue, by 2030 tobacco will kill more than 8 million people worldwide each year, with 80% of these premature deaths among people living in low- and middle-income countries.’8
The 2023 World Health Organization report on the global tobacco epidemic showed that while progress has been made in advancing global tobacco control, the majority of the world’s population is still not protected by policy elements regarded as essential components of a comprehensive tobacco control strategy. See Figure 10.19.2.
The comparative lack of tobacco regulation in many countries, and government willingness to embrace tobacco growing and manufacturing in return for substantial financial inducements, make these markets ripe for industry exploitation.10 Investment by international tobacco companies in foreign markets is typically associated with increased per capita consumption, particularly in low and middle-income countries.11-13
In 2019, Philip Morris International (PMI) launched its ‘Unsmoke Your World’ campaign. The campaign promoted a smoke-free future by encouraging people who smoked to quit cigarettes or switch to smoke-free alternatives. Evidence gathered by STOP, the Global Tobacco Industry Watchdog, strongly suggested that PMI’s campaign was nothing more than a public relations effort, and that PMI had been continuing to market combustible cigarettes, particularly in low to middle-income countries. Examples of PMI’s actions that ran counter to its ‘smoke-free future’ claim included:
- shipping more than a trillion cigarettes globally from 2019 to 2021
- opening new cigarette factories in Tanzania and Uzbekistan, with plans to build a new factory in Egypt
- promoting Marlboro cigarettes to 90,000 young people at one of Asia’s biggest music festivals, the Djakarta Warehouse Project in Indonesia
- running YouTube ads for cigarettes in Indonesia and advertising cigarettes near Indonesian schools
- PMI’s CEO telling shareholders at its 2019 Annual General Meeting (AGM), , “Our combustible tobacco portfolio remains the foundation of our business”
- then-COO Jacek Olczak telling investors in 2021: “…75% of our revenues are coming from a combustible business at the very attractive margins, a very high cash conversion...”
- PMI’s CFO, Emmanuel Babeau, boasting in 2021 about the “continued resilience” of its global cigarette business, noting, “In recent months, PM has seen particularly good performance in combustibles in Indonesia, Mexico, Turkey, the Ukraine and Australia.”14
Global Action to End Smoking, formerly known as Foundation for a Smoke-Free World (FSFW), is a foundation similarly funded by Philip Morris International (PMI). An investigation into the foundation concluded that the FSFW primarily served the interests of its funder, PMI. The investigation alleged that FSFW was used by PMI to covertly circumvent the WHO’s FCTC policy prohibiting cooperation between the tobacco industry and government, and to encourage the WHO to reconsider its stance on ‘harm-reduction’ products. Internal documents also revealed that PMI intended to “divide and conquer” tobacco control advocates and researchers "by exploiting the differences of opinion". The FSFW’s attempts to influence WHO, however, were unsuccessful and after this PMI significantly reduced funding to FSFW.15 The WHO, in 2017 and again in 2024, issued statements recommending that governments and the public health community not partner with Global Action to End Smoking (formerly, Foundation for a Smoke-Free World), citing concerns that the foundation “operates using funds from Philip Morris International. Its activities support a broader tobacco industry strategy to mislead the public about the dangers of tobacco and nicotine product use. WHO is particularly concerned about potential efforts to target children and young people, creating a new generation of tobacco and nicotine users.”16 The Tobacco Tactics Group revealed that the foundation, under the title FSFW, accepted US$122.5 million from PMI in 2023.17 The amount is sufficient to fund Global Action to End Smoking at a rate of US$17.5 million per year until 2030.
This evidence underscores the persistent and deliberate efforts of the tobacco industry to prioritise profit over public health, exploiting regulatory gaps in low- and middle-income countries while undermining claims of pursuing a smoke-free future. To read more on the tobacco industry’s strategies for influence see InDepth 10A.
10.19.3 Shifting product focus
Major tobacco companies are continuing to expand beyond traditional cigarette markets and investing in products such as:
e-cigarettes (see Chapter 18),
heated tobacco products (see Indepth Section 18B),
smokeless tobacco (see Indepth Section 18A),
oral nicotine products (see Indepth Section 18C).
Despite claims of “harm reduction”, the actions of major tobacco companies suggest a continued focus on maximising profits from nicotine addiction. As cigarette sales decline globally, with high-income countries leading the declines, these companies are rapidly innovating and marketing alternative products that exploit regulatory gaps, while at the same time maintaining a foothold in traditional tobacco markets.
Major tobacco companies have been diversifying into several other areas including pharmaceuticals, wellness, and cannabis. As the WHO identified in its 2023 report on the global tobacco epidemic, the tobacco industry’s latest moves towards investing in and acquiring ownership of these types of companies are all part of its efforts to bolster its reputation and transform its image, with the ultimate goal of expanding its reach into both policy and the commercial markets.9
Pharmaceuticals
In 2021, as part of Philip Morris International’s (PMI) strategy to diversify beyond tobacco products, PMI acquired Vectura Group, a UK-based pharmaceutical company specialising in inhaled medicines and devices, for approximately £1 billion.18,19 The acquisition faced significant criticism from public health organisations and medical professionals, including the Thoracic Society of Australia and New Zealand (TSANZ) and Lung Foundation Australia, who expressed concerns over a tobacco company owning a business that develops treatments for respiratory conditions. TSANZ CEO, Professor Graham Hall, warned that the deal could prevent medical specialists from prescribing medications that use Vectura technology. At least ten dry powder inhalers prescribed in Australia for chronic obstructive pulmonary disease (COPD) use Vectura technology. Due to ongoing licensing and royalties, inhaler sales and subsidies through the Pharmaceutical Benefits Scheme would have indirectly funded PMI. Experts warned that this could breach Australia’s obligations under the World Health Organization Framework Convention on Tobacco Control. The takeover also posed implications for Australian research, due to policies prohibiting dealings with tobacco companies. Vectura faced being banned from conferences, publishing in journals and research funding and partnerships with research organisations.20 However, in September 2024, PMI announced the sale of Vectura Group to Molex Asia Holdings Ltd. for an upfront payment of £150 million, with potential deferred payments of up to £148 million, depending on performance milestones. This sale resulted in PMI recouping only a fraction of its initial investment.21,22
Wellness
British American Tobacco’s (BAT) in its ‘beyond nicotine’ strategy has been focusing on ‘on- the-go wellbeing and stimulation’.23 Btomorrow Ventures portfolio, the corporate venture capital arm of BAT, includes wellness shots, vitamin gummies, energy drinks, energy gum, and caffeinated chocolates.24
In Australia, Water Street Collective, a wholly owned subsidiary of British American Tobacco, marketed its ingestible Ryde Wellbeing Shots to students at the University of Sydney in 2024. The group’s ‘Ryde Response Team’ distributed bottles of Ryde to students while filming interactions for social media, claiming that the product is revitalising and increases focus, with ingredients including taurine, lemon balm, and ginseng. The University of Sydney was unaware of the marketing event or that the product was produced by a group that was part of a tobacco company.25
Cannabis
Tobacco industry documents show that since at least the 1970s, tobacco companies have been interested in cannabis as both a potential and rival product.26 While the Australian market for cannabis currently remains illegal, 27 major tobacco companies, including Altria,28,29 BAT,30 Imperial Brands31 and PMI32 have expanded their international portfolios to include cannabis and cannabis-related technologies, aiming to diversify their product offerings and capitalise on the growing cannabis market.
In August 2023, Greens Senator David Shoebridge introduced the Legalising Cannabis Bill 2023 to the Australian Senate, aiming to legalise cannabis for adult recreational use nationwide. The bill proposed establishing a national regulatory framework for the production, sale, and use of cannabis. However, in May 2024, a Senate committee recommended against passing the bill.27
10.19.4 Other uses for the tobacco plant
Biofuel Production
Research has explored the tobacco plant as a potential biofuel source. Pilot projects are seeking to turn tobacco into biofuel that could be used in aviation, including a collaboration between Boeing and South African Airways called Project Solaris. Researchers are using selective breeding techniques and genetic engineering to create a source of renewable fuel. According to a report in The Guardian, all of the by-products of tobacco, including sugars, oils and proteins, can be used in products ranging from biofuel and animal feed to soil amendments (nutrients added to improve soil).33
Biopharmaceuticals
New methods in plant biotechnology may also allow inexpensive mass production of medicines using the tobacco plant. Studies are being conducted using the tobacco plant as a platform to manufacture targeted protein-based therapies to treat Ebola, cancer and HIV/AIDS.34
British American Tobacco (BAT) and Medicago—a biotechnology specialist based in Quebec and partly owned at the time by Philip Morris International (PMI)—both explored developing COVID-19 vaccines in early 2020 using tobacco plant technology. However, the World Health Organization warned governments about engaging with the tobacco industry over the development of coronavirus vaccines. Signatories to WHO's Framework Convention on Tobacco Control are restricted in dealing with the industry under the terms of Article 5.3 of that Convention.35
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References
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2. Euromonitor International. Tobacco in Australia. June 2024 2024. Available from: https://www.euromonitor.com/tobacco-in-australia/report#.
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16. No author listed. Alert on Philip Morris-funded Foundation name change to Global Action to End Smoking. World Health Organization 2024. Last update: Viewed 06/06/2024. Available from: https://www.who.int/news/item/06-06-2024-alert-on-philip-morris-funded-foundation-name-change-to-global-action-to-end-smoking?utm_source=chatgpt.com.
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18. Jack S. UK inhaler firm Vectura backs £1bn bid by Marlboro-maker. BBC News, 2021. Available from: https://www.bbc.com/news/business-58193391
19. No authors listed. Directors step down after Vectura tobacco takeover. The Times, 2022. Available from: https://www.thetimes.co.uk/article/directors-step-down-after-vectura-tobacco-takeover-rstb268ql
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21. Philip Morris International. Vectura Fertin Pharma, Inc., a Subsidiary of Philip Morris International, Announces Agreement for Sale of Vectura Group to Molex, 2024. Available from: https://www.pmi.com/investor-relations/press-releases-and-events/press-releases-overview/press-release-details/?newsId=28041.
22. Labiak M. Marlboro owner sells UK inhaler firm over backlash. BBC News, 2024. Available from: https://www.bbc.com/news/articles/c4gdpzqp15eo
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24. Our Portfolio: The brands of tomorrow. Btomorrow Ventures 2024. Available from: https://www.btomorrowv.com/portfolio
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30. NCV Newswire. Tobacco Giant Takes 20% Stake in Organigram for C$221 Million. New Cannabis Ventures, 2021. Available from: https://www.newcannabisventures.com/tobacco-giant-takes-20-stake-in-organigram-for-c221-million/#:~:text=Organigram%20Inc.%2C%20a%20leading%20licensed%20cannabis%20producer%20and,cannabis%20products%20with%20an%20initial%20focus%20on%20CBD
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