It’s been another busy month, with news spanning the biggest tobacco companies in the world to vaping giant Juul. In the UK, there have been new studies done regarding cigarette consumption and an update from the WHO regarding best-practice smoking cessation. The legal battle in San Francisco rages on between the law makers and vaping companies.
It’s been a big month across the board for all the big names in the tobacco industry. British American Tobacco have seen higher than expected sales forecasts for their first half. While cigarette sales are down 5.5%, shares sales were up 6.6% and total increase in revenue was up 4.6% overall. The main reason attributed to their success is their smoking alternatives – including heat not burn device “glo”, oral nicotine pouches and of course their “vuse” e-cigarette. It follows the trend of Big Tobacco seeking out new revenue streams as the consumption of tobacco products like cigarettes and cigars continues to drop worldwide.
One of the biggest stories this month is the potential merger between Philip Morris International and Altria. Bearing in mind the two tobacco giants split back in 2008, the news resulted in an initial drop in share value – 8% for PMI and 4% for Altria. Were they to merge, it’s speculated it would be a 59% – 41% split, but with no added benefits for shareholders. Like BAT, both Altria and Philip Morris International have been losing money year on year and have been investing heavily in smoking alternatives.
PMI have released their IQOS throughout Europe already and will soon be releasing it into the US market following approval. Altria spent a hefty $12.5bn for a 35% stake in Juul late last year. The deal is still in the early stages and may not even go through – if it does go ahead it would result in a combined value of $200bn. It’s believed one of the motivations is to help promote Juul further. While Altria is mostly US based, PMI is focussed on the international market which would open up new channels for heat not burn and e-cigs owned by both brands.
Following more than a year of criticism over the underage use of their devices, Juul is in the early stages of trialling their user controlled vape. The Juul C1 connects to Android mobile phones and can be locked and searched for through the Juul app. It also tracks use throughout the day as well as where you’re using it. Users will be able to control whether the vape will fire or not by using the lock function in the app. Juul say it’s unclear whether this will deter teenage use at this time and some question what will be done with user data but it may be a step in the right direction for the vaping giant.
Juul have also ramped up their support for the Coalition For Reasonable Vaping, adding another $3m to the fund that’s fighting legislative changes in San Francisco. With six months before the total ban on vaping comes into effect – including buying and using any form of e-cigarette – many vaping companies are contesting the law. The CRV will use the funds to go door to door, hand out fliers and run ads on the tv to sway voters to prevent the change from going through.
In wider Juul and vaping news, Juul have announced they won’t be renewing their Vapor Technology Association (VTA) membership after it runs out. While this came as a shock to some following Juul’s significant contributions to the VTA, Juul stated there were some key differences in opinion. The differing views stemmed from Juul’s support of Tobacco 21 and banning some e-liquid flavours, whereas the VTA believe Tobacco 21 to be limiting for 18 – 21 year olds already using tobacco products who are trying to quit.
Their decision to leave also followed the VTA’s decision to sue the FDA over the May deadline for vape and e-liquid manufacturers to test their products. The VTA said it will eliminate a lot of smaller companies from the market altogether, given the high cost and short period in which to complete testing to be compliant. Originally the deadline was meant to be 2022 but the FDA has also been sued by anti-tobacco agencies who wanted the date pushed forward.
A new report released by the World Health Organisation says the UK isn’t providing “best practice” smoking cessation support. While the smoking population in the UK continues to drop, many people are taking it upon themselves to quit with things like vaping. The other shortfall is that the UK still allows sponsorships from tobacco companies. Earlier this year PMI and BAT were criticised for their sponsorship of Formula One.
Campaigns like Stoptober, run by Public Health England as well as Vapril have helped many more people quit smoking for good. As a result, a recent study from Cancer Research UK indicates the UK is smoking a billion fewer cigarettes a year. With a continuous fall in the smoking population we have less smokers generally, but those that continue to smoke are also smoking less.
India is considering a blanket ban on e-cigarettes, despite the fact they have the second highest smoking rate in the world after China. While it’s unclear whether there would be any repercussions for e-cig users, the ban is most likely to affect manufacturers, retailers and anyone advertising of e-cigarettes. This is a further development from e-cigarettes being classified as a “drug” by the Indian government two months ago. Depending on how many offenses someone has the punishment is proposed to be anything between a 500,000 rupee fine to three years in prison.
A survey completed by ASH Finland has found that just over half of Finns (51%) are in favour of raising the legal age to purchase tobacco products (including e-cigs) to 20. With most people starting smoking before the age of 20, the logic is that, similar to Tobacco 21, it would reduce the accessibility for teenagers.