NEWS
VAPING
HELPS
WIPE
£100BN
By Gordon Stribling
OFF TOBACCO
INDUSTRY IN JUST ONE YEAR
MEANWHILE, ALTRIA LOOKS TO JUUL FOR VAPE INDUSTRY FOOTING
Vaping helped wipe over £100 billion
off the tobacco industry in 2018.
British American Tobacco (BAT)
was the hardest hit, losing around
50 percent of its stock market value.
Imperial lost around 25 percent, followed by
Philip Morris and Altria with around 30 percent
and Japan Tobacco around 20 percent.
Smoking prevalence in the US and UK is at an
all-time low, with millions of people switching to
e-cigarettes every year.
Royal Bank of Canada analyst, James Edwardes
Jones, said:
“The impact of the FDA’s menthol cigarette ban
and margin erosion from the growth in next-
generation products is priced in, although for this
previously uber-defensive and predictable stock
the future is very opaque.”
While small, independent businesses make up
the lion’s share of the international vaping market,
the major tobacco companies have established a
notable presence in recent years.
Blu, Vype and Logic products are readily available
in supermarkets and convenience stores and
are for many people the first port-of-call in the
transition from smoker to vaper.
Altria discontinued its MarkTen and Green Smoke
vape brands last year. However, the Philip Morris
US parent company will be looking to gain a
stronger foothold in the industry after acquiring a
35 percent stake in JUUL Labs.
As part of the Altria deal, JUUL distributed $2
billion in bonuses to its 1,500 staff-members,
netting the average employee $1.3 million.
The deal proved to be highly controversial,
attracting criticism from within the industry and
from anti-tobacco groups such as the Campaign
for Tobacco-Free Kids.
JUUL Labs CEO Kevin Burns said in a statement:
“We understand the controversy and scepticism
that comes with an affiliation and partnership
with the largest tobacco company in the US. We
were sceptical as well.”
“But over the course of the last several months
we were convinced by actions, not words, that
in fact this partnership could help accelerate our
success switching adult smokers.”
“FOR THIS PREVIOUSLY UBER-DEFENSIVE AND
PREDICTABLE STOCK THE FUTURE IS VERY OPAQUE”
22 | VM21