One of the frequent accusations levelled at vaping is that it is a Trojan horse to maintain a lifelong addiction to nicotine. Doubters frequently overlook the fact that Big Tobacco does not command dominance in this new marketplace. This point is underlined by electronic cigarettes being directly linked to a decline of over £100-billion in the value of the world’s top five tobacco companies.
British American Tobacco (BAT) achieved notoriety with its raunchy (then banned) adverts for the VIP brand, but this didn’t translate into sales. The product failed to deliver what smokers need when switching from tobacco. Consequently, it has seen its value nosedive to around half of what it used to be on the London Stock Exchange.
Worse, BAT’s acquisition of Reynolds left it with a strong portfolio of menthol brands – something that is front and centre in the list of things the American Food and Drug Administration wants to attack next.
Imperial and Japan Tobacco International are both down by a fifth, while Altria and Philip Morris lost 30% of their value. Altria stand the strongest to withstand this onslaught following their purchase of a large stake in Juul Labs.
Ed Monk, the associate director of Fidelity Personal Investing, says: “Investors have become sceptical that big tobacco can replace sales of cigarettes with next-generation vape products.”
James Edwardes Jones, an RBC analyst, added: “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.”
The following lists the tobacco industry’s current involvement in the vape sector:
Altria & Phillip Morris International
- Green Smoke
- JUUL (part-stake)
British American Tobacco
- 10 Motives
- RIZe e-liquid
- Blu E-Cigs
- Nerudia e-liquid and nicotine
- Cosmic Fog
Japan Tobacco International
- Ploom Model2 (Previously owned by Ploom Inc, who went on to form Juul Labs)
Huabao International Holdings
- V2 Cigs
- OCB vap
- Vapour2 UK
- Vapor Couture
- Ace High
- Ranch Hand
- Bull Smoke Flavours
Standard Diversified Inc.
- Zig Zag
- Vapor Beast