15 Dec

Philip Morris Buys E-Cigarette Maker Nicocigs

Philip Morris has snapped up one of Britain’s fastest-growing electronic cigarette-makers, Nicocigs, as it warned profits from its traditional business will be lower than expected.

Nicocigs, was founded in 2008 and is based in Birmingham, is best known for its Nicolites brand.

Philip Morris, the owner of Marlboro, said the acquisition will give it “immediate access to, and a significant presence in, the growing e-vapour category in the UK market, as well as a strong retail presence”.

Nicocigs has about 27 per cent of the UK’s e-cigarette market, which has an estimated total retail value of $350 million (£206 million). The start-up employs 40 sales staff and distributes to 20,000 stores in Britain.

The purchase price for Nicocigs was undisclosed. The company reveals few financial details but it had amassed shareholder funds of £7.7 million by August 2013, according to Companies House. Nishil Nathwani, 27, is the leading shareholder.

The deal comes as Philip Morris, the world’s biggest tobacco firm, cut its profits forecast by about 4 per cent to between $4.87 and $4.97 per share on poor sales and price-cutting in Australia.

The stock fell nearly 2 per cent in trading on the German stock market. Chief executive André Calantzopoulos warned that the firm faces “significant currency headwinds … and known challenges in Asia”.

Calantzopoulos said the advent of e-cigarettes and other “reduced-risk” products means the tobacco industry is at “the early stage of a transformational process”.

Philip Morris reckons it could make $700 million of profit from “reduced-risk” products if it can reach a target of selling 30 billion units. But it also said it will run up $495 million in redundancy costs in September as it stops production in the Netherlands.

14 Dec

It Looks Like Smoke, But Where is the Fire Over Electronic Cigarettes?

In Western Australia it is legal to sell cigarettes filled with tar and other nasties that contribute to millions of deaths each year, yet electronic cigarettes – even those designed to be used with substances made of oils and organic compounds – are now outlawed.

Isn’t this effectively sending the message that it is OK to smoke but not to pretend to smoke?

The Health Department pursued a case against a man who set up a website to sell e-cigarettes online to make some extra cash – a case that earlier this year saw the man convicted and fined for breaching the Tobacco Products Control Act 2006 (WA).

E-cigarettes cannot legally be marketed to be used in aiding quitting smoking.

It also sent a message that selling e-cigarettes is illegal in WA.

Vincent van Heerend’s conviction surrounded a section of the Act that outlaws selling products designed to resemble cigarettes.

I understand the point of the section of law, I don’t want to see my nieces sucking on toy cigarettes, imitating adult smokers but where is the common sense?

I’d have a different opinion on e-cigarettes plastered with images of tween heartthrobs One Direction on them, or musical e-ciggies that lit up and played Katy Perry’s Firework – but a product that has the possibility to help people quit an unhealthy habit and one that does not appear to be worse than the one it is imitating; at least consider regulating than banning it.

The judge in the test case specifically referred to the vapour from the e-cigarettes resembling smoke from a cigarette.

If this is the issue, I really hope the government pursues some sort of legal case or implements some sort of regulation in regard to another big offender in that same stream.

A couple of mornings earlier in the week, when the temperature got down to about 2 degrees, I walked from the car park to the office exhaling what looked like smoke – at the rate of a chain smoker, mind you – no one should have to deal with that.

My frost-breath is not likely to get me in any trouble any time soon; neither is using e-cigarettes in your own home, as their use is not illegal.

Comprehensive studies into the impact of e-cigarettes on human health have not been done.

While the jury is still out on what health effects e-cigarettes without nicotine in could have, one would assume that vegetable glycerin and propylene glycol could be a slightly healthier option than tobacco and tar.

E-cigarettes cannot legally be marketed to be used in aiding quitting smoking as they have not been assessed by the Therapeutic Goods Authority but anecdotal evidence suggests there could be something there.

I’ve come across a number of people who swear by these things as a way to reduce their nicotine intake or get off smoking completely.

I’ve been told that smokers still physically go through a similar routine that they do when they have a real cigarette, even though they might be taking in less or no nicotine.

The increasing prevalence of e-cigarettes in the community could also make smoking bans a complex issue.

A smoking ban in Perth’s Hay and Murray street malls came in to effect last year and the City of Perth confirmed local law prohibits smoking of any tobacco product in these areas.

A spokeswoman said “e-cigarettes are not a tobacco product and therefore the law does not prohibit their use” but the thing is, some of them are used to smoke tobacco.

However according to the Health Department, the use of e-cigarettes, whether they have nicotine in or not, must comply with laws on smoking in public places.

And even if the city was to allow the use of e-cigarettes without nicotine to be used within the malls, how are those who hand out fines meant to determine whether an e-cigarette has nicotine in it or not? I don’t think breathing in some of the smoke from them would be the healthiest of options.

Oddly enough, when chatting to tobacco store staff I was told that patients from Royal Perth Hospital were actually encouraged to buy e-cigarettes.

A shop worker at a different outlet backed this up, saying some customers had been to RPH or were still patients there and had been advised by staff to get an e-cigarette.

The hospital patients said they used them to aid in quitting their smoking habit altogether, or to use the nicotine-free version so they can use it on the hospital grounds where smoking is banned.

A spokeswoman for RPH said while they could not verify “third party statements or advice provided to patients or visitors, e-cigarettes and other personal vaporisers for delivery of nicotine or other substances are not permitted” at the hospital.

However, if e-cigarettes are useful in helping people quit smoking and if smokers spend their cash on e-cigarettes and not so much on the traditional product, how would the federal government cope without its own addiction to the revenue that Big Tobacco generates?

12 Dec

France Moving to Ban Electric Cigarettes From Public Places, Says Report

France is preparing to place e-cigarettes on the same legal footing as tobacco smoking with draft legislation that aims to ban their use in public places.

The health minister, Marisol Touraine, intends to table a bill on 17 June bringing in anti-smoking measures, Le Figaro reported on Friday.

Not only would France become the first large European country to introduce the ban affecting e-cigarettes, but it would also follow Australia’s example by ordering plain packaging for tobacco products that display graphic pictures of diseases caused by smoking.

The proposed bill is more prohibitive than anti-smoking measures adopted by the European parliament in February. It comes at a time when e-cigarette stores have been springing up across France, which now has almost 1 million users.

The president of the French Tobacconists’ Confederation, Pascal Montredon, told the Guardian that Touraine was being unrealistic by modelling her reforms on “Anglo-Saxon” countries such as Australia and Britain where the cigarette distribution network is completely different from France.

“Tobacconists are fed up with being stigmatised at a time when instead the government should be doing something about the unemployment rate,” he said. The confederation is pressing for e-cigarettes to be sold solely in tobacconist stores, but the proposed legislation fails to address this, he said.

He also said the government needed to bring in measures to curb the parallel cigarette market which accounts for 25% of sales in France.

Other critics said that studies had shown that smokers are more influenced by family and friends in taking up smoking and that very few are influenced by packaging.

Touraine’s office did not confirm the report in Le Figaro, which was published on the eve of “world no tobacco day”. But the ministry said that a “national smoking reduction plan” was under consideration.

A total 73,000 French smokers die every year from tobacco-related cancers.

21 Nov

Western Australia Leads the Country in Banning E-Cigarettes

Western Australia has led the country in banning e-cigarettes, even those which do not contain nicotine.

The World Health Organisation (WHO) will hold a tobacco control meeting in Moscow in October to debate the merits of electronic cigarettes, with some doctors arguing in favour of the product.

While many users claim the e-cigarettes, which allow them to inhale a vapour without the smoke, help them to cut down their tobacco habit, Australian health experts are questioning their value.

Last month the Supreme Court of Western Australia ruled that e-cigarettes that do not contain nicotine still breached the tobacco control act which prohibits any “food, toy or other product” looking like a cigarette or cigar.

Talkback caller to 720 ABC Perth, Mohammed, said he felt that an e-cigarette had helped him with a 27-year chain-smoking habit.

“About three months ago I switched to the e-cigarette and I haven’t touched a normal cigarette since,” he said.

“My breathing has improved, my sleeping has improved. There is no smell on my clothes or car.

“I’m looking forward to giving up. I have tried all those other things like patches and chewing gum, but they never helped. This is the only thing that kept me off cigarettes.”

E-cigarettes not approved as quitting aids

Dr Tarun Weeramanthri, the executive director of public health at the WA Health Department, said that while further research is welcome, there is no evidence to date the e-cigarettes work any better that other nicotine replacements.

“E-cigarettes have been around since the 1960s but despite the claims for them, they are not registered in Australia as a quitting aid,” he said.

“Some people will say the devices helped them quit, but when we look at the evidence, many more people just keep smoking e-cigarettes and normal cigarettes.

“The long term trials haven’t been that conclusive about the effectiveness of e-cigarettes in quitting.”

What has changed, Dr Weeramanthri, is that e-cigarettes have become a bigger business, particularly in Europe, where seven million people use them.

“What has happened in the last couple of years is the big tobacco companies have been buying up e-cigarette companies.

If you look at Europe, where millions of people do use e-cigarettes, they are promoted just like old fashioned cigarettes.

“There is massive advertising and promotion around them and there is evidence that, in some countries, they are being marketed at children.

“That’s what we want to avoid at all costs.”

20 Nov

Big Tobacco Lights Up E-Cigarette Rivalry

Big tobacco is pushing further into the fast-growing electronic cigarette market with Reynolds American’s plan to expand its Vuse brand across the US next week.

Competition for dominance in the $2.5bn US market is heating up, even as regulators and public health groups grapple over the benefits and risks of the battery-powered devices.

Reynolds, the second-largest US tobacco company by sales, began testing Vuse in Colorado last year amid industry-wide moves to step up investment in alternatives to conventional cigarettes. With traditional cigarette sales in the US shrinking an average 3 per cent a year, tobacco companies have come to view e-cigarettes as an opportunity to retain customers.

“The brand’s nationwide expansion is an important step as we position Vuse as the vapour authority, and continue our efforts to lead the transformation of the tobacco industry,” said Stephanie Cordisco, president of Reynolds subsidiary RJ Reynolds Vapor Company. Vuse will be available in stores across the US from June 23.

The fragmented e-cigarette market is just a fraction of the $700bn global tobacco industry, but has drawn attention from big companies facing declining smoking rates. Last week, Japan Tobacco bought the UK’s E-Lites for an undisclosed amount.

Lorillard, the smallest of the big three US tobacco groups, dominates US sales with its Blu Ecigs brand, which it acquired in 2012 for $135m. Last year Reynolds and Marlboro-maker Altria began developing their own electronic products and testing them in various states. Altria, which has about 40 per cent of the US cigarette market, plans to take its MarkTen brand national in the coming months.

“We expect the national expansion of the Big Three into the vapour category . . . should catapult growth of the entire category,” said Wells Fargo analyst Bonnie Herzog, who predicts e-cigarette consumption could surpass traditional smoking in the next decade.

Reynolds and Lorillard are in talks over a potential merger, the Financial Times reported in March. Ms Herzog said the tie-up could accelerate growth in the electronic category.

“We think a combined Reynolds-Lorillard could become a global vapour powerhouse assuming a potential strategic partnership is formed with British American Tobacco (similar to Philip Morris International’s and Altria’s partnership) to expand outside the US,” she said. PMI, which sells the Marlboro brand internationally, and Altria struck a deal in December to license and distribute products including e-cigarettes.

Big tobacco’s moves will probably boost advertising for the devices, including on television, where tobacco ads have been banned since 1971. Marketing spending on e-cigarettes more than tripled to $79m in 2013, according to Kantar Media.

Vuse has been running TV ads in Colorado and Utah, while Blu appears on national cable networks. Njoy, a privately owned e-cigarette maker, ran ads in some markets during the past two Super Bowls.

The US Food and Drug Administration left the door open to more spending when its proposed e-cigarette regulations, unveiled in April, did not include curbs on marketing or advertising.

Reynolds’ expanded bet on the category comes amid a debate over the safety of the products. Advocates argue that the devices, which heat nicotine-laced liquid into a vapour that users inhale, are a less dangerous alternative to smoking because they lack some of the toxins found in cigarette smoke.

But others say there is not enough evidence on the potential health risks and that the products risk “renormalising” smoking after decades of success in stigmatising the habit.

In a letter to the World Health Organisation on Monday, a group of scientists, doctors and academics called on the agency to regulate e-cigarettes in the same way as tobacco, including advertising bans, limits on public smoking and heavy taxes. That followed an earlier appeal from other public health scientists to avoid burdening the emerging category with strict regulations.

“By moving into the e-cigarette market, the tobacco industry is only maintaining its predatory practices and increasing profits,” Monday’s letter said. “Both scientific evidence and best practices are available to support a regulatory framework that will best prevent initiation of use among youth and other non-tobacco users, protect bystanders in public areas from involuntary exposure, regulate marketing, and prohibit unsubstantiated claims.”