July 24, 2015

Philip Morris Italia and the Italian Government sign Memorandum of Understanding to promote tobacco growing in Italy

Strategic partnership with the Ministry of Agriculture to invest approximately 80 million euros annually for the purchase of the highest quality nationally grown leaf tobacco

Rome, 24 July 2015 – Philip Morris Italia, an affiliate of Philip Morris International Inc. (PMI) today signed a Memorandum of Understanding (MoU) for a strategic partnership with the Italian Ministry of Agricultural, Food and Forestry Policies. The agreement provides for PMI an annual investment of approximately 80 million euros and cumulatively up to about 500 million euros through 2020, for the purchase of nationally grown tobacco. Additionally, Philip Morris Italia will work closely with the Italian Government and lay supply chain stakeholders to continue improving the sector’s competitiveness, working conditions in the tobacco farms, environmental protection and sustainable agricultural processes.

"We have a long-standing role as a major purchaser of Italian tobacco, and today’s agreement is a further important step towards ensuring the ongoing stability of one of Italy’s strategic business sectors", said Andre Calantzopoulos, CEO of Philip Morris International. "We’re proud of our heritage in Italy and look forward to continue being a true partner to the country’s economic and social success".

Since 2000, PMI’s commitment to tobacco growing in Italy underscored by the first MoU signed in 2005 has generated close to one billion euros for the sector. With purchases amounting to around 50% of the country’s entire tobacco production, PMI has supported the sector in the development of an innovative agricultural management model, which places the Italian tobacco growers at its center and provides commercial predictability, long-term sustainability and improved competitiveness. Italian tobacco is grown under high quality conditions in the regions of Campania, Umbria, Veneto and Tuscany.

As part of today’s MoU, Philip Morris Italia will work closely with the Italian Authorities, the growers’ associations and other key stakeholders to continue improving safety and the working conditions for the tobacco growers and farm employees, and to fight illegal employment in tobacco producing areas, in accordance with PMI’s Agricultural Labor Practices program.

Philip Morris Italia will also work with Italian Authorities on matters of environmental protection, focusing on the sustainability of production processes with particular emphasis on reducing the use of fossil fuels and related CO2 emissions, promoting alternative energy sources, as well as optimizing the use of fertilizers and minimizing crop protection agents.