Marlboro maker sells UK inhaler firm amid criticism

Philip Morris International (PMI), the tobacco giant behind Marlboro cigarettes, has sold the UK-based inhaler company Vectura Group for $198 million, just three years after acquiring it for over £1 billion.

The sale follows intense backlash from health groups and critics who labeled PMI’s ownership of a firm producing inhalers for respiratory conditions like asthma as hypocritical.

When PMI initially purchased Vectura in 2021, the decision was part of the company's broader strategy to move away from traditional cigarette sales and towards what it termed "smoke-free" businesses, including vaping.

PMI has set a goal of having two-thirds of its revenue come from non-cigarette sales by 2030. Despite this commitment, the company has faced skepticism, with many questioning the sincerity of its shift given the billions of dollars it continues to generate from tobacco products.

PMI defended the acquisition as a legitimate part of its transition plan, but the backlash persisted.

On Wednesday, the company announced the sale of Vectura to Molex Asia Holdings, an electronics firm, for a reduced price. Molex will pay an up-front fee of £150 million, with the possibility of additional payments up to £148 million if certain conditions are met.

PMI's CEO, Jacek Olczak, stated that the sale would free Vectura from the "unreasonable burden" of external criticism stemming from the tobacco giant’s ownership.

Olczak also reaffirmed PMI’s continued commitment to innovation in the health sector, indicating that the company has not fully abandoned its interest in inhaler-related ventures.

Despite PMI's stated ambition to reduce cigarette sales, its latest financial results highlight the ongoing dominance of tobacco in its revenue stream.

In the three months leading up to the end of June, more than 60% of the company’s $9.47 billion (£7.19 billion) in revenue came from cigarette sales. During that period, PMI held 23.6% of the global cigarette market by revenue.

The sale of Vectura comes at a time when the new UK Labour government is considering implementing stricter smoking regulations, including a potential ban on outdoor smoking in pub areas.

While health experts have largely supported the proposed measures, many pub owners have voiced concerns about the potential negative impact on their businesses.

PMI’s exit from Vectura may appease some critics, but it remains to be seen how the company will navigate its ongoing push towards smoke-free products while continuing to rely heavily on traditional tobacco sales for a significant portion of its revenue.