From historical judgment to current claim: why Philip Morris called Uruguay’s regulation of smokeless products “hostile”

The tobacco company Philip Morris International (PMI) for decades promoted the cigarette consumption without taking into account all the negative consequences on people’s health. For some time now, the multinational has had a different tone and organizes events where they present alternatives with “risk reduction” for the health (although these do not cease to exist). Thus, at the beginning of the event Technovation which took place on October 7 and 8 in Buenos Aires – and in which El País participated after the invitation of the tobacco company -, PMI stated: “We have committed to stop selling cigarettes forever.” Your bet is now to smoke free productswhich are on sale in 109 markets around the world, but not in Uruguay. PMI executives now hope the country will be “rational” and enable them. A claim to the government after, paradoxically, they lost a historic international lawsuit for Uruguay’s measures to discourage cigarette consumption among the population.

Throughout the panels, in which different topics regarding tobacco consumption were addressed, some messages and premises were present in various presentations, such as innovation and harm reduction.

“The first message is ‘do not consume‘”, was one of the most repeated slogans. While, if you choose not to give up cigarettes, the tobacco company now proposes switching to smoke free alternativessince they explained that combustion is where the greatest damage to health. It should be noted that these alternatives are not exempt from generating damage.

According to the figures presented at the event, More than 1 billion people are tobacco users in the worldwhile In Latin America, adult smokers are around 60 million.

Likewise, at the event it was presented that the company’s aspiration is that by 2030, income will reach two thirds per smokeless productswhile currently the weight of these products is 42%. PMI estimates that more than 43 million adults worldwide use its smoke-free products.
While the government of Argentina months ago it lifted the ban and regulated the marketing of heated tobaccolos vapers and the bags (pouches) of nicotine, Uruguay reversed the authorization of these products in 2025, which had been allowed in the government of Luis Lacalle For.

However, despite having been authorized for marketing for some time, PMI did not promote these products in the Uruguayan market. In an interview with El País, Matías O’Farrel, Vice President of Corporate Affairs for Latin America and the Caribbean at PMInoted that although the product was “released”, the “other conditions were not met.”

“The tax issue, for example, was the same. So, I say, I deal with the tax issue, I bet on the future, then I sit down with the government, I try to talk about it, negotiate it, so I explain to them that it is another product, let’s lower it. Perfect, let’s keep moving forward and then you found other regulations. Neutral packaging. The only variant per brand, without color, without anything, without being able to advertise, without being able to explain to the consumer what this product is. And already in a moment that the barriers are so high that I say, there is no way for me to launch a product like this, first it is very difficult to do it, that is, to create the packaging, the product itself and, second, how do I make the consumer understand that this is better than cigarettes? It is impossible,” said O’Farrel.

“The definitive ban was lifted, but the product was not regulated correctly, it was included within the general regulation of tobacco, as if it were a cigarette,” he added.

He stated that they felt this regulatory context as a “very hostile” environmentbecause “no one was going to buy a product that does not understand what it is, that does not know what it is, that has no differentiation with tobacco of any kind, that has no color. In other words, there is no way for me to sell that, it is very difficult.”

According to the manager, what they expect from Uruguay PMI is that “it doesn’t even stop being hostile” but rather “a more friendly regulation for these types of products”, that “is more rational.”

“It’s not just that, but you probably already have consumers of these products in Uruguay and there will be more and more. Whether you like it or you don’t like it, because the product is there, they are testing it, so the best thing you can do is regulate correctly,” he added.

Likewise, he pointed out that when regulating, we know the composition of what is sold, as well as what flavors to use so that it is not attractive to minors. According to him, if the results of the authorization of these products were negative, countries of the European Union, United States, Japanamong others, would have pointed out that they have a problem.

For this reason, he said that the ban on these products in Uruguay took them by surprise. “What’s more, exactly the opposite was being done to generate a more hospitable environment, to begin to move certain regulations so that these products are successful,” he noted.

Meanwhile, he highlighted that both the left and the right have governed the country “and the institutions are maintained.” “I think the only thing that has caught my attention a little is the policies regarding tobacco,” he said.

Likewise, he said that he “hopes that in Uruguay rationality prevails and alternatives to cigarettes begin to be discussed again and that we move forward with a common agenda.”

Along these lines, given the possible initiation of consumption through these alternatives, he stated that “it is practically zero” since there is a “barrier is the price, why? The device is worth US$ 100.”

In February 2010, Philip Morris sued the Uruguayan State before him International Center for Settlement of Investment Disputes (ICSID) of the World Bank, alleging that the measures to discourage cigarette consumption promoted during the presidency of Tabare Vazquezviolated the Bilateral Investment Treaty between Switzerland and Uruguay.

The arbitration court overwhelmingly agreed with Uruguay and dismissed all of the tobacco company’s claims.

After this international complaintO’Farrel pointed out that the relationship between the company and the Uruguayan State is “more limited.” However, he said that “we will always try to advance our agenda and try to reach a consensus on this matter” and added that the company is “willing to talk” and “see how we can solve any inconvenience,” where they will be “open and transparent.”

The ICSID ruling had highlighted the brief presented by the World Health Organization (WHO), which maintained that the Uruguayan government’s measures were adopted “in light of a substantial body of evidence that health warnings with large images constitute an effective means of informing consumers of the risks linked to tobacco consumption and discouraging its consumption.”

“There is also a substantial body of evidence that banning brand variants is an effective means of preventing misleading branding of tobacco products,” the WHO said. The court highlighted the relevance of this
opinion.

According to figures managed by PMI regarding the illicit cigarette trade In Latin America and Canada, 77 billion illicit cigarettes were sold in 2025, while they estimate that the tax revenue losses resulting from illegal sales reach US$8.5 billion.

On the other hand, in the region it is estimated that one in three cigarettes what is consumed is illicitaverage similar to that of Uruguay.

In the panel dedicated to the illegal trade of these products, the regional director of Crime Stoppers for the Caribbean, Bermuda and Latin America, Alejo Campossaid that the concept of “transnational organized crime” was left in the past, but now we should talk about “criminal convergence“.

Credit: PMI.

“Criminal convergence basically means, if before there were the drug traffickers over here, the human traffickers here, those who they washed (assets), the smugglers on this other side and other divisions, because now they all decided to work together (as if it were a criminal business holding company)”, said Campos.

“They understood that they go to the same markets, that they use the same international logistics and supply chains, that is, the same route and that they also have to interact with the same actors in the corruption“he explained.

Meanwhile, regarding what state policy There must be a government to avoid not only the fiscal focus, but also avoid illicit trade, the former undersecretary of the Interior of Chile, Juan Francisco Gallimaintained that the first thing is to understand them as “illicit companies” and that “they should not be treated as if they were crimes of occasion, they are real businesses that are structured behind commercial opportunities and these commercial opportunities are often linked to excessive regulation or with a price difference that allows a very open market.”

Credit: PMI.

Along these lines, after analyzing cases in the panel, such as that of Mexico and Chile, Campos maintained that “the first step we have to take is that there really is a political will” because “the private sector cannot do it. It would be outside the framework of the law if it starts doing this type of things. The political will to say, ‘let’s go there’. We understand that cigarettes and other contraband products must be on the same level as drug trafficking, human trafficking, and cybercrime.”

“It is another product and it has to be at the same level, we do not have to lower it. That will automatically be the same as when one recognizes certain structures as terrorists, certain mechanisms will be activated in this case to persecute this specific product,” he stated.