Philip Morris goes “beyond nicotine”

US tobacco giant Philip Morris International has agreed to pay £1bn for British inhaler specialist Vectura.

US tobacco giant Philip Morris International “wants you to think it’s a healthcare company now”, says Rich Duprey on The Motley Fool. In February, the Marlboro cigarette owner launched its “beyond nicotine” initiative, which plans to “generate over half of its total net revenue from smoke-free products by 2025”. 

Now it has agreed to pay £1bn for British inhaler specialist Vectura. The group’s devices have been used to help bring “13 inhaled medicines to market”. Philip Morris says it is evolving into “a broader healthcare and wellness company”, but critics spy “a wolf in sheep’s clothing”.  

No wonder, says Helen Thomas in the Financial Times. Transitioning into cigarette alternatives is one thing, but Vectura makes most of its money from treating smoking-related diseases. It is as if BP announced a move “into flood prevention and forest-fire management”. What’s more, Vectura’s links to the tobacco industry could hamper its ability “to attract talent... and develop products”.  

The takeover could also limit how much the NHS is allowed to deal with Vectura, adds Alistair Osborne in The Times. Britain’s membership of the World Health Organisation’s Convention on Tobacco Control commits it to reducing the industry’s influence in public health policymaking. 

The “conflicts of interest” opened up by a firm that “kills people for profit” getting into the healthcare game are “myriad”. “Calls for the government to stub out takeovers are too frequent lately. But this one really does belong in the ashtray.” 

Recommended

Julian Brigden: markets are at a huge inflexion point
Investment strategy

Julian Brigden: markets are at a huge inflexion point

Merryn talks to Julian Brigden of Macro Intelligence 2 Partners about the unwinding of the US stockmarket's super-bubble, and the risks and opportunit…
25 Jan 2022
Has growth investing had its day? Don’t be so sure
Growth investing

Has growth investing had its day? Don’t be so sure

Markets – and “jam tomorrow” growth stocks in particular – continue to crash, with some analysts forecasting a 50% drop or more. But, says Max King, a…
25 Jan 2022
A cheap investment trust with a good record
Investment trusts

A cheap investment trust with a good record

This cheap investment trust’s yield of almost 9% may look too good to be true, but should be sustainable, says Max King.
25 Jan 2022
Tax return deadline extended – but don't forget to file
Income tax

Tax return deadline extended – but don't forget to file

HMRC is being slightly more lenient about tax returns this year, but falling behind will still incur hefty fines.
25 Jan 2022

Most Popular

Shareholder capitalism: why we must return power to listed companies’ ultimate owners
Investment strategy

Shareholder capitalism: why we must return power to listed companies’ ultimate owners

Under our system of shareholder capitalism it's not fund managers, it‘s the individual investors – the company's ultimate owners – who should be telli…
24 Jan 2022
Three innovative Asian stocks to buy now
Share tips

Three innovative Asian stocks to buy now

Professional investor Fay Ren of the Cerno Pacific Fund highlights three of her favourite Asian stocks to buy now
24 Jan 2022
Ask for a pay rise – everyone else is
Inflation

Ask for a pay rise – everyone else is

As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why yo…
17 Jan 2022