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Philip Morris' iQOS 'Smells Like an Ashtray': Imperial Tobacco

According to a recent report, Philip Morris International Inc. 's PM newly launched device, iQOS, was criticized by tobacco maker Imperial Tobacco plc, which led to an unusual war of words.

Reportedly, Imperial Tobacco's head of scientific regulatory affairs commented that "a lot of black crud" is deposited in the iQOS after usage making it smell "like an ashtray".

Philip Morris launched the heat-not-burn cigarette alternative, iQOS, in Nov 2014 in Nagoya, Japan and Milan, Italy. The iQOS products combine the features of analogs and electronic cigarettes and heat the tobacco instead of burning it. iQOS was also launched in Switzerland in August this year.

Philip Morris conducted eight clinical studies on the device and long-term tests are underway. The company expects to submit the test results to the U.S. Food and Drug Administration in 2016.

The allegation comes at a time when tobacco makers are firing on all cylinders to find healthier alternatives to conventional cigarettes to battle the dwindling volumes of traditional cigarettes.

Reynolds American Inc.'s RAI subsidiary R.J. Reynolds Tobacco Company and British American Tobacco plc ("BAT"), recently joined forces to leverage their technological knowhow to boost their presence in the unconventional cigarette space. The two companies will work on a joint research, development and technology-sharing framework to develop e-cigarettes through 2022 per the multi-year deal.

Further, in Dec 2013, Philip Morris International, carrying a Zacks Rank #3 (Hold), and Altria Group Inc. MO collaborated to ramp up the distribution of their unconventional cigarettes. While Altria sells Marlboro exclusively in the U.S., Philip Morris sells them internationally. Per the deal, Philip Morris will market Altria's MarkTen e-cigarettes internationally and the latter will distribute two of Philip Morris' heated tobacco products in the country. The two companies further expanded their agreement to include joint research, development and technology-sharing framework for developing their unconventional cigarettes.

A better-ranked stock in the consumer staple sector is Primo Water Corporation PRMW sporting a Zacks Rank #1 (Strong Buy).

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ALTRIA GROUP (MO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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