Philip Morris International
) has commented on the directive passed by the European Union
(EU) banning tobacco products in the European market.
As per media reports, in Oct 2013, the European Union Assembly
decided that they will not interfere with electronic cigarette
sales. However, they have accepted the legislation drafted by the
European Union health ministers that requires the tobacco
companies to include both pictorial and text alerts on the
cigarette packs to dissuade smokers. Moreover, the law requires
the warning to cover more than 65% of both the front and back
covers of the packs.
The 28-nation strong European Union authority aims to ban the
sale of menthol and other characterizing variations of cigarettes
and roll-your-own tobacco products.
These rules will pose a problem for the tobacco biggies who
are facing challenges from the strict anti-smoking campaigns
launched by governments around the world. Tobacco companies are
increasingly relying on packaging to build brand loyalty and grab
consumer attention, especially after the government curbed
advertising in magazines, billboards and on TV.
Tobacco biggies like Philip Morris,
Reynolds American Inc.
Altria Group Inc.
) subsidiary PM USA are not happy with the decision of the EU
assembly. PM, which carries a Zacks Rank #3 (Hold), opines that
though the decision has brought partial relief, with electronic
cigarette decision, it fails to meet the tobacco industry's
expectation. They have pointed out that the government is
imposing strict rules on the legal market, without taking any
measures to curb the illicit cigarette trade which, in turn, is
raising the smoking rate.
We now await the Food and Drug Administration's (FDA) decision
on the e-cigarette. The anti-smoking activists have requested the
FDA to impose restrictions on e-cigarettes. FDA has passed a rule
compelling tobacco companies to print thought-provoking images on
cigarette packs inducing smokers to refrain from smoking. Also,
governments of Australia and New Zealand have made plain
packaging mandatory for cigarette packs.
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