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Tobacco giant Philip Morris will stop selling cigarettes in NZ tax break or not

Tobacco company Philip Morris says it will stop the sale of cigarettes in New Zealand when required to by law, regardless of whether the government lowers taxes on its new smokeless tobacco products.

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New Zealand General Manager James Williams says they want different tax treatment for their new products only. Source: Breakfast

The United States company produces Marlboro, Benson and Hedges, Rothmans and other brands of cigarettes through subsidiaries, but has recently switched its attention to its new IQOS product.

The device heats a small stick of tobacco similar to a cigarette, but does not burn it, which releases nicotine without the associated smoke and by-products like tar.

It was reported last week that Philip Morris was seeking a tax break as part of its plan to stop selling cigarettes in New Zealand ahead of the government's 2025 goal of making the country smokefree.

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The US based company says it aims to stop selling cigarettes in New Zealand but wants tax breaks on smokefree tobacco sticks. Source: 1 NEWS

Speaking this morning on TVNZ 1's Breakfast programme, Philip Morris' New Zealand General Manager James Williams clarified that it will remove cigarettes from the shelves - tax break, or not.

Mr Williams said his company's point is that the IQOS products, which are reportedly a healthier alternative to traditional cigarettes, should not be treated the same way as cigarettes in terms of excise charges, because they do not carry the same health risks.

He said the government has recognised this, and is now working on new taxation models for the new wave of smokeless nicotine products.

"I think we just need to clarify that we don't need any special treatment from the government - we'll exit cigarette sales irrespective of what happens and we'll comply to all the regulations that get set," Mr Williams said.

"The regulations that are currently in New Zealand are not suited for these products, and the government's recognised that."

Asked why his company doesn't simply remove cigarettes from the shelves right now, if they are not seeking a tax break, Mr Williams said "it's a very complex issue".

"Everybody knows that cigarettes are addictive, so if we remove our products, effectively, consumers will move to an alternative cigarette.

"I think the bigger opportunity is to provide consumers a better choice of safer alternatives.

"All our portfolio that will be launching in New Zealand is a combination of this heated cigarette from iQOS, but also e-cigarettes and a plethora of other technologies that we'll commercialise over time."