“A surprise move by the Italian government is protecting heated tobacco’s privileged tax status. At issue is a proposal that would have hiked taxes on heated tobacco — over which Philip Morris International (PMI) has a near monopoly — so that it would be close to par with conventional cigarettes. In Italy, taxes on heated tobacco are only a quarter of the standard rate on conventional cigarettes. But the government declined last week to give its backing, prompting lawmakers to withdraw the amendment. With a 98 percent market share, IQOS enjoys de facto monopoly status and has seen sales doubling year-on-year. This year, it’s expected to account for 9 percent of all tobacco product sales.”
BILL TARLING — PMI has admitted [during a Canadian hearing] that they are pricing their HNB refills to be about the same price as a pack of cigarettes (under the pretext that it was so smokers would feel like they’re getting an equal quality product and not an inferior much lower cost replacement). In fact, that’s a ploy to pocket the HNB portion that would have been the tobacco tax amount — in Italy for example, since HNB only pays about 1/4 the tax rate compared to cigarettes, but since they charge about the same amount as a pack of cigarettes for their refills; they get to pocket approximately 75% of the monies that would have been due as tobacco tax. So in reality, they’re having the consumer pay them an extra 75% of the tobacco tax rate that the consumer should not have had to pay.
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Italian tax spat reveals Big Tobacco’s clout
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