Philip Morris International has announced a long-term collaboration with South Korean tobacco and nicotine manufacturer, KT&G.
The announcement follows three years of partnership between the companies, which has seen PMI commercialise KT&G’s products in more than 30 markets.
As part of the new deal, the tobacco giant will continue to commercialise KT&G’s smoke-free devices and consumables globally on an exclusive basis, excluding South Korea.
The agreement covers fifteen years, to 29 January 2038, with performance-review cycles and associated commitments, based on volume, to be confirmed for each three-year period, to allow flexibility for evolving market conditions, PMI noted.
Both companies expect these commitments to increase over the full duration of the agreement, starting with a total commitment for the first three-year period equivalent to 16 billion consumables.
Long-Term Collaboration
Jacek Olczak, PMI chief executive officer, said, "We have been pleased with the success of our cooperation with KT&G so far and believe a long-term collaboration will accelerate the achievement of a smoke-free future.
"We want everyone who does not quit smoking to switch to a better alternative, for the benefit of their own health, public health, and society at large.”
The agreement also includes offerings for low- and middle-income markets, adding to PMI's existing portfolio of smoke-free products.
KT&G will have continued access to PMI’s global commercial infrastructure and experience commercialising smoke-free products to allow the expansion of its smoke-free business outside South Korea.
Products sold under the agreement will be subject to assessment to ensure they meet the regulatory requirements in the markets where they are launched.
PMI and KT&G will seek any necessary regulatory approvals on a market-by-market basis.
'A Smoke-Free Future'
Olczak added, "We will achieve a smoke-free future faster if all people who smoke have access to better alternatives and accurate information about these innovative products.
"Together with KT&G we are calling on regulators, scientists and health professionals everywhere, including in Korea, to embrace the potential of these technological innovations to shift smokers away from cigarettes."
© 2023 European Supermarket Magazine – your source for the latest A-Brands news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
