Vapouround magazine ISSUE 21 - Page 22

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