Daily Management Review

Altria suspends IQOS distribution in the US


Altria Group is forced to postpone its conquest of the US market. The company announced that it is suspending further distribution of its IQOS tobacco heating system due to a patent dispute with British American Tobacco and a possible ban on imports of IQOS into the country.

Altria began selling IQOS in the US in 2019 in partnership with Philip Morris International (PMI). The company now sells its tobacco heating systems in four states - Virginia, Georgia, and North and South Carolina. Earlier this year, however, it was revealed that the US International Trade Commission (ITC) started a dispute between Reynolds American (a subsidiary of British American Tobacco, BAT) and Philip Morris International.

Reynolds sued PMI in federal court in Alexandria, Virginia, and the US International Trade Commission in April 2020. Reynolds alleges that PMI took advantage of tobacco heating technology previously patented by Reynolds in the development of the Vuse Vibe and Vuse Solo vaping devices. IQOS is the only device that does not burn tobacco, but heats it to the desired state, and has been licensed for sale by the US Federal Food and Drug Administration (FDA).

In May this year, an ITC judge ruled that PMI and Altria had infringed two of Reynolds' patents, meaning IQOS could be banned for sale in the US. Final decisions by the commission and the court are expected in September, and the ban itself could then go into effect as early as November this year. Given the situation, Altria has decided to suspend the expansion of the IQOS sales programme in the country.

source: bloomberg.com