Supply Watch

March 12, 2017

As a consumer, you rightly expect the product you are consuming to be bona fide and brought to you by honest means. After all, you don’t want to play the part of stooge to criminal activity.

We can all take steps to contribute to the fight against illicit trade. Ensuring we buy products from reputable and trusted retailers helps. However, spare a thought for the work aimed at reducing and eliminating the societal harm caused by illicit cigarettes in the first place.

At Philip Morris International, we invest considerable time, effort and resources to maintain the integrity of our supply chain. 

Despite significant progress and success achieved through our work, and through collaboration with others, illicit trade in tobacco products remains a serious problem. Simply put, individuals and organized crime groups continue to have powerful incentives, will and capabilities to buy cheap genuine cigarettes in low price countries and smuggle them into countries where cigarettes are sold at higher prices.

To this end, we have in place internal policies to secure our supply chain and protect our brands. We work in partnership with law enforcement agencies in countries worldwide, investing in education and training of public officers in charge of monitoring this issue.

In all markets where PMI operates, we monitor volumes and orders to our direct customers. In hot spot areas where illicit trade is particularly flourishing, we extend our monitoring more deeply into the supply chain by examining not only the monthly volumes to our third party manufacturer, but also volumes sold to our indirect customers.

We employ and continuously refine a set of practices and tools to control our supply chains and prevent the smuggling of our products. Forming the acronym ENFORCE, these demonstrate our commitment to halting this problem:

  • Enhancing volume monitoring
  • Notifying suspected compliance violations
  • Following up seizures
  • Order controls improvement
  • Raising awareness to prevent the diversion of our products
  • Control through tracking and tracing architecture
  • Employee training

These activities along with our ‘3 knows’ policies (Know Your Customer, Know Your Payment and Know Your Vendor) form the cornerstone of our anti-diversion efforts to fight crime.

Illicit trade in tobacco is not good for us, our shareholders, our legitimate customers, national tax authorities, and society at large. It is a crime, it is wrong, and we are working towards a future where illicit trade of tobacco is eliminated.

Check out our short brochure for more on our ENFORCE and 3 Knows strategy:

Alvise Giustiniani

Written by Alvise Giustiniani

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