The tobacco industry is calling for a world without cigarettes, while simultaneously slowing its arrival.

While the tobacco industry has been communicating for several years about its role in the coming advent of a "smoke-free world" and its concern to develop alternatives to traditional cigarettes, in reality, their lobbying efforts tend to show that manufacturers are still opposed to any form of regulation on cigarettes, which still constitute the core of their activity.

Under Joe Biden's leadership, the U.S. Food and Drug Administration (FDA) has indicated that it is considering implementing two tobacco control measures in the coming years: banning menthol and reducing nicotine levels in tobacco products. Despite their public declarations of promoting a world without cigarettes, manufacturers have unanimously opposed such measures.

Strong opposition to measures to reduce cigarette consumption

The tobacco industry has lobbied extremely hard to oppose these measures. At the local level, manufacturers have spent $22 million trying to prevent the ban on the sale of flavored tobacco products from going into effect. To justify their opposition to these public health measures, cigarette companies have relied on recurring arguments, such as denying scientific evidence of health benefits, claiming that these proposals would lead to an increase in illicit trade, or that they would penalize jobs or funding for health or education. However, not all of these objections are scientifically validated. While the industry's influence on public decision-making is undeniable, the New York Times points out in an article that manufacturers must nevertheless deal with a gradual shift in public opinion in favor of anti-smoking policies.[1].

The profitability of these multinationals is fundamentally linked to the sale of cigarettes

This opposition to these measures stems from the fact that cigarettes, like menthol tobacco products, still constitute the core business of these manufacturers. For example, sales of menthol products represented $65 billion in 2021 alone in the United States, far ahead of sales of e-cigarettes. In this way, a measure like the ban on the sale of menthol tobacco represents a serious and immediate threat to tobacco companies, already facing a steady decline in the traditional cigarette market. Indeed, between 2015 and 2021, the number of packs of cigarettes sold fell from 12.5 billion to 9.1 billion, a decrease of 27%. This trend observed in recent years is in line with the trend of recent decades: in 1954, 45% of the American population was a smoker, compared to 13% today. While manufacturers have simultaneously increased cigarette prices by 29.5% to compensate for declining sales, such an operation does not seem to reassure shareholders, as evidenced by the fragility of cigarette manufacturers on the financial markets.

Alternatives to cigarettes still too timid to ensure a sustainable future for manufacturers

Thus, this rhetoric about alternatives to traditional cigarettes does not seem so easily reconcilable with the return objectives imposed by shareholders. This is especially true since new tobacco and nicotine products are struggling to gain traction with consumers, even when they manage to obtain a regulatory framework as favorable as manufacturers would like. Thus, Juul, the e-cigarette giant, for which the cigarette company Altria spent $12.8 billion in 2018 for a 35% stake, has proven to be, to say the least, not very successful. By July 2022, this investment had lost 95% of its value.[2], following numerous scandals and lawsuits against the manufacturer, particularly due to its targeting of adolescents. Regarding heated tobacco, the national rollout of IQOS was suspended last year by a sales ban from the US authorities. Although it could have done so, the Biden administration did not intervene to lift this ban.

FT

[1] The New York Times, Big Tobacco Heralds a Healthier World While Fighting Its Arrival, 06/11/2022, (accessed 08/11/2022)

[2] The Figaro, Philip Morris pays Altria $2.7 billion to market its heated tobacco device in the United States, 20/10/2022, (accessed 09/11/2022)