On 28 March, PMI will become a separate business entity that will focus on strong business growth in emerging economies as US sales decline and become increasingly subject to litigation. The move will exempt PMI from US tobacco regulations and negative public opinion while enabling greater freedom to experiment with new product lines.

According to the World Health Organisation, smoking is rising 3.4% a year in developing countries as it falls in developed nations. Among Americans, smoking rates almost halved from the mid-1960s to the mid-1990s, falling to 23% of adults by 1997. The spin-off will benefit parent firm Altria through a significant reduction in corporate overheads, including relocation of corporate headquarters from New York to Richmond, Virginia, as part of the restructuring.

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PMI will remain headquartered in Lausanne, Switzerland, where Altria also moved food company Kraft’s European headquarters after it completed a spin-off from its US group last year. Emerging economies have long been manufacturing destinations for global companies and are now becoming important consumer markets to many industries, including the tobacco business.

UK-headquartered Imperial Tobacco has markets in 130 countries. Spokesman Simon Evans said: “It’s true that western markets are declining but we see it as a manageable decline where if we can increase our market share we are still driving profitable growth”.