Effect of IQOS introduction on Philip Morris International cigarette sales in Spain: a Logarithmic Mean Divisa Index decomposition approach

Abstract

ObjectivePhilip Morris International, has already introduced its heated tobacco product, IQOS, in many countries and marketed it on the grounds that it is a less harmful alternative to health. The company claims that its intention is for its brand's traditional cigarette smokers to replace these with IQOS has rarely been independently tested. MethodUsing time series data from September 2016 to June 2020, we analyze whether Heets sales have been accompanied by an improvement in the position of Philip Morris International in the market or if they have merely replaced lost sales of the rest of the brands sold by that tobacco company. ResultsSales of traditional cigarettes of all the brands marketed by PMI have been replaced by IQOS since the introduction of this heated tobacco product in Spain. Almost all of the variations observed in IQOS sales are due to the positioning of this product as a substitute for the range of traditional cigarettes marketed by Philip Morris International. ConclusionsAs there is still no consensus that HTPs are explicitly less harmful to health, health authorities must control messages suggesting improved health outcomes thanks to HTP usage when compared to traditional cigarettes. Such messages could generate a false sense of security and lead to an increase in the consumption of tobacco. In Spain Heets in a category that has a lower tax burden than the category of traditional cigarettes. Tax authorities must consider this migration and the impact this may have on tax collection.