A drop in demand for cigarettes over recent years has led to PMI’s decision to shutdown it German plants. Photo credit: Nikita2706, CC3.0.
Philip Morris International (PMI) is set to close two tobacco factories in Germany amid declining demand across Europe, Bloomberg reports.
The company has seen a substantial drop in cigarette demand over recent years, a trend expected to continue, with a similar decline for rolling tobacco produced at its Dresden facility.
The closures, affecting 372 employees at PMI's Berlin and Dresden plants, are scheduled for the first half of next year. PMI stated it will consult with employees and unions to find “socially acceptable solutions” for impacted staff.
Jan Otten, PMI’s managing director of operations in Germany, emphasized that the company continually evaluates business processes to maintain operational efficiency. “We are aware that difficult but necessary decisions have to be made in order to adapt to current market developments,” Otten said in a press release.
This decision comes amid prolonged challenges in Germany’s manufacturing sector, including high energy costs, sluggish demand, and growing foreign competition—factors raising concerns about the country’s appeal for industrial investment.
PMI has been shifting its focus to smoke-free alternatives like vapes, heated tobacco, and nicotine pouches, aiming for these products to make up two-thirds of its sales by 2030.