BIG TOBACCO RETURNS TO CONNECTICUT
With Philip Morris International’s planned headquarters move to Connecticut, the state regains a corporate toehold in Big Tobacco that it lost a decade ago when PMI’s former parent Altria Group moved U.S. Smokeless Tobacco’s operations to Virginia from Stamford.
PMI made the announcement the same day Gov. Ned Lamont signed into law a legalization of marijuana use in Connecticut, with the law’s language including new restrictions on cigarette smoking in hotel rooms and building interiors where people work.
The headquarters decision was unveiled six weeks after PMI elevated Jacek Olczak to CEO, who did not say on Tuesday what office building the tobacco giant will lease in lower Fairfield County for some 200 headquarters staff who work in New York today.
Globally, PMI employs 71,000 people, a few thousand more than Otis Worldwide which according to Fortune is the fifth largest corporation based in Connecticut as ranked by total headcount behind XPO Logistics, Charter Communications, Amphenol and Cigna.
While cigarettes constitute a major piece of PMI’s revenue today through brands like Marlboro, L&M and Chesterfield — cigarette shipments totaled more than 628 million last year, driving $8 billion in profits — the company has been diversifying the past half-decade into smoke-free products with the goal of being a “majority smoke-free company” in its words by 2025.
On Tuesday in Stamford, Olczak spoke openly of “the problem of smoking” and the company’s initiatives to transition away from cigarette sales. Those efforts are centered on IQOS, a cylindrical device that heats tobacco without delivering smoke to the lungs during inhalation. PMI estimates that more than 19 million people use IQOS today, about 14 million of whom have quit smoking cigarettes.
PMI licenses its IQOS technology from Altria Group, which was formed in 2003 from the operations of Philip Morris. The company would spin off PMI as an independent company five years later, as states and regulators increased their scrutiny of cigarettes.
The Food & Drug Administration announced in 2011 it would regulate vaping under the Family Smoking Prevention and Tobacco Control Act, with Altria expressing general support for the decision but questioning any “one size fits all” form of regulation which it said would stifle innovation of new products that could help wean smokers off of cigarettes.
UST long touted its Skoal and Copenhagen tobacco dip as a smoke-free alternative to cigarettes, though the Centers for Disease Control & Prevention notes chewing tobacco tobacco and pouches are addictive and can cause cancer of the mouth, throat and pancreas.
Altria spent $10.4 billion in 2009 to acquire UST, three years after the smokeless tobacco company moved its headquarters to Stamford from Greenwich where it had been based since 1970. Altria promptly took UST’s staff south to its corporate headquarters in Richmond, Va., at a cost of about 350 corporate jobs in Connecticut.
In 2020, U.S. Smokeless Tobacco shipped about 820 million tins and pouches, including sales of On nicotine pouches which Altria added two years ago years ago in acquiring Burger Sohne, located about a two-hour drive from PMI’s operational headquarters in Lausanne, Switzerland.
PMI has not made any equivalent move into chewing tobacco and snuff. According to researchers with the University of Bath in the United Kingdom, PMI was the last of the major tobacco companies to invest in chewing tobacco, acquiring a small Swedish maker of moist snuff in 2006 but discarding the venture within a decade.