January 31, 2023
Philip Morris International (PMI) has announced a long-term collaboration with KT&G, South Korea’s leading tobacco and nicotine manufacturer, to continue to commercialise KT&G’s smoke-free devices and consumables on an exclusive, worldwide basis (excluding South Korea).
It builds on three years of collaboration that has seen PMI commercialise KT&G’s products in more than 30 markets.
The latest agreement covers 15 years, to January 29, 2038, with performance-review cycles and associated commitments, based on volume, to be confirmed for each three-year period, to allow flexibility for evolving market conditions.
PMI and KT&G expect these commitments to increase over the full duration of the agreement, starting with a total commitment for the first three-year period equivalent to 16 billion consumables.
“We have been pleased with the success of our cooperation with KT&G so far and believe a long-term collaboration will accelerate the achievement of a smoke-free future. We want everyone who does not quit smoking to switch to a better alternative, for the benefit of their own health, public health, and society at large,” said Jacek Olczak, PMI’s chief executive.
“KT&G’s lil products play a complementary role to IQOS, the world’s leading heat-not-burn product, and our continued collaboration will provide adult smokers around the world with more options to leave cigarettes behind. Korea is a global leader in science and innovation, and today marks an important milestone that clears the path for a better future.”
The agreement gives PMI continued exclusive access to KT&G’s smoke-free brands and product-innovation pipeline, including offerings for low- and middle-income markets, that will enhance PMI’s existing portfolio of smoke-free products. It gives KT&G continued access to PMI’s global commercial infrastructure and experience commercialising smoke-free products to support the further expansion of KT&G’s smoke-free business outside South Korea.