Business

The race to replace cigarettes is heating up


American smokers trying to quit can choose between vapor cigarettes, nicotine packs and — a more recent introduction — heated tobacco sticks. Tobacco companies have a lot of factors that push them to turn around.

Today, vaping is the preferred alternative to smoking in the United States American owner Reynolds

British and American tobacco

BTI -1.41%

hopes it will stay that way, arguing on a recent earnings call that Americans won’t buy hot tobacco products in bulk. BAT is applying to the U.S. Food and Drug Administration for permission to launch its Glo heated tobacco product, but executives say this is primarily to gain leverage with foreign regulators rather than because they are optimistic about domestic demand.

Cigarette maker Lucky Strike has a reason to talk about vaping. Its Vuse brand has overtaken Juul as America’s top e-cigarette, and Hot tobacco is a much bigger business for BAT .’s opponent

Philip Morris International,

AFTERNOON -0.33%

the company that sells Marlboro cigarettes outside of the US PMI will soon have a US distribution network to deploy its pioneering IQOS heated tobacco devices, assuming it completes a proposed $16 billion acquisition by the Swedish Match nicotine bag specialist.

Certain smokeless products may occupy different markets depending on consumer tastes and local laws. IQOS has been a huge success in Japan, where consumers have a record of openness to new innovations. It must have also helped PMI that nicotine-containing e-cigarettes are banned. The situation is turning upside down in the US: Vaping has a 7% share of the overall nicotine market, according to the BAT, compared with 1% for modern oral nicotine bags like the Zyn and less than 1% for heated cigarettes.

SHARE YOUR THOUGHTS

Are heated tobacco sticks popular with Americans trying to quit? Join the conversation below.

E-cigarettes have been around in the US for about a decade, which may partly explain their lead. IQOS was only released in 2019, so hot-dried tobacco is less familiar to American consumers. Covid-19 and an intellectual property dispute with BAT have also slowed down the brand’s implementation.

But timing may not be everything. The levels of nicotine in U.S. combustible cigarettes are high, and it is technically easier to replicate the impact with the nicotine salts in e-cigarettes than in heated cigarettes — although levels in IQOS are close to levels in traditional cigarettes.

Vaping also enjoys the same favorable tax treatment in the US Federal excise tax on heated tobacco as it does on cigarettes, while not on e-cigarettes. A smoker who normally pays around $8 for a pack of Marlboro cigarettes would pay the same to switch to IQOS heated cigarettes, but only $6 for BAT’s Vuse Alto e-cigarette brand, data shows. are from

UBS

Shows.

The IQOS cigarette warmer has been a great success in Japan.


Image:

Image of Fabrice COFFRINI / AGENCE FRANCE-PRESSE / Getty

However, this gap may not last long if Washington decides to adjust the nicotine tax to offset the impact of falling tobacco sales on its revenue. And in another respect, IQOS has an edge: The PMI brand is one of the few FDA-approved non-combustible products to tell smokers that its use reduces their exposure. with harmful chemicals. To date, no vaping brand has been granted this revised risk classification.

The US e-cigarette market is in the midst of an overhaul. All vaping brands had to apply to the regulator to be allowed to continue selling. If flavored e-cigarettes, such as menthol, are not approved, it will be harder to encourage some smokers to switch, limiting the growth of the vaping genre.

E-cigarettes are on top of America’s top today, but until regulations and taxes settle in, there’s still a lot to go into the big tobacco play.

Write letter for Carol Ryan at [email protected]

Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8



Source link

news7f

News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button