Company acquires exclusive rights to commercialize KT&G’s innovative smokeless alternatives outside South Korea
Both companies call on regulators in Korea and around the world to harness the potential of better alternatives to cigarettes to reduce smoking
Philip Morris International has announced that it has entered into a long-term collaboration agreement with KT&G, the leading manufacturer of tobacco and nicotine products in South Korea, under which the company will continue to be the exclusive distributor of KT&G’s innovative smokeless devices and consumables worldwide (excluding South Korea). The new agreement builds on the successful collaboration between the two companies over the past three years, which has seen Philip Morris International commercialise KT&G products in more than 30 markets.
The agreement has a term of 15 years until 29 January 2038, with a triennial performance assessment based on committed volumes to ensure a flexible response to changing market conditions. Phillip Morris International and KT&G anticipate commitments to increase over the full term of the agreement.
"We are pleased with our work with KT&G to date and believe that our long-term collaboration will accelerate the building of a smoke-free future. We want everyone who won't quit smoking to switch to a better alternative that will benefit their own health as well as public health and society as a whole," said Jacek Olczak, CEO of Philip Morris International. "We will be able to build a smoke-free future faster if all smokers have access to better alternatives and to accurate information about these innovative products. Together with KT&G, we urge regulators, scientists and health professionals everywhere, including in Korea, to seize the potential of these technological innovations to get smokers to quit. Since we began our company transformation process, millions of smokers have already switched to smokeless alternatives and stopped using cigarettes altogether. KT&G's products are a complement to our core and world-leading flameless heating alternative - and our continued collaboration will provide adult smokers around the world with more choices so they can quit. Korea is a global leader in science and innovation, and today we are taking an important step towards a better future. Our partnership will accelerate the realization of our shared vision of a smoke-free future by combining the technology and rapid pace of innovation at KT&G and the scientific and commercial infrastructure of Philip Morris International," adds Olczak.
Under the agreement, Phillip Morris International will continue to have exclusive access to KT&G’s smokeless brands and product innovations in development, including products designed for markets in low- and middle-income countries, which will enrich the company’s existing product portfolio of smokeless alternatives. It guarantees KT&G continued access to Philip Morris International’s global commercial infrastructure and the company’s expertise in commercializing smokeless alternatives, which will contribute to the further expansion of KT&G’s smokeless business outside South Korea.
The products to be offered under the agreement will have undergone scientific evaluation to ensure that they meet the regulatory requirements of the markets where they are sold, as well as Philip Morris International’s high standards of quality and scientific substantiation.
