Key Takeaways
- Philip Morris said the economic impact associated with its smoke-free transition in Spain exceeds EUR 3.3 billion, or about USD 3.88 billion.
- The company said its activity generates more than EUR 2.6 billion, or about USD 3.06 billion, for Spanish public finances, mainly through excise duties and VAT.
- Philip Morris said more than 90% of nicotine consumption in Spain still comes from conventional cigarettes, while 42% of its global revenue already comes from alternatives such as heated tobacco and electronic devices.
- The company identified Extremadura, the Canary Islands and Madrid as three key areas in its transformation strategy in Spain.
- Philip Morris said Spain has significant market potential, but argued that equal tax and regulatory treatment of all nicotine products could slow the shift toward smoke-free products.
2Firsts, April 21, 2026
According to the report, Philip Morris said it is accelerating its shift in Spain from conventional cigarettes to smoke-free products and claimed that the related economic impact already exceeds EUR 3.3 billion, or about USD 3.88 billion based on the European Central Bank’s April 20, 2026 reference rate of 1 EUR = 1.1760 USD, equal to 0.23% of Spain’s GDP. The company said that impact is mainly driven by tax contributions and spillover effects on other sectors.
Philip Morris said it is reducing dependence on conventional cigarettes
During a media meeting, Philip Morris Spain general manager Daniel Cuevas said the company’s objective is to turn cigarettes into a “museum object” as soon as possible. The report said the company is seeking to make its business increasingly less dependent on cigarettes. Philip Morris said that globally, 42% of its revenue already comes from alternatives such as heated tobacco and electronic devices, while the pace of transition in Spain remains slower.
The company said conventional cigarettes still account for more than 90% of nicotine consumption in Spain
Philip Morris said more than 90% of nicotine consumption in Spain still comes from conventional cigarettes, which in its view shows the growth potential for newer categories. The company said many people still think all products are the same, while it describes the newer products as “better alternatives,” though not risk-free.
The company said its activities generate more than EUR 2.6 billion in public revenue each year
Philip Morris also used the event to highlight its economic weight. According to figures presented by the company, its activities generate more than EUR 2.6 billion, or about USD 3.06 billion, for Spanish public finances, mainly through excise duties and VAT. The company also said that for every euro it contributes directly, another two euros are generated in the wider Spanish economy.
Philip Morris said it works with more than 500 local suppliers and has tripled its workforce over seven years to more than 1,000 employees.
Extremadura, the Canary Islands and Madrid were highlighted as three key regions
Philip Morris said the territorial impact of its transformation is uneven and that Extremadura, the Canary Islands and Madrid are three major growth poles. The company said that in Extremadura, where 98% of Spanish tobacco is cultivated, it has invested EUR 230 million over the past decade, or about USD 270.48 million, and expects to increase leaf purchases as heated tobacco develops.
It also said it has invested EUR 15 million in the Canary Islands, or about USD 17.64 million, to create an export hub now supplying more than a dozen European countries. Madrid was described by the company as an international center for procurement, human resources, supply chain functions and retail operations.
The company said regulation and taxation are the main obstacles
The report said Philip Morris sees regulation and taxation as the main barriers to its transition in Spain. Using the example of tax incentives for electric vehicles, the company argued that similar support should be considered for its alternative products.
Philip Morris particularly criticized the Spanish government’s intention to align tax and regulatory treatment across all nicotine products, saying this would “penalize alternatives” and slow the transition. The company also said that measures such as nicotine limits for pouches or flavor bans could make some categories “unviable.”
Philip Morris said the Spanish market still has major potential
Philip Morris said the Spanish market has “enormous potential” and repeated its global target of getting two-thirds of revenue from smoke-free products by 2030. At the same time, the company said a stable regulatory framework will be essential and called for more dialogue with public authorities and society.
Image source: elperiodico
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