Philip Morris develops zero-tobacco heat stick that may avoid regulations

LONDON, Sept 28 (Reuters) – Philip Morris International (PMI) (PM.N) on Thursday unveiled a zero-tobacco stick for use with its “heat-not-burn” device IQOS, which may help the company avoid tax and other regulations that affect its tobacco products in some markets.

IQOS heats up small packets of ground up tobacco resembling cigarettes but does not burn them, a process the company says potentially results in fewer health risks compared to smoking.

Now, PMI has developed a range of sticks, which it calls LEVIA, that do not contain tobacco but a “non-tobacco substrate” infused with nicotine, with flavours including tobacco, menthol with blueberry and peppermint.

Chief Executive Officer Jacek Olczak said during an investor day presentation that as well as offering another alternative to consumers who may not wish to use tobacco, the product may avoid the heavy taxes or other controls imposed on its other products.

LEVIA “may not be subject to flavour regulations in some jurisdictions” and “doesn’t fit” in existing fiscal categories, Olczak continued, adding PMI was in discussions with regulators in some target markets on how they would approach it.

The company advocates for lower taxes for products referred to by the industry as “reduced risk” compared to traditional cigarettes.

The U.S. Food and Drug Administration has authorised PMI to market IQOS as offering reduced exposure to harmful chemicals versus smoking, though the World Health Organisation says there is currently no evidence that heated tobacco has lower health risks than other tobacco products.

A PMI spokesman declined to provide additional details on when and where LEVIA could launch, or what substance replaces the tobacco.

Some niche companies have developed heat sticks made from tea leaves instead of tobacco, which they sell for use with major players’ “heat-not-burn” technology – a headache for big companies that want only their own sticks to be compatible with their devices.

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