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Analyzing big tobacco’s global youth marketing strategies

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A Cigarette by any other name is still a cigarette

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The truth behind Philip Morris’ cigarette-free future

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Inside the Philip Morris campaign to ‘normalize’ a tobacco device

(Reuters) – At Germany’s Bambi Awards for the media industry in November, celebrities posed for red-carpet photos against a backdrop of established luxury brands. Alongside the likes of Mercedes-Benz and Swiss watchmaker Chopard was a newer name: IQOS, a “reduced risk” heated-tobacco device sold by cigarette maker Philip Morris International Inc.

Across Europe, Asia and South America, the tobacco firm has affixed the IQOS brand to music festivals and art exhibits. The company also markets through IQOS lounges at mountainside resorts in the Pyrenees and in fashionable neighborhoods of Rome. Throughout Europe, it has partnered with “IQOS friendly” bars and restaurants – closed to cigarettes but open to IQOS.

Such promotions are part of a wide-ranging “normalization” strategy by Philip Morris (PM.N) to scrub its image as a purveyor of cancer-causing cigarettes and present its new smoking alternatives as youthful, upscale lifestyle products, according to a ten-month study by tobacco researchers at Stanford University, who shared it exclusively with Reuters before its release on Friday. The marketing strategy mimics that of tobacco companies in the mid-20th century, when they started associating cigarettes with Hollywood and high society.

“Philip Morris, as a company name, is somewhat of a pariah,” said Robert Jackler, a professor who led the study and heads Stanford’s Research into the Impact of Tobacco Advertising. “IQOS is an attempt to sanitize their product line.”

The Stanford researchers said their study was spurred in part by a May 2019 Reuters investigation that found Philip Morris had used young online personalities, including a 21-year-old woman in Russia, to promote IQOS. The company’s internal marketing standards prohibit it from using youth-oriented celebrities or “models who are or appear to be under the age of 25.” The Reuters report prompted the company to acknowledge it had violated its own policy and to suspend its use of social media influencers.

The Stanford study found that, although the company suspended its “most visible” social-media influencer programs, IQOS marketing continues to stray substantially from its corporate standards on youth-oriented marketing.

“Its use of youth-oriented social media channels, trendy pop music festivals and celebrity influencers are mis-aligned with their commitment to exclusive ‘adult smoker’ targeting,” the Stanford report concluded.

Philip Morris declined to answer detailed questions from Reuters on its IQOS marketing strategy and the Stanford findings, saying it did not have access to the full report. “However, we doubt that there is anything PMI could say or do that Dr. Jackler, and others who criticize our scientific commitment and smoke-free vision, would ever find satisfactory.”

The IQOS device is central to the firm’s efforts to overhaul its image through such initiatives as its “unsmoke” campaign, which promotes such “smoke-free” alternatives as a way to accelerate the shift away from cigarettes. The device heats up but does not burn packages of ground-up tobacco, which resemble small cigarettes, to create a nicotine-filled aerosol that is similar to that produced by e-cigarettes, which heat flavored liquid nicotine.

At this year’s Davos World Economic Forum in Switzerland – a gathering of some of the world’s richest people – Philip Morris set up an “Unsmoke your mind” lounge, where panelists argued against regulations preventing “truth in marketing” by tobacco firms looking to promote smoking alternatives.

IQOS is sold in about 50 countries, including the United States through a partnership with U.S. Marlboro maker Altria Group Inc. The two companies pledged to regulators that they would market the device only to adult smokers, showing sample advertisements of adults conservatively dressed in business attire.

But in other markets across the world, the Stanford study said, Philip Morris uses “coaches” and “ambassadors” to market IQOS. In Romania and Russia, employment agencies recruit attractive women as young as 19 to market IQOS, according to job postings mentioned in the Stanford report and reviewed by Reuters.

Instagram postings for Be Like Me, a Romanian marketing agency, show young women posing with the IQOS device in recent months, often wearing robe-like uniforms in malls. The Instagram account for RBT Group, a staffing agency in Russia that markets IQOS, similarly shows photos of attractive young women in front of IQOS signs or posing with other “coaches.”

Be Like Me and RBT Group could not be reached for comment.

Other Instagram accounts with the “IQOS” name, including one called “iqostyle.arm,” based in Armenia, continue to show young women posing with the IQOS in what appear to be professional photographs. One photo on that account from last July – two months after Philip Morris said it had suspended all influencer marketing – showed Nika Shuvalova, a 22-year-old Ukrainian model, posing in a swimsuit on a boat with an IQOS.

Shuvalova could not be reached for comment.

A message sent to the “iqostyle.arm” Instagram account was returned by someone calling themselves Tiko, who said the IQOS postings were a “hobby” and that he had not been paid by Philip Morris.

The stakes for Philip Morris are huge: The company invested $6 billion in developing “smoke-free” products such as IQOS in hopes of staving off a trend of declining global cigarette sales. In 2018, company CEO Andre Calantzopoulos told shareholders that it hoped to receive about 40% of its revenue – nearly $20 billion – from “reduced risk” products by 2025.

Internal Philip Morris documents underscore the importance of its larger strategy: “Make ‘normalization’ a PMI priority and imbed this mindset into the organization,” read an internal company document from 2014, reviewed by Reuters as part of a 2017 investigation. The document also cited “the threats posed by PMI/industry de-normalization” – such as lobbying bans and exclusions from international treaties and trade agreements – “and the need to reverse this trend to drive future growth.”

The Stanford researchers pointed to wide-ranging company efforts to associate IQOS with fashion, art and popular culture in a way that cigarette brands such as Marlboro have been unable to do, given changing social attitudes and laws around the world that prohibit such advertising and promotions.

IQOS has been present at events such as Germany’s Bambi Awards – which honor stars in TV and film, sports, art and music – as well as that country’s Playboy Playmate of the Year Awards.

Philip Morris worked with British sculptor Alex Chinneck on a dramatic installation at the 2019 Milan Design Week. The work depicted the facade of an old, two-story building being unzipped like a pair of jeans – meant to signify the IQOS “notion of opening the future,” the sculptor said in an interview with FAD magazine. A representative of Chinneck confirmed the partnership.

The company also worked with distinguished industrial designer Karim Rashid to create an installation at the previous year’s Milan Design Week. In an interview with website, Rashid described his installation, showing two faces meeting one another, as similar to the IQOS, which he called “an intimate device that speaks to forward-thinking and original expression.” A representative of Rashid said he was unavailable for an interview on Thursday.

The company has also sought to distinguish IQOS from smoking through partnerships with restaurants, bars and salons who designate themselves as “IQOS friendly” spaces, where cigarettes are banned but the IQOS device is allowed. The Stanford researchers found evidence of hundreds of “IQOS friendly” establishments in places such as the Czech Republic, Ukraine, Romania and Japan.

Philip Morris did not respond to questions about its business relationships with the establishments that promote the device and display its branding.

The Stanford researchers and other experts say such policies undermine public smoking laws and encourage dual use of cigarettes and alternative devices. Many users will continue smoking outdoors, but turn to e-cigarettes or IQOS where they are permitted indoors. Such switching can “deepen nicotine addiction and make cessation less probable,” the Stanford report said.

The brand also had a presence at a Tel Aviv University student music festival last year – where the minimum age for entrance was 16, and where a video showed young IQOS staff at a pop-up booth.

At a launch party for IQOS in Albania last year, a performer in an elaborate white sequined dress did an interpretive dance on stage with an IQOS, while another performer attached to wires performed acrobatic moves in the air while playing a violin.

“They’re trying very hard to resurrect the glory era of smoking, where it was glamorous and sophisticated and stylish,” Jackler said. “It’s about associating it with all the good things in life.”

Spinning a New Tobacco Industry

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Philip Morris suspends social media campaign after Reuters exposes young ‘influencers’

(Reuters) – Cigarette maker Philip Morris International Inc has suspended a global social media marketing campaign in response to Reuters inquiries into the company’s use of young online personalities to sell its new “heated tobacco” device, including a 21-year-old woman in Russia.

The company’s internal “marketing standards” prohibit it from promoting tobacco products with youth-oriented celebrities or “models who are or appear to be under the age of 25.”

The company told Reuters of the decision late Friday, saying it had launched an internal investigation into marketing posts and photographs that Reuters sent to the company for comment earlier this week.

They included a paid post plugging the tobacco product by social media “influencer” Alina Tapilina in Moscow – who listed her age as 21 on Instagram – alongside often seductive photos of herself drinking wine, swimming and posing with little clothing in luxurious settings.

“We have taken the decision to suspend all of our product-related digital influencer actions globally,” the company told Reuters. “Whilst the influencer in question is a legal age adult smoker, she is under 25 and our guidance called for influencers to be 25+ years of age. This was a clear breach of that guidance.”

“No laws were broken,” the company told Reuters. “However, we set high standards for ourselves and these facts do not excuse our failure to meet those standards in this instance.”

The company added: “We were deeply disappointed to discover this breach and are grateful that it was brought to our attention.”

The U.S. Food and Drug Administration (FDA) last month decided it would allow sales of the IQOS device in the United States after a two-year review process in which Philip Morris repeatedly assured the regulator that it would warn young people away from the product.

The FDA declined to comment Friday evening on Philip Morris’s decision to suspend the marketing campaign. The agency earlier said it would “keep a close watch on … how the company is marketing its products.”

While most of the social media influencers hired by Philip Morris overseas did not list their ages on Instagram, a Reuters review of the firm’s social media marketing of IQOS in Japan, Italy, Switzerland, Russia and Romania shows that Tapilina’s online persona was typical of what the company called its social media “ambassadors” for the device – rail-thin young women who revel in the high life.

The company did not directly respond to additional questions Friday night regarding the intended audience for its digital influencer campaigns.

Many of the messages contained the hashtag “#IQOSambassador,” tying them into a network of social media influencers that the international tobacco giant has relied on to brand the IQOS as a safer alternative to cigarettes and a sexy fashion accessory.

“I finally have the new IQOS 3, and I can confidently say yes to change … the level of harmful substances is on average about 90 percent lower than in smoke,” Tapilina wrote in an April post. “You haven’t yet switched to IQOS?”

One Romanian IQOS marketer is 25 years old, according to a separate actress biography, but did not list her age on Instagram. Tapilina and nine other IQOS marketers did not respond to requests for comment.

Philip Morris, in its statement to Reuters, said its suspension of the social marketing campaign is “concrete proof” of its “conviction to achieve a smoke-free world through socially responsible practices.”

Matthew Myers, president of The Campaign for Tobacco-Free Kids, had a different take upon hearing of the suspension Friday night. The advocacy group collected some of the IQOS marketing images reviewed by Reuters.

Philip Morris, he said, “is changing their behavior only when caught red-handed.”

The company, Myers said, has historically been “the single most successful across the globe in making cigarettes fashionable to young people.”

Over the past year, Philip Morris has increasingly publicized its “mission” to prevent young people from using tobacco products. Last month, it issued a release calling on “all tobacco and e-cigarette companies to do their part to guard against youth nicotine use.”

“Let me be clear: We at Philip Morris International do not, and will not, market or sell our products to youth,” CEO André Calantzopoulos said during a speech in Boston earlier this month. “For Philip Morris International, age matters.”

When Philip Morris submitted marketing plans with an FDA application for IQOS in 2017, its sample advertisements featured models appearing at least a decade older and wearing modest, professional clothes.

That application, which is still pending before the FDA, seeks approval to market the IQOS as less harmful than smoking and outlines company plans to ensure it doesn’t market the device to “non-intended audiences.” The device heats up but does not burn packages of ground-up tobacco, which resemble small cigarettes, to create a nicotine-filled aerosol.

In Japan, the intended audience for IQOS marketing includes the Instagram followers of Ayame Tachibana, a 27-year-old DJ and model. In one post, she shows off a Valentine’s Day message for the IQOS device, lovingly scrawled with multicolored pens.

“Happy Valentine IQOS. Love you sooo much!” reads the Instagram post from February.

Alina Eremia, a Romanian actress and singer, holds a gold-colored IQOS in front of a Christmas tree.

“My list of resolutions contains 95% fewer moments without a smile,” says Eremia, who is 25 according to her actress biography on multiple movie and celebrity information websites.

Philip Morris says the IQOS – an acronym for “I quit ordinary smoking” – contains up to 95 percent fewer toxic compounds than cigarettes.

Vlad Parvulescu, a manager for Eremia, confirmed she had been hired to promote IQOS and said she had been contacted by a Romanian public relations agency. He did not respond to additional questions about the financial arrangement.

Marketing deals between companies and social media influencers vary widely, according to industry experts. But typically a company will work through third-party public relations or advertising firms that have relationships with online personalities. Compensation typically ranges from $20 to $25,000 or more for each post.

Corporations have become increasingly sophisticated in how they approach their social media campaigns in the past two years, said Joe Gagliese, co-founder of Viral Nation, a marketing and talent agency that works with influencers.

He once had to explain the basic concept of an “influencer” in pitch meetings. Now, companies approach him with “tailor-made decision briefs saying, ‘this is exactly what we want.’”

Reuters reviewed dozens of social media posts featuring the IQOS device. Many included hashtags such as #IQOSAmbassador, #paidad, and #notriskfree, indicating that they are IQOS marketing posts.

Many of the Instagram influencers featuring the products had tens of thousands of followers, and a few had more than a million.

Devices such as IQOS and Juul hold potential as a way for cigarette smokers to transition to less harmful nicotine products, but some public health advocates worry the sleek new devices are addicting young people who would have never smoked cigarettes. Among traditional cigarette smokers, 90 percent start smoking before the age of 18, according to federal data.

Philip Morris said there have been “no reports” of “worrisome levels” of unintended use of IQOS.

As part of the FDA review process, Philip Morris pledged to market only to adult cigarette smokers once it begins selling IQOS this summer through a partnership with Altria Group Inc, which sells Marlboro cigarettes in the U.S. IQOS delivers about the same level of nicotine as a traditional cigarette.

Altria did not respond to requests for comment.

Social media marketing has become a flashpoint in the debate over regulation of tobacco products, particularly the newest generation of products such as the wildly popular Juul e-cigarettes.

Some of Juul’s early social media and YouTube marketing included images of attractive young people, particularly at a 2015 product launch party. Twitter images from that time on Juul’s official account featured sensual images of a young woman breathing out Juul vapor in a group, next to the slogan, “Share a #Juulmoment.”

Those early campaigns sparked an explosion of video and photo posts from young people showing themselves using the product at school or with friends, often under the hashtags #doit4juul or #juullife. Juul Labs Inc has since said it stopped using social media influencers and requires anyone in its ads to be a former cigarette smoker older than 35.

Juul Labs Inc said in a statement it recognizes that “some of our earliest marketing initiatives did not fully reflect the goal of our company,” which it describes as helping cigarette smokers transition to its products.

“As a young company, we learned from our experiences and instituted changes to help ensure that we are only reaching current adult smokers,” the company said.

U.S. laws governing tobacco advertising – which is banned on radio and television – were drawn up long before social media and digital advertising became a dominant force in consumer marketing.

Although no current state or federal law restricts tobacco advertising on the Internet – including for e-cigarettes and devices such as IQOS – the FDA can use its authority over new devices to assert sweeping control over a company’s marketing.

As a condition for allowing the device to be sold, the FDA is requiring Philip Morris to provide detailed analyses of the age ranges of consumers it reaches through digital advertising. Philip Morris is also required to submit any new advertising campaigns, including digital and social media efforts, to the FDA at least 30 days before it plans to launch them.

Any paid influencers promoting the product also must disclose “any relationships between you and entities that create labeling for, advertise, market, and/or promote the products, on your behalf, or at your direction.”

Those rules aim to restrict youth access to tobacco marketing, the FDA said in a statement, “especially in shared digital properties such as social media sites.”

Does Netflix glamorize tobacco?

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Netflix in hot water for ‘glamourising’ tobacco use

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Global evidence on the effect of point-of-sale display bans on smoking prevalence

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How Philip Morris is selling regulators on its hot new smoking device

Part 4: Philip Morris executives are traversing the globe to lobby health authorities on the benefits of iQOS, the little machine the tobacco giant says is key to the company’s future. The novel argument: While iQOS uses tobacco, it shouldn’t be categorized as a cigarette because it doesn’t burn the leaf.

TOKYO/TEL AVIV/BOGOTA – In Tokyo’s upscale Ginza shopping district, around the corner from the sparkling storefronts of Tiffany & Co and Cartier, shoppers searching for a new device called iQOS can buy it in a boutique behind a glass façade. The store combines a high-tech aesthetic with the feel of an exclusive club: The young woman at the door says a members-only smoking lounge is upstairs.

The device is advertised under the slogan, “This changes everything,” with a hummingbird in fluorescent green and blue floating in midair. From the small “i” of its name when it was rolled out to the minimalist white box it comes in, the iQOS evokes the marketing-and-design savvy of the American technology giant Apple Inc.

But this little machine is sold by the tobacco giant Philip Morris International Inc. And it isn’t a smartphone.

The iQOS is essentially an electronic cigarette that heats – without burning – plugs of tobacco, releasing tendrils of nicotine-laced aerosol. And the world’s largest publicly traded tobacco company by market value, which has spent more than $3 billion in developing new smoking devices, says iQOS is nothing less than its future.

Philip Morris International says the lack of combustion means iQOS produces far lower levels of carcinogens than regular cigarettes. It’s early days, but iQOS is already bringing in piles of cash. The device drove up sales of the company’s new-generation smoking products to nearly $1 billion in the last quarter, from some $200 million just a year ago.

Wowing consumers with the prospect of a less harmful smoke built on flashy technology is essential to iQOS’ rapid success. Consumers,though, aren’t the only target. Interviews with government officials and trade groups reveal how the company is seeking to sell national authorities on the benefits of the device, before regulators can toss up hurdles.

A key objective: convince governments of iQOS’ benefits so they don’t slap the same taxes and restrictions on the device as they do on cigarettes.

Philip Morris is employing a novel argument: The tobacco plugs inserted into the iQOS device shouldn’t be classified as cigarettes because they do not burn or produce smoke. And the device itself, the company says, is an electronic product and so should not be regulated like tobacco.

In Japan, Philip Morris blitzed officials with the science of iQOS to persuade them to classify the device in a way that would lead to a lower tax rate than cigarettes. In Israel, the company flew in an executive to convince a senior health official of the upside of the device. And in Colombia, the health ministry says Philip Morris launched iQOS without seeking the agency’s approval.

The approach is outlined in internal company documents seen by Reuters.

Evidence that iQOS “is ‘not smoked’ is the most critical element,” says a 2014 PowerPoint briefing on iQOS and other new smoking devices.

Reuters has published that document and others in a searchable repository, The Philip Morris Files.

Other traditional cigarette companies, notably British American Tobacco Plc and Japan Tobacco Inc, have launched similar devices. None have reported anything close to the global sales of iQOS.

The iQOS is championed by Andre Calantzopoulos, Philip Morris International’s chief executive, who in media interviews makes the point that he smokes the device. In September last year, Calantzopoulos told investors it was the company’s “aim to become the undisputed leader” of a new tobacco category it dubs “reduced-risk products.” The goal he said, is to have “RRPs” ultimately replace regular cigarettes.

TWITTER ADVICE: A page from a Philip Morris social media training handbook provides guidance on how to engage online users.

Philip Morris now has an application pending at the U.S. Food and Drug Administration for permission to market the device in America as being less harmful than cigarettes.

A Reuters investigation published Wednesday identified shortcomings in the training and professionalism of some of the lead investigators in the clinical trials that underpin the tobacco giant’s application to the FDA. Former Philip Morris employees and contractors described irregularities in those experiments.

The company chose Japan as its first iQOS market, launching in late 2014. If the company could achieve its goals in “priority” markets like Japan, it would provide “good reference points to other countries,” said the 2014 Philip Morris presentation on reduced-risk products like iQOS.

It unveiled the device in an unlikely venue – Nagoya, a city of more than 2 million people on a bay of the Pacific Ocean. Nagoya is close to Toyota Motor Corp’s headquarters, a town of skyscrapers and automotive plants; a place with neither the buzz of Tokyo nor the charm of Kyoto.

At first, business lagged. An internal company review of Asia, dated June 2015, put iQOS sales figures toward the end of the Japan market rundown. It showed iQOS sales dropping about 40 percent from that January to May.

Philip Morris pushed ahead with a national expansion in September 2015. In an in-house newsletter for the Japan operations the next month, Ashok Rammohan, director of reduced-risk products, told employees that “building iQOS will take time and focus as we need to educate LAS” – legal-age smokers.

By early 2016, the buzz surrounding iQOS in Japan was growing, thanks in part to a group of Japanese entertainers. That April, six popular Japanese comedians were on a national TV show when the presenters began to talk about smoking. One of the comedians, Terumoto Goto, a household name, held up a red iQOS.

“It doesn’t release smoke,” he explained. “It’s like steam coming out of my mouth.” The five men sitting around him on the TV set, decorated with bright rainbow stripes, held up iQOS units as well.

Goto said he bought an iQOS because his wife wouldn’t let him smoke cigarettes inside their house and the neighbors didn’t like him standing around and smoking outside.

Toshiyuki Itakura, just behind Goto, chimed in about smoking the device in public: “There doesn’t seem to be any harm.”

Searches on Google for the Japanese word for iQOS spiked that day.

The talent agency that represents Goto and Itakura, Yoshimoto Kogyo Co Ltd, said in a statement: “Our company received absolutely no payment from Philip Morris or affiliated companies” for the appearance. The network that carried the show, TV Asahi Corp, said it did not consult with the tobacco company beforehand.

That promotional bump came during a period when Philip Morris was working to use social media to propel iQOS into the national consciousness.

“That IQOS moment.” “My IQOS way of living.” Those are two of the catchphrases the company’s social media team considered using as catalysts to promote online chatter about the device. The guidance appears in a 2017 online-content strategy paper, marked “confidential,” that cites examples from Japan.

A separate document, a 54-page training handbook for social media teams in 2016, warns that the company’s postings walk a fine line. “Since the law is set up to prevent tobacco companies from promoting their products on social media, and iQOS is a product that uses tobacco, you’ll always be walking through a minefield of sorts,” the document says.

Away from the public eye, Philip Morris employees equipped with pages of scientific findings were lobbying government officials in Japan. They set out to convince regulators to tax iQOS at a lower rate than cigarettes and exempt it from ordinances that ban smoking in public places and restaurants.

Koki Okamoto, a member of the Tokyo Metropolitan Assembly, said the city’s planned public smoking regulations almost certainly will exempt iQOS. “My personal view, as a lawyer, is that there will be reluctance to apply penalties to something without scientific evidence on health hazards,” said Okamoto, a lead for tobacco control issues in the party that won the capital’s elections this July.

To date, Philip Morris is responsible for the majority of the science that has been published about iQOS.

Philip Morris executives say the product is meant only for people who would not otherwise quit smoking. That is inconsistent with where the company has chosen to introduce iQOS.

Industry sales numbers show Philip Morris is selling iQOS almost entirely in countries where cigarette sales are already in decline – in other words, where people are quitting. While the global average for cigarette sales was down 1.9 percent from 2005 to 2016, in 30 countries where iQOS is now sold the drop in sales was about 30 percent, according to a Reuters analysis of industry numbers from Euromonitor International.

Philip Morris said in response that there are more than 180 million smokers in the countries where iQOS has been launched. “Those 180 million people deserve an opportunity to switch to a potentially less harmful product than cigarettes,” the company said.

As the company honed its strategy in Japan – impressing officials with its scientific findings while advocating for lower taxes – it set out to conquer new markets.

More than half a year before iQOS launched in Israel, Moira Gilchrist, a corporate affairs vice president for reduced-risk products, flew into the Holy Land and took a March 2016 meeting with a senior health ministry official to talk about the company’s science.

A few weeks after that meeting, the official, Itamar Grotto, sent a letter to the country’s tax authority saying iQOS was in a new product category exempt from marketing and advertising restrictions on tobacco products. In a later court filing, Philip Morris cited the letter in explaining its decision to launch iQOS in Israel.

Asked why he said iQOS was exempt from tobacco regulations, Grotto told Reuters that the ministry was being cautious after losing a case against e-cigarette companies a few years earlier. Grotto also said he thought at the time that the question of regulating iQOS was “theoretical.” He had understood from Philip Morris that it did not plan to market the device in Israel until it had approval from a European or American regulatory authority, Grotto said.

Told of Grotto’s remarks, Philip Morris said in a statement, “We did not state that PMI would wait for the approval of a foreign regulatory authority.”

In Israel, iQOS has faced obstacles. This March, a group headed by an activist named Shabi Gatenio challenged the health ministry and Philip Morris in the country’s top court over the sale of iQOS without the same marketing restrictions imposed on regular cigarettes. An Israeli tobacco company also challenged the government and Philip Morris in a similar filing.

During an interview in Tel Aviv, Gatenio, 45, marveled at the reach and access of Philip Morris. He said within two and half hours of his filing the court petition, before it had become public, he got a text message from Erez Gil-Har, co-chief executive of Policy Ltd, Philip Morris’ powerful lobbying company in Israel. The message, viewed by Reuters, accused Gatenio of becoming a “tool” in the hands of the local tobacco company – a charge he dismisses.

Gil-Har, who attended the meeting with Grotto and Philip Morris’ Gilchrist, declined to comment. The tobacco company, Dubek Ltd, declined to talk as well.

Before the court could give a final ruling, the health ministry reversed its position and said it would treat iQOS as it does traditional cigarettes. The ministry said it planned to revisit its decision after seeing how the U.S. FDA regulates the product.

The about-turn left Philip Morris scrambling. According to a government official familiar with the matter, Philip Morris hired more than two dozen women for an urgent task: They manually peeled off the old labels from thousands of tobacco-insert packs in a warehouse near Tel Aviv and stuck on new ones with more prominent health warnings. The packs were then released.

Half a world away in Colombia, Philip Morris kicked off its sale of iQOS this March with a large white balloon at a music festival. Emblazoned with “iQOS” in blue and green letters, the balloon was hoisted 20 feet in the air by a crane.

Tobacco advertising and promotion are banned in Colombia, the first country in Latin America to get iQOS. According to a health ministry official, Philip Morris launched iQOS without getting approval from the agency to sell the tobacco inserts in the country as is required by law.

“This is a product which is derived from tobacco and which must have a prior evaluation by this ministry,” said senior health ministry official Jose Fernando Valderrama.

Philip Morris said it is in compliance with Colombian law. The company said it is required to submit the tobacco inserts for health ministry approval following the release of the agency’s tobacco warnings in November each year. Its Colombian affiliate will do so “in the next month,” the company said in a Dec. 7 statement to Reuters.

On a stroll through the capital Bogota a few months ago, iQOS could be seen being sold at the front of a restaurant with bright displays of packs of the tobacco inserts and the hummingbird emblem facing the sidewalk. In a trendy quarter of the city, a large white billboard advertised a coming “iQOS Boutique,” next to a Starbucks and an Apple retailer.

A former Philip Morris employee in Bogota said the company’s position is that because the device itself does not include tobacco, unlike the inserts, marketing restrictions don’t apply to it.

The company confirmed that position, saying iQOS is an electronic device, and “as such, the current tobacco law does not regulate its commercialization as a tobacco product.”

Back in Japan, sales of the device have taken off. Philip Morris says the iQOS tobacco inserts made up 11.9 percent of the Japanese tobacco market in the third quarter, up from 3.5 percent a year ago.

That growth took on additional significance for company revenue in light of the lower tax rates. The iQOS kit retails for about 11,000 Japanese yen, roughly $100. The company said that cigarettes in Japan are taxed at 60 percent, while the iQOS tobacco inserts – priced about the same as a pack of Marlboros – are at 51 percent.

Philip Morris shows no signs of slowing down. Paul Riley, president of the company’s operations in Japan, this January called on Emiko Takagai, who as a former vice health minister is an influential voice on national health policy. They met in Takagai’s seventh-floor office in Tokyo, one decorated with stuffed animals and posters of healthy food groups.

During that conversation, Riley laid out the company’s pitch on iQOS, said Takagai. In documents later sent to her office, Philip Morris said the product reduces the levels of harmful substances by at least 90 percent compared to regular cigarettes.

When Reuters in August interviewed Takagai, a member of the upper house of parliament for the nation’s ruling party, it seemed the tobacco giant’s message was hitting home.

If the company’s scientific claims bear out, she said, “we must make efforts to thoroughly tell people.”