Tag: e-cigarettes

Tobacco Rag banner

white cloud cigarettes

pattyn banner

itm banner

Imperial to buy Dragonite’s e-cigarette business

| September 5, 2013

Imperial Tobacco Group (ITG) will buy Dragonite International’s e-cigarette business for $75 million, reports Bloomberg Businessweek. The acquisition depends on the approval of Dragonite shareholders.

Simon Evans, spokesman for Imperial, said the acquisition is not related to ITG’s August announcement that it was on track to introduce its own alternative nicotine products in 2014 through its Fontem Ventures subsidiary.

Dragonite founder and Executive Director Hon Lik is credited with inventing the technology behind the e-cigarette. Dragonite says it owns an “extensive portfolio” of global patents and pending patents on e-cigarette technologies.


Morgan Stanley shares thoughts on e-cigs

| August 16, 2013

In a report summarizing “key thoughts” on e-cigarettes, financial services provider Morgan Stanley acknowledges it has been surprised by the success of e-cigarettes, given the commercial failures of other innovative products such as Accord and Eclipse and the slower-than-envisioned development of tobacco segments such as snus and dissolvables.

E-cigarettes have already achieved volume equivalent to about 1 percent of the U.S. market. Morgan Stanley attributes the sector’s success to effective nicotine delivery, broader consumer acceptance of technology, widespread consumer perception of less health risk versus conventional combustible products, growing societal pressure against cigarette smoking and the current regulatory vacuum, which allows for aggressive marketing.

At the same time, the bank notes that e-cigarettes won’t necessarily benefit established tobacco companies. The potential business risks to the traditional industry include cannibalization of tobacco cigarette sales volumes, FDA regulations preventing the marketing of e-cigarettes under tobacco cigarette name brands and uncertainty about the capacity of e-cigarettes to develop the brand equity and consumer loyalty that is typical for traditional cigarettes.

According to Morgan Stanley, Lorillard is best positioned to take advantage of the new segment because it owns the current e-cig market leader Blu Ecigs, while Reynolds American “probably has the most to gain from cigarette industry discontinuity.” Altria, as the dominant cigarette incumbent, has the most to lose.

Future success for e-cigarettes, according to the investment bank, depends on the scale and pacing of technological and product performance improvements, along with ultimate FDA regulation and federal/state excise tax structure, the analyst said.



Goldman Sachs “bullish” on e-cigs

| August 9, 2013

Goldman Sachs analysts said Aug. 7 that they remain bullish on category growth prospects for e-cigarettes, which “have the potential to transform the tobacco industry.” However, they noted that not all tobacco companies would benefit equally, as e-cigarette growth could simultaneously accelerate the decline in conventional cigarettes.

E-cigarettes currently account for less than 1 percent of total U.S. industry sales. Goldman Sachs believes they could reach 19 percent of sales and 10 percent of total industry volume by 2020 at the expense of conventional cigarettes, whose share of total tobacco industry profit pool is estimated to shrink to 63 percent by 2020 from 82 percent today.

E-cigarette sales have doubled in each of the past two years, with continued building of awareness, trial and repeat usage, the analysts said, adding that they appear “positioned to extend the duration of the tobacco industry’s profit generation and even accelerate industrywide profit growth.”

E-cigarettes also have the potential to generate higher profit per cigarette-equivalent pack as they are not subject to Master Settlement Agreement payments and will likely have lower taxes, the analysts noted.

The analysts said they see Lorillard as best-positioned in e-cigarettes because of its “first-mover advantage” and limited cannibalization on its cigarettes, while Altria has the most at risk given its 55 percent share of cigarette industry profit.

“E-cig no more risky than smokeless”

| August 9, 2013

A study funded by The Consumer Advocates for Smokefree Alternatives suggests that e-cigarettes are no more risky than other smoke-free tobacco and nicotine products.

After reviewing more than 9,000 “observations” about the chemistry of e-cigarette vapor and e-liquids, Igor Burstyn of the Drexel University School of Public Health found “no evidence that vaping produces inhalable exposures to contaminants of the aerosol that would warrant health concerns by the standards that are used to ensure safety of workplaces.” Exposure for bystanders, he said, is likely to be orders of magnitude less, and thus poses no apparent concern.

The study cautioned that e-cigarette users are inhaling substantial quantities of propylene glycol and glycerin, the main chemicals in e-cigarette liquid. The chemicals are not considered dangerous, and the levels are below occupational exposure limits, but Burstyn suggested ongoing monitoring to confirm that there is no risk.

CASAA Scientific Director Carl Phillips said the study “assures us that e-cigarettes are as low risk as other smoke-free tobacco and nicotine products, like smokeless tobacco and NRT.”

The study is here.

Coresta e-cigarette task force to present first report

| July 21, 2013

Coresta’s new e-cigarette task force will present its first report during the organization’s Smoke Science and Product Technology meeting in Seville, Spain, Sept. 29-Oct. 3, 2013.

Although e-cigarettes do not contain tobacco, Coresta members in November agreed to establish a task force dedicated to this new product category. The interest in e-cigarettes has been growing significantly in recent years, but substantial gaps remain in the science relating to these products, their components and the product-use patterns. Capitalizing on its global scientific skills and expertise, and in cooperation with e-cigarette stakeholders, Coresta hopes to fill these gaps.

The task force’s short term objectives are to:

  1. create a document on worldwide product definition and definitions of terms for e-cigarettes to support harmonization of nomenclature;
  2. gather and share preliminary data on analysis relevant to e-cigarettes worldwide with a view to making recommendations for product testing;
  3. define the relevant categories of products for potential further Coresta studies.

More than 30 Coresta member organizations from all over the world, including contract laboratories, scientific consultants, tobacco and e-cigarette manufacturers, liquid and equipment suppliers, have started work in two teams, dealing with the two first objectives. They are collecting published and unpublished data and literature worldwide on history, principles of operation, product types, regulatory status and analytical testing issues and results. Based on this preliminary and necessary review, the task force will then work on the third objective.


Ex-Facebook president invests in e-cigarettes

| June 10, 2013

A group including Silicon Valley entrepreneur Sean Parker is investing $75 million is NJOY, a leading manufacturer of e-cigarettes, reports The Wall Street Journal. Parker co-founded the music-sharing site Napster, was the first president of Facebook and has been a big donor to cancer research.

NJOY accounted for 35.6 percent of the U.S. cigarette market in U.S. convenience stores in the four weeks ended May 11, according to Wells Fargo Securities. NJOY Kings’ brand more closely resembles regular cigarettes than do some competing products. The company has been advertising on TV and attracted celebrity endorsers such as musicians Courtney Love and Bruno Mars.

In March, former U.S. Surgeon General Richard Carmona joined NJOY’s board, saying it is important to explore alternatives to traditional cigarettes because the adult smoking rate has remained stuck at around 20 percent of the population.

E-cigarettes are believed to be less harmful than traditional cigarettes because they don’t rely on combustion However, the Food and Drug Administration warned consumers in 2009 the new technology could pose its own health risks and required further study. The long-term impact of inhaling e-cigarette vapor, which contains substances such as propylene glycol, has yet to be determined. The agency is planning regulation that would treat e-cigarettes as tobacco products.

Industry experts says U.S. retail sales of e-cigarettes could reach $1 billion this year—just 1 percent of the country’s cigarette market but twice that of 2012.