Underage tobacco and nicotine use

Experts point to a variety of factors as contributing to underage tobacco use, and recommend a comprehensive response. We’re committed to doing our part to help prevent children from smoking or using nicotine products. Here is what we do at PMI:

• Our marketing complies with all applicable laws and regulations, and we have robust internal policies and procedures in place so that we minimize the exposure to unintended audiences, most importantly youth.
• We support regulation to ensure that only adults can buy tobacco and other nicotine products and support strict enforcement of minimum-age laws and penalties for adults who buy or provide such products to minors.
• We provide guidance to retailers to ensure they are aware of underage regulations and that they understand their role, even in the absence of controls, in preventing sales of tobacco and other nicotine-containing products, such as e-cigarettes, to minors.
  

Responsible Marketing Practices - December 2021 update

Responsible sales and marketing are key priorities for PMI. 

We design our marketing communications and materials to appeal to adult smokers and users of nicotine products and we implement strict measures to guard against youth interest in and access to our products. Our smoke-free products are intended for adults who would otherwise continue to smoke or use nicotine products. Former and never users of nicotine-containing products, especially minors, should not use any tobacco or nicotine products, and non-smokers or non-users should not start. 

In 2019, we conducted a comprehensive assessment of the steps taken across our commercial activities to restrict our product marketing and sales activities to adults and prevent youth access. We made the results public in a report published on our website in December 2019. 

Back then, we made a series of commitments and have since delivered against them.

We promised to report publicly again on our progress after two years. Accordingly, in May 2021, we provided a first significant and comprehensive update in our 2020 Integrated Report and added a second update on the topic in our 2021 Integrated Report published in May 2022.

The report covered a wide range of marketing related topics, including consumer communication and labeling and employee and third-party training and reiterated our commitments towards youth access prevention. It additionally described our efforts to pilot age-verification technology, including through the device. 

We made further progress since we published our Integrated Report and would like to share an overview in this short update.

First, we delivered against our commitment to implement comprehensive Marketing Codes governing the marketing and sales of our products, including smoke-free products. As mentioned in our Integrated Report, we created two Marketing Codes, one for Combusted Tobacco Products, which represents an enhanced version of the Marketing Code that had been in place for years, and one for Non-Combusted Alternatives. As part of the rollout of these two Codes, we trained PMI employees directly involved in developing or commercializing PMI products to ensure understanding of our principles and practices and embed them in their work. We are delivering similar training to the third parties that PMI contracts or engages to develop or commercialize PMI products. 

We published the Codes on our website in 2022. 

The Codes are subject to a robust governance process established in 2021 under the responsibility of the newly formed Marketing Review Council. The Council’s role includes guiding the implementation of the Codes across the organization. 

Second, we apply global guidelines, even when not required by local laws, to all our commercial activities to reduce the likelihood that our products are appealing to minors. In this regard, the use of flavors is another area where responsible marketing is essential. 

Flavors play an essential role in encouraging adults who don’t quit to completely switch to smoke-free products. In 2020, we implemented a central governance process for new flavored heated tobacco products, e-vapor products and combusted products to assess, prior to commercialization, the risk of unintended use of the product. The assessment framework takes into account, among other things, the flavor dimension of the product, how the product will be labeled and marketed, and the regulatory and commercial environment.

A third area of progress lies in a series of commitments we made in our 2019 report on Responsible Marketing Practices, many of which are now formalized in the Codes. For example: 

• Youth usage is now included as a global risk in our annual Integrated Risk Assessment. As mentioned in our Integrated Report, Ethics & Compliance monitors the adherence to our policies on the ground and makes sure we adequately act upon any substantiated incidents of non-compliance.
• We formalized various important principles in the area of digital marketing. For example, we require among other things that PMI affiliates open social media accounts only on platforms where we have reliable audience data indicating the platform is used by at least 75 percent adults in the relevant country. We require our affiliates to check this data at least annually. 
• We also take other measures such as blocking access to individuals found to be underage. 
• At retail, we doubled our mystery shopper evaluations between 2019 and 2021 in selected touchpoints. These evaluations include age checks. 
• We provided our affiliates with a clear set of requirements to follow when performing age verification in relation to online sales, including where age verification is being performed upon delivery. 

As mentioned before, each PMI affiliate must perform at least annually a self-assessment and confirm they comply with the Codes. 

We first piloted age-verification technology in New Zealand via our IQOS VEEV e-vapor product, and also in Corsica where this product was launched in November 2021 with the same technology requiring consumers to be age-verified before they can activate their IQOS VEEV device. These pilots are providing valuable insights.

We are making rapid progress toward a future where cigarettes are replaced by better alternatives, to the benefit of people who smoke, public health, and society at large. As we move forward in our journey, we will continue to strictly implement our Codes and practices and welcome the public’s feedback on the responsible commercialization of our products.