Jacek Olczak: It is important to constantly try to be better than yesterday

Jacek Olczak: It is important to constantly try to be better than yesterday

Jacek Olczak joined Philip Morris Poland in 1993 as a financial manager. Between 2002 and 2006, Olczak worked mainly in Central Europe and the Baltic states.

In October 2006 he became Managing Director for Germany and Austria, and from April 2009 to July 2012 he was President of the Company for Production Activities for the European Union. A few months later, he became Chief Financial Officer for Philip Morris International, and then Chief Operating Officer, a position he held until his current appointment as Chief Executive Officer for Philip Morris International (CEO).

“Transformations push us to improve, to think beyond products,” said Jacek Olczak, the new CEO of Philip Morris International. His appointment was announced at the end of 2020 as part of the planned changes in the company’s top management, a pioneer in developing smokeless alternatives that are a better choice than long-term smoking. Jacek Olczak, former chief operating officer, will officially take up his new post in May this year during the company’s annual shareholders’ meeting. The current CEO Andre Kalancopoulos will take over the chairmanship of the company’s Board of Directors. He will replace incumbent Louis Camilleri, who is also Ferrari’s chief executive but is stepping down for both personal reasons.

– Mr. Olczak, you have been part of Philip Morris International for more than 20 years. However, what is the biggest challenges for you in taking the position of CEO?

– I have a lot to learn in this new role. I am pleased that I will continue to work with Andre Kalancopoulos as Chairman of the Board of Directors and together with him we will continue to realize the company’s vision for building a smoke-free future. The good interaction between the Board of Directors and the management of the company is a key element of our activity. The process of transformation of the company from the very beginning is supported and well received and this encourages us to be bolder. I am glad that there is this continuity for the vision and the direction in which the company is developing. However, it is important to try to be better every day than you were the day before.

The implementation of our vision and transformation in recent years has been successfully realized, consumers are recognized in it, as they choose and perceive well our smokeless products. The feedback from the investors, who continue to have great and justified trust, is also positive.

– There is a tendency to increase financial regulation in your segment – more and more countries are raising excise taxes on tobacco, which also affects your innovative products. How does this affect your vision for a smoke-free future?

– Governments around the world set their tax policies for different products to achieve many different goals. Although the collection of tax revenues is one of these goals, the wider social and economic goals are no less important.

Fiscal policies that stimulate consumer behavior towards better choices are not new and are widely used in some industries, such as the use of electric cars, as well as in the energy sector. The same goes for the industry, as there are already new smoke-free products that are much better alternatives to cigarettes for smokers who would otherwise continue to smoke.

Differentiated fiscal policies (the highest taxation on the most harmful products) can also help regulate demand through indirect taxes, which can make people make better choices and change their lifestyles, as well as encourage the industry to focus on more innovative products. Examples from around the world show that adult smokers who would continue to smoke quit smoking in favor of smokeless alternatives and eventually quit. Policy choices have a key role to play in accelerating the full transition to smokeless alternatives for adult smokers who would otherwise continue to smoke. If we suddenly put financial barriers in front of consumers who have to adopt new technologies and turn to new tobacco heating platforms and thus prevent them from continuing to use smokeless products, what do you think will happen? It can be expected that most of them will most likely return to cigarettes or switch to illegal products.

– How do fiscal policies affect the smuggling of cigarettes and other tobacco products?

– There is ample evidence of illicit trade in tobacco products. As it begins to grow, societies begin to build protective structures against it to limit it. Although strict law enforcement and strict controls are key to preventing illegal trade, sharp tax increases also play an important role.

If we take any European country, we will see that as soon as a sudden large increase in excise duties is introduced, it is almost guaranteed that the country will be under the pressure of smuggling. The potential of tobacco products to generate tax revenue and their ability to be a stable source of budget revenue have their limitations. If a moderate approach is taken, it is possible to mitigate the side effects of trafficking. The same dynamics are observed with smokeless alternatives.

– How do you imagine the evolution of your business if you replace all cigarettes with smokeless alternatives?

– Following our vision for a smoke-free future, we are transforming the company, building capabilities that are new to our organization. This encourages us to think beyond the standard business models and products we develop. A clear example of this is our research center in Switzerland, which employs over 400 specialists – experts, toxicologists, and scientists. They reach scientific conclusions in their research and development, which can be useful beyond our field.

Our financial results for the third quarter of 2020 show that over 16 million consumers worldwide use our most advanced platform – the tobacco heating device – and over 11 million of them have stopped smoking and switched completely to it. . We still have a long way to go to realize our vision, but the beginning is promising and this is evidenced by our results – our smokeless products are well received by consumers. We are currently the undisputed leader in this category and the product is available in 61 markets. We offer adult smokers who would otherwise continue to smoke better alternatives, and I strongly believe that this has a positive impact on public health and society as a whole.

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