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Here is how Big Tobacco is reading the future of smoking

Every disruption causes traditional businesses to either perish or refigure themselves to survive. Standard city taxis are in a “perform or perish” battle with the likes of Uber, Didi Chuxing, Ola, Lyft in different jurisdictions.

Big Tobacco is starting to read the future of smoking right, likely to invest in smoke-free alternatives to cigarettes. (Image: Reuters)

Every disruption causes traditional businesses to either perish or refigure themselves to survive. Standard city taxis are in a “perform or perish” battle with the likes of Uber, Didi Chuxing, Ola, Lyft in different jurisdictions. Similarly, automobile giants stare at a future where they must compete with the likes of Tesla, Apple and Google, as the shift away from fossil fuel vehicles towards electric and self-driving cars gathers momentum. Some, reading the tea leaves, have already started investing in such technologies so they don’t end the way dinosaurs did. But Philip Morris International, the global tobacco giant, backing the Foundation for a Smoke-Free World sounds like counter-intuitive—how is its securing its future with a death wish? As per a Bloomberg report, the company has committed to spend $1 billion in promoting anti-smoking advocacy.

However, as preposterous as all this sounds, it means Big Tobacco is starting to read the future right. Smoking is on the wane globally; the fall in China, which accounts for 43% of the world’s cigarette consumption, has been particularly disconcerting. Big Tobacco has also suffered serious regulatory backlash in markets such as the US—this July, the US FDA made clear that cigarettes would only be permitted to contain non-addictive levels of nicotine. With vaping, e-cigarettes, smoke-free tobacco getting increasingly getting popular—in no small measure, due to the fact that their regulation is yet to be formalised in many jurisdictions—Big Tobacco’s future rests on quickly switching over to cigarette alternatives. Having lost the first-mover’s advantage to much smaller e-cigarette makers, companies like Philip Morris see value in hedging against the fallout of anti-smoking advocacy by, paradoxically, encouraging it, in the hope that it drives incorrigible smokers towards smokeless alternatives, a market segment that is growing rapidly.

However, as preposterous as all this sounds, it means Big Tobacco is starting to read the future right. Smoking is on the wane globally; the fall in China, which accounts for 43% of the world’s cigarette consumption, has been particularly disconcerting. Big Tobacco has also suffered serious regulatory backlash in markets such as the US—this July, the US FDA made clear that cigarettes would only be permitted to contain non-addictive levels of nicotine. With vaping, e-cigarettes, smoke-free tobacco getting increasingly getting popular—in no small measure, due to the fact that their regulation is yet to be formalised in many jurisdictions—Big Tobacco’s future rests on quickly switching over to cigarette alternatives. Having lost the first-mover’s advantage to much smaller e-cigarette makers, companies like Philip Morris see value in hedging against the fallout of anti-smoking advocacy by, paradoxically, encouraging it, in the hope that it drives incorrigible smokers towards smokeless alternatives, a market segment that is growing rapidly.

With vaping, e-cigarettes, smoke-free tobacco getting increasingly getting popular—in no small measure, due to the fact that their regulation is yet to be formalised in many jurisdictions—Big Tobacco’s future rests on quickly switching over to cigarette alternatives. Having lost the first-mover’s advantage to much smaller e-cigarette makers, companies like Philip Morris see value in hedging against the fallout of anti-smoking advocacy by, paradoxically, encouraging it, in the hope that it drives incorrigible smokers towards smokeless alternatives, a market segment that is growing rapidly.

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