“Importantly, we are very pleased with the U.S. FDA’s recent authorization of IQOS as a modified risk tobacco product. This is a historic milestone for both public health and PMI, and reflects the FDA’s recognition that IQOS is a fundamentally different product than cigarettes and must be regulated differently.”
In the same press release, PMI addressed how COVID-19 was impacted its business. PMI reports that most of its manufacturing facilities are currently operational, including all of its heated tobacco unit factories. Some cigarette production facilities are temporarily impacted by government-mandated shutdowns or production limitations. These facilities account for less than 5 percent of PMI’s total cigarette production capacity worldwide. Based on current sales trends, PMI believes there are adequate inventories of PMI finished goods across all key markets for cigarettes and across all IQOS markets for heated tobacco units and tobacco heating devices. PMI is not anticipating any out-of-stock situations in any major market and expects consumers will readily be able to find the products they need.
Looking ahead, PMI believes it is now able to provide a 2020 full-year forecast. This forecast assumes that PMI’s key international markets won’t experience national lockdowns in the second half of 2020, that the company’s duty-free business will likely continue to experience turmoil, international industry volume declines of 7-9 percent, and a likely decline in cigarette and heated tobacco unit shipment, among other factors.