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During the first half of 2016, PM communicated directly with officials from the Ministries of Health and Finance via high-level meetings and letters prior to marketing of IQOS to the public.6 This is consistent with PMs global strategy.8 Following these meetings, the Ministry of Health (MOH) sent a letter to the Tax Authority defining IQOS as a new product which did not fall under existing tobacco regulation.9 PM began advertising IQOS online in December 2016

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Chinas Imports of Smoked Salted or Dried Fish, Average Prices Chinas Proxy Price Level on Imports, K US$ per 1 ton (left axis), Growth Rates in % (right axis) Key observations: Average annual level of proxy prices of Smoked Salted or Dried Fish has been fast-growing at a CAGR of 11.29% in the previous 5 years

However, given Altrias dominant position in the non-flavored cigarette market (Marlboro has an over 50% share in the cigarette market), as well as the relative price inelasticity of tobacco products, the company has been able to increase its revenue per unit, and consequently its sales, without influencing the demand significantly

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