Why does Israel's top cigarette-maker want people to stop smoking?

Philip Morris International wants Israelis to stop smoking cigarettes, and move toward alternatives like vaping — but Israeli tax regulation is standing in the way of the shift.

Deep breaths: Smoking pollution in Tel Aviv (photo credit: ILLUSTRATIVE PEXELS)
Deep breaths: Smoking pollution in Tel Aviv
(photo credit: ILLUSTRATIVE PEXELS)

Israelis can’t seem to stop smoking. According to the Health Ministry, the percentage of smokers in Israel has remained at a static 20% for years, despite the steady growth of the population. That means that the number of smokers in Israel is rising hand-in-hand with the number of people living in the country.

Israel’s reliance on combustible cigarettes is slightly bizarre at a time when dozens of other developed nations around the world are making the switch to more innovative methods of tobacco consumption; namely vaping. Why is it that Israel – otherwise known for its innovative approaches to widespread issues – is lagging so far behind the rest of the developed world when it comes to smoking reduction?

According to Philip Morris International, a global tobacco product manufacturer and Israel’s leading cigarette provider, the answer is in taxation.

From a business perspective, PMI wants to make money, but the company has read the writing on the wall and it seems like smoke-free alternatives are the prime tobacco consumption methods of the future. PMI’s aim is to remain a leader in that shift, having announced an ambition for smoke-free products to account for more than 50% of its total net revenues by 2025.

“Several years ago, Philip Morris decided to make a dramatic, even historic change for a global tobacco company. Our vision for a ‘smoke-free future’ has the potential to affect more than a billion adult smokers worldwide,” said Roi Amit, PMI’s general manager in Israel. “PMI is stating very clearly that if you don’t smoke, don’t start. If you smoke, quit. If you don’t quit, change. We have set as our goal to reduce as much as possible the effect of conventional cigarettes (based on burning tobacco) through the development of advanced technological alternatives, based on science and research, and to offer them as alternatives for adult smokers who do not quit smoking. Today, most of the company’s resources are dedicated to the realization of this vision.”

“PMI is stating very clearly that if you don’t smoke, don’t start. If you smoke, quit. If you don’t quit, change. We have set as our goal to reduce as much as possible the effect of conventional cigarettes (based on burning tobacco) through the development of advanced technological alternatives, based on science and research, and to offer them as alternatives for adult smokers who do not quit smoking. Today, most of the company's resources are dedicated to the realization of this vision.”

Roi Amit

All tobacco use is harmful — but smoke is the worst part

It should be noted that vaping nicotine is not good for you either. It is empirically bad for your health.

With that said, vaping might have a marginal advantage over smoking, in that, according to some studies, it can reduce the risk of nicotine poisoning and the amount of harmful chemical intake and second-hand inhalation for those around the user. If someone is already smoking, PMI wants to get them to use alternatives such as vaping instead.

INDEPENDENT STUDIES performed by the English government public health agency Public Health England and the Tobacco Advisory Committee of the UK Royal College of Physicians, say vaping is as much as 95% healthier than smoking. Other experts claim that vaping is just as dangerous as regular smoking.

During an interview with The Jerusalem Post, Amit and a handful of other PMI executives were forthcoming in acknowledging that cigarette smoking isn’t healthy.

But when asked whether PMI had considered stopping cigarette production altogether – considering that they know full well just how harmful it is — they stated that if they were to just stop manufacturing cigarettes immediately, one of the other leading cigarette brands in the market would just swoop in and fill the gap.

Instead of allowing that to happen, they want to use their market share to their advantage, and to gradually move people away from cigarettes (produced by them or anyone else), and toward smoke-free products (ideally theirs). But first, they need to address a major hurdle standing in their way: Israeli regulators.

PMI is trying to pressure Israeli regulators into changing their harsh stance on vape taxation, which they claim is one of the leading causes behind Israel’s static percentage of smokers amid a trend of global cigarette usage reduction.

The vaping tax situation

In Japan, the overall taxation on combustible cigarettes as of 2020 was 61%; the taxation on heated tobacco products (HTP) was 52.14%. That 19% difference in the taxation on cigarettes vs HTP has played a significant role in over 22% of adult male smokers making the switch to the less unhealthy option.

Similarly, in Denmark (which boasts a 154% difference in favor of HTP), the UK (73%), Germany (123%), Italy (107%) and a bevy of other nations, the number of cigarette smokers has fallen in concert with the more favorable taxation of heated tobacco products.

As previously established, Israel’s percentage of smokers has remained stable (and therefore the number of smokers in the country is rising with its population count). Why?

In a list of 25 (out of 39) OECD nations, Israel is the only country which taxes HTP at a higher rate than it does combustible cigarettes, by about 6%. Israel’s outlier status among those countries makes a fairly strong case for PMI’s argument.

“In order to be successful on the journey [to a smoke-free world], a lot of things need to happen which, in other countries, are happening; but in Israel, they are not,” said Amit. In that sense, he pointed out, “Israel has failed where other countries have been successful.”

“I do not blame the Health Ministry. It’s not as if they haven’t been trying,” Amit said. “What I am saying is that we should be doing more. To advance faster, public health institutes should collaborate with the tobacco industry to advance the concept of tobacco harm reduction in Israel. Combined with increased safety standards, stricter enforcement and prevention of sales to young people and teenagers – which is also the strategy in other countries – the call out here is for the regulator to form a local strategy that is based on reducing the harm caused by combustible smoking products, and to encourage alternatives to be offered to those who would otherwise not stop smoking.”