Big Tobacco’s Growing Interest in E-Cigarettes Hurts Vapers
Electronic cigarette sales are booming! Although the final numbers have yet to be tallied, estimates for 2013 were expected to reach $1.7 billion. Wells Fargo projects that the figure will top $10 billion by 2017 and Bloomberg predicts that sales will exceed those of traditional cigarettes by 2047. Up until recently, the market was dominated by small upstarts and entrepreneurs, but big tobacco companies have taken notice and the face of the vaping industry is rapidly changing, leaving many vaping enthusiasts, including myself, worried about the future.
Tobacco Companies Jumping On Board
All three of the major U.S. tobacco companies are now actively involved in the electronic cigarette industry:
- Lorillard Inc. – The No. 3 U.S. tobacco company and maker of Newport cigarettes was the first to jump into the game, acquiring the Blu e-cigarettes in 2012. The company has spent heavily on marketing and distribution, making Blu the clear industry leader, with over 40% of the U.S. market. The company also acquired SKYCIG last year, a premium brand of e-cigs based in the UK, giving the company a global presence and 49% of the total market.
- Reynolds American Inc. – In 2013, the No. 2 U.S. tobacco player and maker of Camel cigarettes launched its Vuse line of electronic cigarettes in Colorado and almost instantaneously captured 62% of the Colorado market. It has plans to rapidly expand distribution in 2014.
- Altria Group Inc. – The No. 1 U.S. tobacco company and maker of Marlboro cigarettes started testing it's MarkTen line of e-cigs in 2013 through it's NuMark subsidiary. The last big player to enter the game, Altria played some catch-up earlier this week by purchasing Green Smoke brand electronic cigarettes, an established e-cig company formed in 2008.
The most recent move by Altria to purchase Green Smoke is a clear indication that Big Tobacco is serious about dominating the electronic cigarette industry. Although it's $40 million annual revenue makes up just a tiny fraction of the market, Green Smoke is an industry leader with an established reputation. Demand for electronic cigarettes has nearly doubled every year since their introduction in 2006, and the vast majority of this demand is derived from current smokers. With tobacco sales on the decline for decades, it's no surprise that cigarette companies are taking such a big interest.
Why Vapers Should Be Worried
I think it's great that more-and-more people are being exposed to electronic cigarettes through the distribution and marketing efforts of companies like Lorillard (Blu), but I have major conflicts with big tobacco companies being behind these campaigns. First and foremost, tobacco companies have no real interest in promoting healthier alternatives or helping smokers quit – their sole objective is to INCREASE PROFITS AND ELIMINATE COMPETITION. They don't care about smokers, and if history is any indication, they could care less if we ultimately die from their toxic and deadly products.
Big Tobacco is unconcerned about us or what we need to effectively quit using their core product – tobacco. It's a conflict of interest… and vapers could lose:
- Big tobacco companies have DEEP POCKETS
In 2010, the combined profits of the six leading tobacco companies was $35 billion. That's a whole lot of money to control distribution, expand advertising and fund lobbyists.
- Big tobacco companies are pushing for more regulations
While they're eager to jump into the electronic cigarette business, big tobacco companies are pushing for strict regulations that will make it much more difficult for other companies to operate. What better way to eliminate the competition than to push for tight regulations on e-cigarettes? The cost of implementing these changes is sure to force many small electronic cigarette companies out of business. Tobacco companies could care less if they hurt vapers or the electronic cigarette industry because they can still fall back on their core asset – TOBACCO.
- Strict regulations will increase costs and limit our options
The impact of tight regulations, inspired in large part by lobbyists and other tobacco funded groups, is sure to affect every vaper. Reduced competition, higher operating costs and new taxes are sure to raise prices substantially. In addition, we're likely to loose access to many of the high-quality, custom made vaping products that have made our experience so enjoyable and effective at helping us quit smoking. Most worrisome to me is the potential elimination of flavored e-juice. Many critics claim that the use of tasty flavors entices children, overlooking the fact that flavor variety is a key component in helping smokers quit. In 2009 flavored tobacco products were eliminated, and if tobacco companies have their way, the same restrictions will be applied to e-cigs, improving their sales and crippling the competition.
- Public scrutiny against tobacco hurts the vaping community
For years big tobacco companies have mislead, exploited and blatantly lied to the public. After decades of deception, the last thing anyone wants to hear is that tobacco companies are trying to sell them a new, healthier product. It leads to unnecessary scrutiny, and lawmakers have already taken notice with citywide public bans, newly proposed regulations and taxes.
- Big Tobacco produces CRAPPY PRODUCTS!
Last but not least, big tobacco companies like Lorrilard (Blu) are not offering the products that most vapers want (and need) to curb their cravings and eliminate their deadly smoking habit. “Cigalike” products produced by companies like Blu may be a appealing at first, but they're ineffective for most users, who almost always upgrade to more satisfying devices.
What's Next For Vaping?
It's tough to know (for sure) how the vaping industry will be affected by big tobacco companies jumping in, but in my opinion, the impact is bound to be negative. Tobacco companies have three huge advantages: extensive distribution networks, millions of existing customers, and deep pockets. Their efforts to regulate and dominate the industry will undoubtedly raise prices for everyone. We may or may not be able to continue vaping on our favorite flavored e-liquid, but it's going to cost significantly more and we'll have less options at our disposal.