Philip Morris International (PMI) is preparing to launch its flagship heated tobacco device IQOS in Austin, Texas, indicating it will be the first testing ground for its US entry, job adverts on LinkedIn show.
IQOS, the top selling heated tobacco device globally, sits at the core of the world's biggest tobacco company's efforts to transform its image from a purveyor of cigarettes to a driving force behind the switch to healthier options.
Investors are waiting to see if PMI can create a market for heated tobacco in the US, where vaping currently dominates.
The country offers PMI a substantial base of new users and, potentially, a hefty new income stream that could prove transformative as it tries to generate an increasing proportion of revenue from products other than cigarettes.
PMI spent the vast majority of $10.7 billion (£8.5bn) of expenditure on smoking alternatives between 2008 and 2022 on IQOS' development.
The Marlboro maker had said it planned to launch the device in four cities in two US states starting with one city in the second quarter, ahead of a broader roll-out likely in 2025. However, it had not released further details, including which cities or states it is targeting.
Job adverts posted on LinkedIn reveal that the company is laying the groundwork for an IQOS launch in Austin, Texas. The adverts, posted this month, include positions as field sales representatives, territory managers and retail sales advisors.
Whether or not IQOS takes off in the US will be significant given the market's size. Euromonitor estimates total US nicotine sales, excluding nicotine replacement therapies, were worth some $143.6bn in 2022.
While cigarettes accounted for the vast majority of that, Euromonitor forecasts their value will shrink by 30 per cent by 2027. The value of vapes, heated tobacco products and other alternatives will rise by 36 per cent over the same period, it says.
Testing ground
Products like IQOS work by heating up sticks of ground up tobacco without burning them in an attempt to avoid the harmful chemicals released via combustion.
Heated tobacco products have so far been largely absent from the US market aside from limited sales of IQOS managed by PMI's former parent, Altria, and another product offered on a limited scale by British American Tobacco (BAT).
PMI paid Altria $2.7bn for the rights to market IQOS in the US in 2022. BAT has subsequently cast doubt on the category's potential in the country, where vaping and other alternatives are already well established.
Texas offers an interesting trial market given its broad demographics, ranging from super rural to highly urban, said Brett Cooper, managing partner and analyst at Consumer Edge, an equity research firm. He added that diverse cities like Austin, Houston and Dallas provide access to a wide range of consumer groups.
Tobacco taxes in the state are also relatively low, according to Centers for Disease Control and Prevention (CDC) data. The excise tax rate on a pack of cigarettes in Texas stood at $1.41 in September 2023, the data shows - far higher than the 17 cents in Missouri but also well below the more than $5 per pack in New York.
Texas introduced new laws around e-cigarettes in January, restricting devices that resemble food products like candy or fruit juice, or that include a symbol or celebrity image targeted at minors or depict cartoon-like fictional characters.
PMI bets IQOS can win a 10 per cent share of US tobacco and heated tobacco unit volume by around 2030.
Ahead of IQOS' launch, the company has also been building out its lobbying firepower across the US. The company wants two thirds of its revenue to come from "smoke-free" products by 2030.
In the largest retail haul ever recorded in the county, authorities in Lincolnshire have seized over 90,000 cigarettes, 300 vapes, and 10kg of hand-rolling tobacco from seven shops.
The planned operations, Operation Nevada, took place on Tuesday (18) and Wednesday (19).
It involved officers from Lincolnshire Police’s Neighbourhood Policing Teams (Boston, Spalding and Holbeach), the Intelligence Development Unit, The Alcohol Licensing Team, with partners from Lincolnshire County Council Trading Standards, Home Office Immigration Enforcement, and Wagtail UK’s tobacco dog and handler.
Lincolnshire Police described it as "the biggest retail haul" in the county to date, with more than 40,000 of the cigarettes found at one of the premises.
The stores in Lincolnshire that were found stocking illicit tobacco and vape products:
American Vape, West Street, Boston
Boston Shop, West Street, Boston
The Vape Centre, West Street, Boston
Boston Food Market, Red Lion Street, Boston
Bode, High Street, Boston
Nida, Winsover Road, Spalding
Max’s Mini Market, Winsover, Road, Spalding
A part of the seizure in Boston comprised super vapes, which the police described as "the largest capacity illegal vape ever seen". Each of these vapes contains the nicotine equivalent of 375 average king size cigarettes.
Nicotine is a highly addictive chemical classified as a poison. Intake at any level is far from ideal. The amounts contained in the ‘super vapes’, could cause nausea, headaches and dizziness.
The fact that local statistics show the shops targeted are 14 times more likely to sell such products to persons under the age of 18 is particularly concerning, stated the police.
The police has arrested one person.
As a result of these enforcements, Trading Standards are now conducting separate criminal investigations on the people in these shops and the business owners further up the chain.
A lot of the cigarettes were counterfeit; the maximum penalty for selling illegal cigarettes is up to ten years imprisonment and/or an unlimited fine.
Trading Standards will continue to apply for closure orders on all premises that have been found to be selling illegal tobacco products. Where Closure Orders are issued, the landlords of the premises will be sent a formal notification in the form of a joint letter from Trading Standards and Lincolnshire Police.
The letter advises them of the criminal activity taking place on premises within their overall control.
The police states, "It is our aim to work with landlords to remove problem tenants whilst the Closure Order is in operation. To support Landlords, Trading Standards provide evidential support and attend hearings.
"However, landlords may be criminally liable where they ignore warnings, offers of assistance; and continue to receive money from criminal activity."
Inspector Ian Cotton said, “As a result of this latest round of enforcements we now have numerous intelligence opportunities that will be followed up to establish the key players in the trade in illicit goods in our local community and beyond.
“Tackling issues related to illicit product sale and anti-social behaviour (ASB) can be challenging, but it’s clear that our efforts and partnership collaboration are making a positive impact.
“Shops selling illicit and counterfeit goods can expect to be closed. This trade permeates so many areas of risk – public health, crime and ASB in shop localities, tax evasion, illegal working, and illegal entry to the UK.
"We will continue to do as much as we can to disrupt these criminals. Lincolnshire leads the way with its partnership work in this area and my team, along with our partners, are resolute in our determination to disrupt this pervasive criminality in line with our policing priorities.”
Principal Trading Standards Officers Andy Wright said, "These premises exist solely for the purpose of selling illegal cigarettes and vapes. Without sales of these products, they would not be viable. We are aware of a number of law-abiding businesses that have been put out of business by this unfair competition.
"All the premises targeted are found in what the public perceive as high-risk crime areas of Boston and Spalding, and in areas where women in particular feel at risk.
"Clearly the presence of businesses founded on crime, and operated by criminals in these areas aggravates the situation. It is no exaggeration to say that Lincolnshire Trading Standards and our partners have adopted a unique and innovative plan that is proving effective in the long term and is being replicated nationwide. We anticipate continued action.”
Following a disappointing Golden Quarter, retailers had a strong start to the new year, as latest data shows rise in total UK retail sales volumes with a particular considerable rise in food stores sales volume, prompted by more people eating at home.
According to Office for National Statistics (ONS) retail sales figures for January released today (21), retail sales volumes are estimated to have risen by 1.7 per cent in January 2025, following a fall of 0.6 per cent in December 2024.
ONS figures show that food stores sales volumes rose by 5.6 per cent on the month. This is the largest rise since March 2020, putting index levels at their highest since June 2023.
This follows four consecutive falls on the month, ending in December 2024 when index levels were their lowest since April 2013.
Supermarkets, specialist food stores like butchers and bakers, and alcohol and tobacco stores all rose over the month. Retailers suggested that the increase was because of more people eating at home in January.
Non-store retailers' sales volumes rose 2.4 per cent on the month, partially rebounding from a 3.4 per cent fall in December 2024. Retailers in this sector reported post-Christmas sales remaining strong.
Non-food stores – the total of department, clothing, household and other non-food stores – fell 1.3 per cent over the month. Clothing retailers and household goods stores suggested the fall was because of reduced consumer confidence.
Commenting on the figures, Silvia Rindone, EY UK&I Retail Lead states, "January sales figures had a strong start to the new year, with total UK retail sales volumes estimated to have risen by 1.7 per cent month on month.
"Following a disappointing Golden Quarter, where sales struggled to gain momentum, the latest ONS data indicates a more stable foundation for retailers as they move into 2025.
“Food store sales volumes in particular saw robust growth in January 2025, recovering from declines in recent months. However, it is important to note that, more broadly, sales volumes fell by 0.6 per cent in the three months leading up to January 2025 compared to the three months ending in October 2024."
The EY ITEM Club Winter forecast predicts consumer spending will grow by 1.6 per cent, an improvement from the 1 per cent growth observed in 2024. However, the weaker-than-expected end to 2024 means retailers need to remain vigilant in their strategies, Rindone added.
“While macro trends such as growing consumer income in real terms and lower interest rates are positive news, the benefits are not being felt evenly across the retail landscape.
"Overall growth in the retail sector remains sluggish, masking a mix of both strong and poor performers within every retail sub-sector. Performance is highly variable and largely dependent on how well retailers have optimised their customer offerings—both digitally and physically—over recent years.
"Those who have not invested in their propositions are now struggling to find the space to invest further in increasingly challenging conditions."
Rindone calls on retailers to build a broader proposition that goes beyond selling products.
"Designing service offerings that effectively solve customer problems is one example of how they can foster loyalty and drive sales. Additionally, investing in strong brands that drive trust will be crucial for retailers looking to differentiate themselves in a competitive market.
“While January has brought a positive start to the year, the retail sector must remain agile and focused on customer-centric strategies to thrive amidst the anticipated economic challenges ahead.”
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Help with prepayment energy meters for low-income households
PayPoint and Fuel Bank Foundation are working together to deliver fuel vouchers to support those most in need.
Each year in the UK, many households who prepay for their energy lose access to heat, light and power because they can’t afford to top-up their meter. The Fuel Bank Foundation is the only national charity who gift energy top-up vouchers for prepayment meters to help people and families living at the sharp end of fuel poverty.
Those who receive Fuel Bank energy vouchers can redeem their pre-paid top-up vouchers for energy meters in any PayPoint store, to get their heat, light and power back on as quickly as possible. Therefore, it is so important that these emergency energy vouchers are applied directly and immediately to the customers energy key or card, so they receive the necessary support. They should not be exchanged for cash, as this does not address the essential need of restoring warmth, light, and power to their homes.
Fuel Bank Foundation has supported more than 1.9 million people since launching in 2015. With energy costs showing no signs of coming down and following the Government announcement last year that only those claiming pension credit or other means-tested benefits will receive the Winter Fuel Payment, the charity anticipates that demand for support this year will be greater than ever.
Whilst the fuel voucher addresses the immediate need of keeping the lights and heating on, Fuel Bank Foundation also provide person-centred advice that empowers the people they support to address the issues that are making things difficult for them.
“Over the next few months, we estimate that more than a quarter of a million people will turn to Fuel Bank Foundation for emergency help because they can’t afford to top-up their energy meter or fill their heating oil tank, coal bunker or log store," said Matthew Cole, CEO of Fuel Bank Foundation. "Sadly, many of them will be young families with children at home or vulnerable.
“Without our help, they will be forced to live in cold, damp homes, with no energy for heating, lighting, cooking or cleaning. Living in a cold home can have a devastating impact on the physical health and mental wellbeing of both the young and old. Many children, for example, are forced to go to school tired, hungry and in dirty uniforms, and are condemned to a lifetime of poverty.
“There are around six million households in the UK in fuel poverty. It’s sorrowful to think that so many people face disconnection simply because they cannot afford energy. The consequences are profound: children unable to bathe in warm water, parents skipping meals to pay for energy, and elderly people living in homes that exacerbate health conditions. That is why it is so important that we get help to people as quickly and as easily as possible.”
Jo Toolan, Managing Director of Payments at PayPoint said: "Supporting Fuel Bank Foundation has never been more important to guarantee effective distribution of the scheme and ensuring it is able to support as many people as possible.
“Through our extensive network, we're ensuring that energy support is accessible when and where it's needed most. This reinforces our commitment to ensuring retailers serve as a vital support pillar for communities across the UK, whilst also offering additional sources of revenue generation for our store owners.”
"With over 30,000 locations across the UK, more than 99 per cent of Brits live within one mile of a PayPoint retailer partner. The stores offer convenience and flexibility for consumers, including those topping up energy meters, thanks to their accessibility and early-until-late opening hours. This is particularly important for households on prepayment meters during the colder months, as they need to top up meters outside of standard working hours.
"The provision of emergency fuel voucher redemption is so important, and demonstrative of the key role PayPoint retailer partners play in their local communities, ensuring that vulnerable households receive fast, efficient, and secure access to essential fuel support during challenging times."
JTI has announced the appointment of Stephane Berset as UK General Manager.
Stephane will head up the UK division and has taken over the position from Tom Osborne. Having been with the business for 24 years, Stephane has developed vast experience across multiple functions and continents.
He joined JTI in 2001 and has extensive knowledge of the company having worked in various JTI marketing and commercial roles worldwide in Hong Kong, Switzerland, Turkey, Austria, Greece, Italy, Czechia and the United Kingdom.
His previous role was as General Manager for JTI Czech Republic, Hungary & Slovakia, from 2021 to 2024. Before that, Stephane held the position of Marketing Vice President at JTI UK from 2017 to 2021.
I’m pleased to re-join the exceptional JTI UK team after my time in Europe," said Berset. "My priorities are to maintain JTI’s leading market share in the UK, grow our presence in Reduced Risk Products and adapt our business to any new regulation in the Tobacco and Vapes Bill. The measures contained within the Bill pose significant challenges for both JTI UK and the retail sector, and it will give the already rampant illicit trade yet another boost.
"JTI UK remains committed to working with and supporting our retail partners to ensure that together we can continue to thrive, meet the evolving needs of our UK consumers and stamp out illegal activity.
"At this time, it is more important than ever for the voice of the local retailer to be heard. We encourage retailers to continue to speak with trade bodies and contact local MPs to share their views on the challenges and negative impacts of this legislation.”
Tom Osborne has moved to a new role as Regional President North Asia at JTI and is now based in Japan.
Authorities have seized more than £30,000 worth of suspected counterfeit and unfit-for-sale vapes and cigarettes from a shop in Rotherham last week following a joint operation by South Yorkshire Police and trading standards officers.
As informed by South Yorkshire Police on Wednesday (19), the raid on Feb 13 was launched in response to intelligence from residents and local businesses, who had raised concerns about anti-social behaviour linked to the store.
The store has not been identified by the authorities.
During the inspection, officers uncovered £28,000 worth of counterfeit vapes, vape liquids, and cartridges, along with over 150 packs of illegal cigarettes valued at approximately £1,400. The operation forms part of an ongoing crackdown on the sale of illicit tobacco and vape products in the region.
Rotherham South NPT Inspector Darren Birley said, “Not only do these vapes undercut legitimate businesses, but they also pose a serious risk to people’s health. It isn’t uncommon for these counterfeit products to find their way into the hands of children.
“This is a great piece of work which continues to highlight how important our ongoing work with Rotherham Council is to ensure the safety of our local communities."
Rotherham Council’s Assistant Director of Community Safety and Street Scene, Sam Barstow said, "We are committed to keeping people safe from harm across the borough. This operation is another example of the close partnership working between Rotherham Council and South Yorkshire Police.
"Joint operations of this nature to tackle illegal tobacco and vape products have resulted in over £639,000 worth of illicit items being removed from sale.”
Earlier this month, almost 10,000 counterfeit and smuggled cigarettes and other tobacco and nicotine-based products have been seized from multiple stores in Oxfordshire.
As reported by Oxfordshire County Council, the raids, carried out on Jan 21, were part of Operation CeCe, a national initiative to tackle the sale and supply of illegal tobacco products.
Premises involved included off-licences, convenience stores, food retailers and barbers in Banbury, Kidlington and Oxford, the council stated.
The operation resulted in the seizure of 9,340 illegal cigarettes, 700g of counterfeit hand rolling tobacco, 180 unit packs of non-compliant nicotine pouches and 42 disposable electronic cigarettes, or vapes, with a capacity of nicotine containing liquid nine times the maximum allowed.