Tobacco Giants' Profits Are Down: Thanks To Vaping?

Tobacco Giants' Profits Are Down: Thanks To Vaping?

Monday 10th February, 2014 | Vaping News

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A number of developed countries are seeing a decline in the sales of cigarettes - and various cigarette manufacturers are seeing the effects. Philip Morris International Inc. reported a decrease in profits in the fourth quarter of 2013 earlier this month, and British American Tobacco reported last year that their first half sales volumes was down - which they countered with an increase in cigarette prices.

 

Vapour Cigarettes Are On The Rise

 

It is likely - at least in part - that this drop in profits is thanks to vaping. Figures published in September 2013 stated that sales of e-cigarettes in the UK had already increased to £90 million in the first three quarters of the year, compared with £9 million in 2012. E-cigs have made the mainstream media a number of times over the last couple of years, and are now by far the most popular smoking cessation aid in the UK: Now they share little resemblance to tobacco cigarettes in their physical form and differ in terms of the way in which they are used. They are a cheaper, odour-free alternative to cigarettes - and without the negative health connotations associated with smoking. With vapour cigarettes becoming more and more dissimilar to traditional cigarettes in their design, we believe it helps smokers to break the tobacco habit and many of the associated taboos with smoking.

 

Tobacco Companies Are Having to Adapt

 

The reactions of some of the world's tobacco giants to their declining profits also suggest that these firms themselves believe that e-cigarettes are partly to blame. In July last year, British American Tobacco began to sell their own brand of e-cigarettes online in the UK, with the aim of increasing sales to cover other European countries. Their big aim is to become the leading player in the e-cigarette market - a market that they described at the time as being "small and fragmented".

 

Philip Morris International Inc to Enter E Cig Market?

 

Philip Morris International Inc. - even before the previously mentioned drop in profits - announced at the end of last year that they also planned to enter the e-cigarette market this year, and that they would also be formulating plans for other products to be sold as alternatives to e-cigarettes. The rise in the popularity of vaping has been phenomenal, with thousands of people choosing electronic alternatives as a means of quitting smoking. If the market continues to grow, then the profits of tobacco firms will continue to fall: meaning that they will need to find alternative sources of revenue in order to keep making profits. The e-cigarette market makes sense...but could this make the market overcrowded in the future?

 

What Are Your Thoughs on the Future of Vaping?

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  • Are you glad to see cigarette giants trying to join the vapour cigarette market? 
  • Has traditional smoking had it's day? 
  • Have you made the transition from smoker to vaper? 

 

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