PM
#Well, there is a pricing in Europe which is ahead of the ---+ or higher than the pricing we used to have in the first half of the last year.
But ---+ so yes, there is some impact on volumes.
But on the other hand, I think the underlying macros in many European markets or consumer sentiment is somehow helping us with a better elasticities that we would ---+ which we remember from a 2012, 2013 period.
I think ---+ I mean, there is not exact math how much is coming from the illicit trade, because you will have to go from market to market.
I think a contribution from illicit trade to the German volume is presumably higher; contribution of illicit trade in some other places might be the difference.
E-vapor products, they didn't contribute that much in Germany because this was not really any sizable sort of a category.
But I think they're more helping France or Spain or other geographies.
One thing which we also have to remember, we observed a very serious slowdown in the dynamics of the finecut or [other] tobacco products, which is also the outcome of a tax and price, and I guess also the better consumer sort of a sentiment.
You remember this is a category which used to grow say 2012, 2013 in the tune of 6% to 7% per annual; and these volumes now are growing, I think, around 1% max.
So you could see the drastic change in the dynamics, which obviously was pushing or pulling the consumers from the manufactured cigarettes to the finecut product much stronger in the past that we see now.
I mean, I can't give you the number how much each of these on the total ---+ of these drivers on a total EU basis contributed.
I think we will have to go market by market and put some weight, where is more of the weight, where is less of the weight, which helps the total market performance.
But look, let's enjoy the good total market performance.
We know what are the drivers; we've been looking that finally one day all these things which were the significant headwind for us will unwind, and will start converting into tailwinds, and hope this is a more sustainable trend for the [EU].
Well, I mean, everything depends obviously how TPD is going to be transposed into the member states' legislation, and that's the process which started.
There are some member states which already are advanced; there are some member states which still are before the parliamentary etc.
discussion.
The deadline, as we know, is May 2016.
We will be in a position to say how individual member states ---+ what sort of a framework they create for both the novel tobacco product and the e-cigarettes.
As you remember, in TPD there is a distinction between both, group of both categories.
Then we'll see how that's going to play out.
Well, it's not much really of a development which happened, right.
I mean, the JT case in Ireland was retained in Ireland, which I think is a good news because it will otherwise result in a clash of two similar, if you like, cases at ECJ level.
I think it's fair to assume that ECJ, because I think it's the most important part of a challenge against the directive, that ECJ ---+ which will reach the European Court of Justice, or it will reach the conclusion before the due date for the transposition implementation of the directive, which I said earlier is May 2016.
And that's it, essentially.
Okay.
So, on LAC I think we had a strong pricing coming from Argentina, Brazil, Mexico, Canada; so essentially for all our key geographies there we enjoyed a strong pricing.
I think it should continue.
LAC last year and this year, they're really performing very strongly.
I think they had a good momentum.
As I mentioned earlier answering other questions, there is a bit of a share pressure in Mexico.
But on the other hand, Mexican total industry volumes are doing better; so overall in the financials, we're looking pretty okay.
On South Korea, it looks that our initial guidance for the total market for the year, 20%, 25%, decline is now lower; total closer to the 20%.
It's still significant, but let's remember ---+ I'll let you remember how big the price increase was.
So I think overall it's going better or slightly better than expected.
And our share is up.
So I think, yes, I mean we have the tax increase, price increase behind us; let's see how this is going to unfold.
But so far it unfolds pretty strong.
And, on Australia, not much really as I mentioned earlier, which would happen there.
The prices went up.
There continues some sort of discounting.
The down-trading is there maybe to some extent at the lower level.
Australian total market volume is obviously distorted year on year due to the tax price changes.
I think on the year-to-date basis, Australia is 0.7% actually up total market size.
But, this doesn't mean that the market grows; I think it's a little bit of a distortion there.
Not really.
I mean just one thing to clarify always when we talk about the pricing is the pricing variance.
When we report the volume/mix, we report the mix with the volume (multiple speakers)
But yes, there was some negative mix for EEMA, and I think largely driven by Russia.
On the other hand very encouraging ---+ and I haven't seen these results for the long time: we've had zero mix impact in EU.
Okay.
So that on the total PMI basis, the mix is not that much of a major issue.
Obviously, you have the mix in Australia due to the down-trading, but in a few isolated geographies.
Well, I think many markets have returned to what we would call the standard sort of tobacco product elasticities: minus 0.3%, minus 0.5%; and I see more and more markets which are squarely fitting into this range, even maybe some of them in the lower end of this range.
So in a minus 0.3% territory.
So that's good.
I will start with the second one, important geographies in which we're in the middle of the rollout of the commercial approach is Indonesia, from the large OCI market.
Coming to how much one could attribute to the commercial approach and how much to 2.0, I would put like this.
Marlboro 2.0 is the concept, right.
It's a great concept; it's a great design; it's a great product lineup; it's a great support materials.
And at the end of the day you need to have a damn skilled organization to properly implement this in a market.
So that's your commercial approach.
So this comes both together.
I mean if a great idea, lousy implementations, no result.
If you have a lousy idea, great salesforce, who cares.
No impact.
So I think you need to have always the optimum, the right mix of both.
And I guess we're at this stage now.
From the ---+ no.
There are markets which are ---+ no, from a significant market I guess it would be Indonesia, which pops up to my mind now.
I mean in many other markets, we're well advanced.
Maybe there are some territories in some places, but we also don't necessarily aim at covering 100% of any given market territory.
It has to have the economic sense.
I mean we're running the details, cost-benefit analysis.
And, no, I think Indonesia would still stay on the list.
I would think about Indonesia.
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