Tobacco, Coldiretti and Philip Morris: renewed supply chain agreement

Medium-long term planning and economic sustainability for 1,000 agricultural businesses

Agreement for thepurchase of tobacco grown in Italy and for the sustainability of the entire supply chain which is renewed and will guarantee medium-long term strategic planning for 1,000 Italian agricultural businesses. This is what is foreseen in the agreement signed today between Coldiretti and Philip Morris during the event ‘Food and agriculture: food sovereignty, supply chain, biodiversity’ within the Coldiretti Village underway in Rome.

The agreement was signed by the president of Coldiretti Ettore Prandini and the president and CEO of Philip Morris Italia Marco Hannappel in the presence, among others, of the Minister of Agriculture Francesco Lollobrigida and the president of the Lazio Region Francesco Rocca.

“Our commitment in the agricultural sector, which began more than ten years ago with the first supply chain agreement in 2011, has generated important results which demonstrate how these agreements are an indispensable tool for protecting farmers and the Italian system”, explained Marco Hannappel , CEO and president of Philip Morris Italy and president of South-Western Europe Philip Morris international.

international best practice, +25% profitability for participating companies

The signing follows the multi-year agreement signed in March between the Ministry of Agriculture and Philip Morris Italy, which provides for investments of up to 500 million euros between 2023 and 2027 by Philip Morris in the Italian tobacco supply chain, with the commitment to purchase approximately 50% of Italian tobacco. This is the highest investment in the sector by a private company and the only one to have a five-year time horizon, to guarantee stability and planning in the medium term for the farmers involved.

The agreement, a best practice recognized at national, European and international level, guarantees economic sustainability and the possibility of medium-long term planning for the agricultural businesses involvedwith investments aimed at promoting environmental sustainability, the digital transition and the training of young farmers.

All this will lead to an increase in profitability of 25% for the agricultural companies adhering to the supply chain agreement between Coldiretti and Philip Morris compared to non-adhering companies, according to the results emerging from an analysis by the Divulga study center on the data of the agricultural companies three-year periods 2014-2016 and 2018-2020.

Philip Morris commitment generated investments of up to 2.5 billion

“The path of supply chain agreements is crucial for the growth of the country system as it promotes the true made in Italy by creating value in terms of income and employment, as well as environmental sustainability”, declared the president of Coldiretti, Ettore Prandini , in underlining that “the agreement with Philip Morris Italia also represents an example for other sectors from this perspective since it makes innovation one of the central elements of the activities implemented. The digitalisation tested in tobacco could, for example, be extended to other supply chains,” he added.

The long-term commitment by Philip Morris with the Ministry of Agriculture and Coldiretti since the early 2000s has generated investments in agriculture of up to 2.5 billion euros in total for the benefit of the Italian tobacco supply chain. Among the actions envisaged, the dissemination of good agricultural and work practices, promoting initiatives aimed at reducing Co2 emissions (also through the use of alternative renewable energies), the responsible and sustainable use of water resources, the protection of biodiversity and continuing to develop innovative technological projects through acceleration and open innovation models.

A commitment that represents for the company an essential component of strategic investments for the creation and strengthening of an integrated Made in Italy supply chain focused on smokeless tobacco products, which at a national level has around 41,000 people.