Difference between revisions of "E-cigarettes"

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This introductory page explains what e-cigarettes are and briefly summarises the main public health discussions around them. It does not include recent research developments on the safety of e-cigarettes.
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To secure the tobacco industry’s medium to long-term future, in light of growing tobacco regulations and a rapidly shrinking cigarette market, tobacco companies have been looking to develop and market so-called ‘Next Generation Products’ (NGPs), which include [[Snus| snus]], [[E-cigarettes| e-cigarettes]], and Heated Tobacco Products (HTPs).<ref name=EMTWO>Euromonitor International. Global Tobacco: Key Findings Part I- Cigarettes, 22 August 2017</ref><ref>G. Salmon, [https://web.archive.org/web/20170921143627/http://www.hl.co.uk/shares/share-research/201707/british-american-tobacco-drawn-to-the-glo British American Tobacco – Drawn to the glo], Hargreaves Lansdown, 27 July 2017, accessed September 2017</ref>
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This page gives an overview of tobacco companies’ interests in e-cigarettes, also known as electronic cigarettes or ENDS (Electronic Nicotine Delivery Systems), which have been acquired, developed and sold by tobacco companies since 2012. This page links to further pages giving more detailed information about each company’s products, market share and business strategy, including methods used to promote their products around the world.  This page also points to examples of lobbying activity conducted by, and on behalf of, tobacco companies, in order to influence regulation around e-cigarettes.
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Research updates on, and analysis of, the potential health benefits/risks of e-cigarettes are outside the scope of Tobacco Tactics, as are products produced by independent companies without tobacco industry links.  
  
Since the remit of TobaccoTactics.org is to monitor the tobacco industry and those involved with it, we will report on tobacco company developed brands and acquisitions of once independent brands and present information on related issues such as [[E-cigarettes: Marketing| marketing]] and [[E-cigarettes: Marketing Rules| marketing rules]], [[E-cigarettes: Regulation| e-cigarette regulation]] and [[E-cigarettes: Lobbying| lobbying]].
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[[image:BAT_Vuse devices(US).png|400px|thumb|right| Image 1: Vuse E-Cigarettes on sale in the US in 2019 (Image source: Vuse Vapor website)<ref> [https://vusevapor.com/ Vuse Vapor] website, undated, accessed October 2019</ref>)]]
  
* See the list of [http://www.tobaccotactics.org/index.php/Category:E-Cigarettes all pages on e-cigarettes].
 
  
  
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==Tobacco Companies Enter the E-Cigarette Market==
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Tobacco companies began buying existing e-cigarette brands, and developing their own e-cigarette products from 2012. At the time, the global e-cigarette market was highly fragmented and dominated by independent e-cigarette companies, with the ''Financial Times'' estimating in June 2013 that the market was worth $3 billion.<ref name=bond> S. Bond, [https://www.ft.com/content/1bee7f5c-cec6-11e2-ae25-00144feab7de Big Tobacco bets a packet on e-cigarettes], "Financial Times", 6 June 2013, accessed October 2019</ref>  
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Tobacco companies were well placed to take advantage of this fast growing market, as they had established distribution points and the resources to cover the costs of marketing. They were also in a position to meet the financial and legal demands that would likely come with any future [[E-cigarettes: Regulation|regulation]] of e-cigarettes.<ref name=bond/>
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In 2012 and 2013 there was a flurry of tobacco company investment in e-cigarettes, both in the United Kingdom (UK) and in the United States (US), a trend which continued in subsequent years.
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* For a diagrammatic representation of the tobacco industry’s entry into the e-cigarette market see [[E-cigarettes: Industry Timeline]].
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By 2018, [[British American Tobacco]] (BAT), [[Imperial Tobacco]], [[Japan Tobacco International]] (JTI), and to a lesser degree [[Philip Morris|Philip Morris International (PMI)]], all had their own ‘flagship’ e-cigarette brands, and were expanding their global markets. In the same year, [[Altria]] bought a minority stake in US e-cigarette manufacturer [[JUUL Labs]]. Market research company Euromonitor International estimated that the e-cigarette market had grown from US$5 billion in 2013 to more than US$15 billion in 2018.<ref name=EMnew>Euromonitor International, World Market for Cigarettes, Briefing 16 October 2019 (behind paywall)</ref>
  
[[Image:Recharchable-cigarette.jpg|250px|thumb|right| rechargeable e-cigarette ]]
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===British American Tobacco===
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[[E-Cigarettes: British American Tobacco|British American Tobacco (BAT)]] launched ‘Vype’ in August 2013. This e-cigarette was originally developed by [[CN Creative]], a start-up acquired by BAT in December 2012 and later merged into [[Nicoventures]].<ref>British American Tobacco, [https://web.archive.org/web/20190611121111/https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DO935CVT British American Tobacco buys UK based e-cigarette technology company], BAT Press Release, 19 December 2012, accessed June 2019</ref><ref>[https://web.archive.org/web/20190611121634/https://www.manchestereveningnews.co.uk/business/business-news/cn-creative-sold-to-british-american-699308 CN Creative sold to British American Tobacco], ''Manchester Evening News'', 19 December 2012, accessed June 2019</ref> After forming a ‘strategic partnership’ with US tobacco company Reynolds American Inc (RAI) in 2014, BAT acquired the whole company and its ‘Vuse’ range of e-cigarettes in 2017. For more information, see [[RJ Reynolds]].
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BAT went on to acquire more independent e-cigarette companies, and developed a range of products under the Vype and Vuse brands.  As of mid-2019, BAT planned to consolidate the two brands as Vuse.<ref name=BAThalf> British American Tobacco, [https://www.bat.com/group/sites/uk__9d9kcy.nsf/vwPagesWebLive/DO72TJQU Half-year Report for the six months to June 2019], 1 August 2019, accessed August 2019</ref><ref name=halftrans> British American Tobacco, [https://www.bat.com/group/sites/uk__9d9kcy.nsf/vwPagesWebLive/DO72TJQU Half-year Report for the six months to June 2019: Presentation Transcript], 1 August 2019, accessed August 2019</ref>
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* For detailed information on BAT’s e-cigarettes and tactics see [[E-Cigarettes: British American Tobacco]] and [[E-Cigarettes: BAT's Vype and Vuse]].
  
==Tobacco Companies Investing in E-cigarettes==
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===Lorillard===
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[[E-Cigarettes: Lorillard|Lorillard]] was the third largest cigarette manufacturer in the US at the time  it acquired the e-cigarette company ‘blu ecigs’ in 2012.<ref> [https://www.prnewswire.com/news-releases/blu-ecigs-the-leading-electronic-cigarette-company-acquired-by-lorillard-148846505.html blu ecigs the leading electronic cigarette company acquired by Lorillard], ''Cision PR Newswire'', 25 April 2012, accessed October 2019</ref> In 2013, it entered the UK market by taking over ‘Skycig’, a leading independent brand, which was then rebranded as ‘blu ecigs’.<ref> [https://www.prnewswire.com/news-releases/lorillard-inc-acquires-british-based-skycig-expanding-its-electronic-cigarette-business-225948541.html Lorillard, Inc. Acquires British-based SKYCIG, Expanding its Electronic Cigarette Business], ''Cision PR Newswire'', 1 October 2013, accessed October 2019</ref><ref>[https://www.conveniencestore.co.uk/skycig-electronic-cigarettes-to-become-blu-ecigs/355805.article Skycig electronic cigarettes to become Blu ecigs], ''Convenience Store News'', 21 March 2014, accessed October 2019</ref> When [[RJ Reynolds| Reynolds]] acquired [[E-Cigarettes: Lorillard|Lorillard]] in 2014, blu was sold to [[Imperial Tobacco]] to avoid antitrust concerns (see below).<ref name=merced>M.J. De la Merced, C. Bray, [http://dealbook.nytimes.com/2014/07/15/reynolds-american-to-buy-lorillard-for-27-4-billion/?_php=true&_type=blogs&_php=true&_type=blogs&_php=true&_type=blogs&_r=2 To Compete With Altria, Reynolds American Is Buying Lorillard], ''The New York Times'' (behind paywall), 15 July 2014, accessed October 2019</ref><ref>[https://www.theguardian.com/business/2014/jul/15/reynolds-american-lorillard-25bn Imperial Tobacco snaps up US brands Salem and Kool in £4bn deal], ''The Guardian'', 15 July 2014, accessed October 2019</ref>
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* For more information see [[E-Cigarettes: Lorillard]]
  
Tobacco companies were relatively slow to enter the e-cigarette market, but soon made up for lost time using their size and financial firepower to take over a market that was reported by the ''Financial Times'' in June 2013 to be worth $3 billion globally. Historically, the market was highly fragmented and largely dominated by small players but large manufacturers are increasingly entering the market with their own products and are also buying already established brands. Tobacco companies already have established distribution points and the resources to cover the costs of marketing and the demands that will likely come with future [[E-cigarettes: Regulation|regulation]].<ref>S. Bond, [http://www.ft.com/intl/cms/s/0/1bee7f5c-cec6-11e2-ae25-00144feab7de.html?siteedition=uk#axzz30YWnG86s Big Tobacco bets a packet on e-cigarettes], 6 June 2013</ref>
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===Imperial Tobacco===
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[[Imperial Tobacco]]'s subsidiary [[Fontem Ventures]] acquired Dragonite in August 2013, previously owned by Hon Lik, the Chinese pharmacist who claims to have invented the e-cigarette.  In July 2014, as part of [[RJ Reynolds| Reynolds’s]] acquisition of [[E-Cigarettes: Lorillard|Lorillard]], Imperial bought blu.<ref name=merced/> In February 2015, Imperial launched its own e-cigarette ‘Jai’ in Europe.<ref>M. Geller, [https://uk.reuters.com/article/imperial-tobacco-ecigarette/imperial-tobacco-widens-e-cigarette-strategy-with-new-brand-idUKL6N0VE5JD20150204 Imperial Tobacco widens e-cigarette strategy with new brand], ''Reuters'', 4 February 2015, accessed October 2019</ref>   However blu became Imperial’s flagship brand.
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* For more on Imperial’s e-cigarettes see [[Fontem Ventures]]
  
The year 2013 saw a flurry of tobacco company investment in e-cigarettes, both in the UK and in the US. This trend continued into 2014, 2015 and 2016. For a diagrammatic representation of the tobacco industry’s entry into the e-cigarette market see [[media: Ecig investment timeline Sept 2014.pdf|Figure 1 below]].
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===Japan Tobacco International===
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[[E-Cigarettes: Japan Tobacco International|Japan Tobacco International (JTI)]] bought UK e-cigarette brand E-lites in June 2014 from Zandera.<ref> Japan Tobacco International, [https://web.archive.org/web/20190926131955/https://www.jti.com/our-views/newsroom/jti-acquires-leading-e-cigarette-brand-e-lites JTI acquires leading e-cigarette brand E-Lites], JTI press release, undated, accessed September 2019</ref><ref> D. Robinson, Japan Tobacco joins rivals in e-cigarette market with E-lites buy. ''Financial Times'' (behind paywall), 11 June 2014</ref><ref name=ARfourteen> Japan Tobacco Inc., [https://www.jt.com/investors/results/annual_report/pdf/2014/annual.fy2014_E_all.pdf Annual Report FY2014], accessed September 2019</ref> After acquiring US e-cigarette company ‘Logic’  in July 2015,  E-Lites was rebranded as Logic, and this became JTI’s flagship brand.<ref> Japan Tobacco Inc., [https://web.archive.org/web/20190926144705/https://www.jti.com/sites/default/files/press-releases/documents/2015/jt-acquires-logic-leading-independent-us-e-cigarette-company.pdf  JT acquires Logic, the leading independent US e-cigarette company], JT press release, 30 April 2015, accessed September 2019</ref><ref> Japan Tobacco Inc., [https://www.jt.com/investors/results/annual_report/pdf/2016/annual.fy2016_E_all.pdf  Annual Report FY2016], accessed September 2019</ref>
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* For more on JTI’s e-cigarettes and tactics see [[E-Cigarettes: Japan Tobacco International]]
  
* [[E-Cigarettes: British American Tobacco| BAT]] launched ''Vype'' in August 2013, an e-cigarette developed by [[CN Creative]], a start-up acquired by BAT in December 2012.<ref>Companieshouse, [http://wck2.companieshouse.gov.uk//wcframe?name=accessCompanyInfo Nicoventures Holding Ltd], Webcheck, latest entry 21 January 2014, accessed January 2014</ref> In February 2014, BAT announced its Vype e-cigarettes would be sold nationwide at LloydsPharmacy stores.<ref name = speech>Matthew Chapman, [http://www.marketingmagazine.co.uk/article/1281527/boots-sell-puritane-e-cigarettes-imperial-tobacco-subsidiary Boots to sell Puritane e-cigarettes from Imperial Tobacco subsidiary], Matthew Chapman, 19 February 2014, accessed February 2014</ref> In September 2014, BAT was granted a license by the Medicines and Healthcare products Regulatory Agency (MHRA) for ''Voke'', a nicotine inhaler developed by a company called [[Kind Consumer Limited]], a subsequent license was granted in 2016 for a product called ''e-voke'' which is rechargable and uses nicotine cartridges. As of April 2016 neither of these products were available to buy. In 2015, BAT launched ''Vype'' in France, Germany, Italy, Poland and Colombia and acquired ''Ten Motives'' e-cigarette brand in the UK and ''CHIC'' the market-leading e-cigarette business in Poland.<ref>R. Burrows, Speech by BAT's Chairman at its Annual General Meeting. 27 April 2016</ref> In 2015 the company also launched its first [[Heated Tobacco Products| heated tobacco product]] ''glo iFuse'' in Romania.<ref name = speech/>
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===Philip Morris International===
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[[E-Cigarettes: Philip Morris International|Philip Morris International]] (PMI) was the last of the international tobacco companies to enter the e-cigarette market. It announced in December 2013, that it was teaming up with [[Altria]] to market electronic cigarettes and other tobacco products it described as “reduced risk” .<ref name=PMIinvest>Philip Morris International, [https://web.archive.org/web/20190702131029/https://www.pmi.com/media-center/press-releases/press-release-details/?newsId=11541 Philip Morris International Inc. (“PMI”) Hosts Investor Day: E-Vapour Acquisition], PMI Press Release, 26 June 2014, accessed July 2019</ref> PMI gained the right to exclusively sell Altria's e-cigarettes outside the United States. In 2014, PMI acquired UK company Nicocigs, the owner of the ‘Nicolites’ brand.<ref name=PMIinvest/><ref name=PMIvapour> Philip Morris International, [https://web.archive.org/web/20190529161050/https://www.pmi.com/smoke-free-products/mesh-taking-e-cigarettes-further Taking E-Cigarettes Further: E-Vapour Products], PMI website, undated, accessed May 2019</ref> After rebranding ‘Nicolites’ as ‘Nicocig’, PMI went on to develop its own e-cigarette IQOS Mesh, which went on sale in the UK in 2018, alongside IQOS [[Heated Tobacco Products]].<ref name=annual>Philip Morris International, [PMI annual report 2018], 8 March 2019, accessed May 2019</ref> <ref name=monitor>Euromonitor, Philip Morris International Inc: Global Company Profile, 14 August 2018</ref><ref>Philip Morris International, [https://companion.iqos.co.uk/stores Stores], IQOS website, undated, accessed May 2019</ref> However, PMI’s interests in e-cigarettes are relatively minor compared to its interests in HTPs.  
  
* [[E-Cigarettes: Lorillard| Lorillard]], the third largest cigarette manufacturer in the US, acquired the e-cigarette company ''BluCigs'' for a reported $135 million in 2012,<REF>Lorillard, [http://investors.lorillard.com/phoenix.zhtml?c=134955&p=irol-newsArticle&ID=1687024&highlight= Lorillard, Inc. Reports First Quarter 2012 Results and Acquisition of blu ecigs], 25 April, accessed 27 April 2012</REF> and entered the UK market by taking over ''Skycig'', a leading premium brand of electronic cigarettes in Britain, for $48.5 million.<ref>PR Newswire, [http://www.digitaljournal.com/pr/1499769 Lorillard, Inc. Acquires British-based SKYCIG, Expanding its Electronic Cigarette Business. Acquisition Marks First Major Step in Building the Company's Global e-Cigarette Business], 1 October 2013, accessed December 2013</ref> In March 2014, it was announced that, in line with its American brand, Skycig would become ''Blu ecigs'' effective May 2014. The rebranding was backed with a £20 million marketing campaign.<ref>Skycig electronic cigarettes to become Blu ecigs, ''Convenience Store News'', 21 March 2014</ref> When [[RJ Reynolds| Reynolds]] acquired Lorillard for an estimated $27.4 billion on July 15 2014, its Blu line was sold to [[Imperial Tobacco]] to avoid antitrust concerns that allowing Reynolds to own both Vuse and Blu would give it an unfair advantage in the market.<ref>M.J. De la Merced, C. Bray, [http://dealbook.nytimes.com/2014/07/15/reynolds-american-to-buy-lorillard-for-27-4-billion/?_php=true&_type=blogs&_php=true&_type=blogs&_php=true&_type=blogs&_r=2 To Compete With Altria, Reynolds American Is Buying Lorillard], ''The New York Times'', 15 July 2014, accessed July 2014</ref>
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* For more on PMI’s e-cigarettes see [[E-Cigarettes: Philip Morris International]]
  
* [[E-Cigarettes: Japan Tobacco International| Japan Tobacco International (JTI)]] acquired UK e-cigarette brand E-lites in June 2014 from previous owner Zandera.<ref>D. Robinson, Japan Tobacco joins rivals in e-cigarette market with E-lites buy. ''The Financial Times'', 11 June 2014</ref> The company took a minority share in the San Francisco-based startup Ploom in 2011, signing an agreement to commercialise its nicotine ‘vaporisers’ outside the USA. The Ploom is a loose-leaf vaporizer that heats small pods of tobacco, unlike most e-cigarettes that use liquid mixtures of nicotine and synthetic materials.<ref>Brad Stone, [http://www.businessweek.com/articles/2013-11-21/plooms-e-cigarettes-vaporizers-use-real-tobacco Ploom's E-Cigarettes and Vaporizers Use Real Tobacco], ''BloombergBusinessweek'', 21 November 2013, accessed December 2013</ref> In February 2015, JTI acquired the patents and trademarks from Ploom Inc. With this acquisition the company can develop new products and sell Ploom in more markets.<ref>Jiji, [http://www.japantimes.co.jp/news/2015/02/17/business/corporate-business/japan-tobacco-acquires-rights-to-u-s-firm-ploom-brand/#.VPR5EHysV8F Japan Tobacco acquires rights to US firm Ploom brand],''The Japan Times'', 17 February 2015, accessed March 2015</ref>
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===Altria===
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[[E-Cigarettes: Altria|Altria]] launched ‘MarkTen’, produced by its subsidiary Nu Mark,  in the US in 2014.<ref>[https://web.archive.org/web/20190228145243/https://www.cnbc.com/id/100806458 Marlboro Maker Altria is Jumping Into E-Cigarettes], ''CNBC News'', 11 June 2013, accessed January 2019</ref><ref name=Modi>N. Modi, US Tobacco 2014 Playbook, RBC Capital Markets, 12 December 2013 (behind paywall)</ref><ref> M. Felberbaum, [https://web.archive.org/web/20190501084035/https://www.canadianbusiness.com/business-news/marlboro-maker-altria-group-to-expand-markten-electronic-cigarette-nationally-in-2nd-quarter/ Marlboro maker Altria Group to expand MarkTen electronic cigarette nationally in 2nd quarter], ''The Associated Press'', CanadaBusiness.com, 19 February 2014, accessed January 2019</ref> Altria acquired independent US e-cigarette company Green Smoke in 2014.<ref>Altria, Altria Group Inc. 2014 Annual Report</ref><ref>Altria Group, [https://web.archive.org/web/20190501084258/https://www.businesswire.com/news/home/20140203005640/en/Altria-Announces-Agreement-Acquire-E-Vapor-Business-Green  Altria Announces Agreement to Acquire E-Vapor Business of Green Smoke Inc.], ''BusinessWire'', 3 February 2014, accessed January 2019</ref> Both brands were discontinued in December 2018 and Altria announced that it had bought a 35% stake in market leader [[JUUL Labs]].
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* For more on Altria’s e-cigarette interests see [[E-Cigarettes: Altria]]  and [[JUUL Labs]].
  
* [[Imperial Tobacco]]'s member company [[Fontem Ventures]] acquired Dragonite in August 2013, previously owned by Hon Lik, the Chinese pharmacist who claims he invented the e-cigarette. In early 2014, Imperial presented its own e-cigarette called Puritane and announced an exclusive deal with the [[E-cigarettes: At The Pharmacy| Boots pharmacy chain]] to sell the new brand.<ref>Matthew Chapman, [http://www.marketingmagazine.co.uk/article/1281527/boots-sell-puritane-e-cigarettes-imperial-tobacco-subsidiary Boots to sell Puritane e-cigarettes from Imperial Tobacco subsidiary], ''Marketing Magazine'', 19 February 2014, accessed February 2014</ref> In July 2014, as part of the merger between [[RJ Reynolds| Reynolds]] and Lorillard, Imperial purchased the Blu e-cigs line.<ref>M.J. De la Merced, C. Bray, [http://dealbook.nytimes.com/2014/07/15/reynolds-american-to-buy-lorillard-for-27-4-billion/?_php=true&_type=blogs&_php=true&_type=blogs&_php=true&_type=blogs&_r=2 To Compete With Altria, Reynolds American Is Buying Lorillard], ''The New York Times'', 15 July 2014, accessed July 2014</ref> When speaking of the company's new acquisition, Alison Cooper, Imperial Tobacco’s chief executive said, "This is a great opportunity to transform our U.S. business and secure a significant presence in the world’s largest accessible profit pool." In February 2015, Imperial announced the launch of ''Jai'' its new e-cigarette in both France and Italy.<ref>M. Geller, [http://www.reuters.com/article/2015/02/04/imperial-tobacco-ecigarette-idUSL6N0VE5JD20150204 Imperial Tobacco widens e-cigarette strategy with new brand], ''Reuters'', 4 February 2015, accessed March 2015</ref>
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==Patent Claims==
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In March 2014, Imperial Tobacco’s [[Fontem Ventures]] launched legal proceedings over patents in California against nine of its US rivals including the top three [[E-Cigarettes: Lorillard| Lorillard]]'s Blu Ecigs, NJOY and Logic, and BAT’s [[Nicoventures]]. According to the ''Financial Times'' the lawsuit showed that "big tobacco" was becoming increasingly aggressive in the battle for the fast-growing e-cigarette market: "patents are expected to play an increasingly crucial role as big tobacco companies vie with smaller rivals to gain market share."<ref>D. Robinson, S. Bond, [https://www.ft.com/content/0d5e20ec-a877-11e3-a946-00144feab7de Imperial fires up e-cigarette legal battle], "Financial Times", 10 March 2014, accessed October 2019 (behind paywall) </ref><ref> Schumpeter, [https://www.economist.com/schumpeter/2014/03/17/a-case-of-the-vapers A case of the vapers], "The Economist", 17 March 2014, accessed October 2019</ref> Fontem Ventures also instigated lawsuits against [[E-Cigarettes: Altria|Altria]] subsidiary Nu Mark, and [[RJ Reynolds]] (BAT). Most of these cases had been settled out of court by 2017.<ref>S. Rosselat, [https://web.archive.org/save/https://www.vapingpost.com/2016/04/05/fontem-ventures-gives-a-patent-battle-to-the-vape-industry/ Fontem Ventures gives a patent battle to the vape industry], Vaping Post blog, 5 April 2016, accessed October 2019</ref><ref> M. Bultman, [https://web.archive.org/web/20191028124948/http://www.tobaccotoday.info/2017/01/12/fontem-nu-mark-end-e-cig-patent-fight-with-settlement/ Fontem, Nu Mark End E-Cig Patent Fight With Settlement], "TobaccoToday", 12 January 2017, accessed October 2019</ref><ref> [https://www.tobaccoasia.com/product-news/big-tobacco-reaches-settlement/ Big Tobacco Reaches Settlement], "Tobacco Asia", 14 March 2017, accessed October 2019</ref><ref> [https://news.bloomberglaw.com/ip-law/imperials-fontem-reynolds-settle-vaping-patent-fights-1 Imperial’s Fontem, Reynolds Settle Vaping-Patent Fights], "Bloomberg Law", 2 October 2018, accessed October 2019</ref>
* [[E-Cigarettes: Philip Morris International| Philip Morris International (PMI)]] announced in December 2013 that it was teaming up with [[Altria]] to market electronic cigarettes and other "reduced risk" tobacco products. PMI gained the right to exclusively sell Altria's e-cigarettes outside the United States. On 26 June 2014, PMI announced that it had acquired UK-based Nicocigs, the owner of the Nicolites brand, saying it would provide the company “an immediate entry into the UK” and will  “pave the way” for faster and broader UK market entry for their other e-cigarette products.<ref> Andre Calantzopoulos, Philip Morris International Investor Day 26 June 2014, accessed June 2014</ref><ref>Louise Banham, [http://www.betterretailing.com/philip-morris-nicolites/ Philip Morris snaps up Nicolites], in BetterRetailing.com 26 June 2014, accessed June 2014</ref>  
 
  
* [[E-Cigarettes: Altria| Altria]], which includes Philip Morris USA and controls about one half of all cartons sold in America, is testing its e-cigarette “MarkTen” in Indiana and Arizona. The plan was to bring an e-cigarette to the market mid-2013,<ref>Mike Esterl and John Kell, [http://online.wsj.com/article/SB10001424127887323335404578444593773925274.html Altri to Enter E-Cigarette Market], ''Wall Street Journal'', 25 April 2013, accessed 2 May 2013</ref> but feedback has been mixed. One industry analyst wrote, “MarkTen products did not start moving until Altria blast e-mailed Indiana smokers with a $2 MarkTen coupon.” The national roll-out occurred in 2014.
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E-cigarette company [[JUUL Labs]] filed multiple complaints of patent infringement in the US courts, in October and November 2018, mainly against companies in China and Uruguay.<ref> M. Geller, [https://uk.reuters.com/article/uk-juul-ecigarettes-patents/e-cigarette-maker-juul-files-complaints-against-copycat-products-idUKKCN1ME2OY E-cigarette maker Juul files complaints against “copycat products”], Reuters, 4 October 2018, accessed October 2019</ref><ref> C. Yasiejko, [https://www.bloomberg.com/news/articles/2018-11-20/juul-lobs-second-round-of-lawsuits-against-e-cigarette-copycats Juul Lobs Second Round of Suits Against E-Cigarette Rivals], Bloomberg, 20 November 2018, accessed October 2019</ref> In December 2018, [[Altria]] acquired a 35% share in JUUL Labs, who subsequently dropped the infringement claims in April 2019.<ref> [https://news.bloomberglaw.com/ip-law/juul-labs-drops-patent-infringement-case-against-competitors Juul Labs Drops Patent Infringement Case Against Competitors], "Bloomberg Law", 18 April 2019, accessed October 2019</ref>
  
* [[RJ Reynolds| RJ Reynolds American]] was reported to be test marketing an e-cigarette called “Vuse” through its subsidiary RJ Reynolds Vapor Company in April 2013.<ref>Reynolds American Inc, [http://www.reynoldsamerican.com/secfiling.cfm?filingID=1193125-13-50521 Reynolds American Quarterly Report], United States Securities and Exchange Commission, 23 April 2013, accessed 2 May 2013</ref> Vuse is now available for purchase in the US. <ref>, [https://vusevapor.com/modules/Security/Landing.aspx Vuse Vapour Homepage], accessed October 2014</ref>
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==A Growing Market And Falling Shares==
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According to Euromonitor International, between 2014 and 2018 the value of the global e-cigarette market more than doubled from US$6.8 billion to over US$15.6 billion.<ref name=EMnew/><ref name=eurmarket> Euromonitor International: UK e-cigarette market value, 2014-2018, accessed September 2019</ref> The biggest markets by far remained the US (which grew from US$2.6 billion to US$6.8 billion ) and Western Europe (US$2.3 billion to US$5.2 billion ), with the UK the biggest single market in Europe.  The value of the market in the Asia-Pacific region, while a quarter of the size of the US market, nearly doubled to US$1.4 billion. Growth was also rapid in some Eastern European countries, notably Hungary, the Czech Republic and Poland. Russia remained a sizeable market (although mainly for Chinese products). Markets in Latin America and Australasia, although significantly smaller, also doubled in value, while the market in the Middle East grew more slowly.
  
=== Patent Claim ===
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Market size is clearly affected by national rules and [[https://ggtc.world/2019/06/26/e-cigarette-ban-regulation-global-status-as-of-june-2019/|regulations governing the sale of e-cigarette products]].  However, the existence of regulation restricting or banning the sale of e-cigarettes does not necessarily mean that tobacco company products are not available to purchase in a particular country (see for example [[E-Cigarettes: British American Tobacco|BAT’s sales of Vype in Mexico]]).
In March 2014, the electronic cigarette arm of Imperial Tobacco, [[Fontem Ventures]] launched legal proceedings over patents in California against nine of its US rivals including the top three [[E-Cigarettes: Lorillard| Lorillard]]'s Blu Ecigs, NJOY and Logic. According to the ''Financial Times'' the lawsuit shows that "big tobacco" is becoming increasingly aggressive in the battle for the fast-growing e-cigarette market: "patents are expected to play an increasingly crucial role as big tobacco companies vie with smaller rivals to gain market share." <ref>Duncan Robinson and Shannon Bond, [http://www.ft.com/intl/cms/s/0/0d5e20ec-a877-11e3-a946-00144feab7de.html#ixzz2veAUR6kYImperial fires up e-cigarette legal battle], 10 march 2014, accessed May 2014</ref>
 
  
|}
+
In 2018, Euromonitor International put BAT’s share of the global e-cigarette market (by value) at 9.4% (in 2016, prior to its acquisition of RAI, it had been 3.4%).  Imperial, JTI and PMI’s market share had all fallen since 2014 (see image 3).<ref name=EMvapour> Euromonitor International, Vapour Products: World, accessed September 2019</ref> PMI’s overall share was the lowest (0.3%) in 2018 with IQOS Mesh yet to register.<ref name=EMbrand> Euromonitor International: UK e-cigarette market share by retail value, 2014-2018, accessed September 2019</ref><ref name=EMmonitor>Euromonitor, Philip Morris International Inc: Global Company Profile, 14 August 2018</ref> 
  
<!----------------------------------Begin right column------------------------------->
+
{| class="wikitable"
|style="width:49%; border:1px solid #c9d7f0; vertical-align:top"|
+
|-
{| width="100%" cellpadding="2" cellspacing="5" style="vertical-align:top;background:#F5F5F5;"
+
! scope="col" width="150px" | Company
 +
! scope="col" width="50px" | 2014
 +
! scope="col" width="50px" | 2015
 +
! scope="col" width="50px" |  2016
 +
! scope="col" width="50px" |  2017
 +
! scope="col" width="50px" |  2018
 +
|-
 +
|[[E-Cigarettes: British American Tobacco|BAT (including RAI from 2017)]]
 +
|1.6
 +
|2.9
 +
|3.4
 +
|11.0
 +
|9.4
 +
|-
 +
|RAI
 +
|9.6
 +
|6.3
 +
|6.5
 +
|
 +
|
 +
|-
 +
|[[Fontem Ventures|Imperial Tobacco]]
 +
|0.3
 +
|4.7
 +
|3.9
 +
|3.7
 +
|3.2
 +
|-
 +
|JTI
 +
|4.1
 +
|3.3
 +
|2.8
 +
|3.1
 +
|2.8
 +
|-
 +
|[[E-Cigarettes: Altria]]
 +
|1.1
 +
|1.5
 +
|1.8
 +
|2.5
 +
|2.4
 +
|-
 +
|[[E-Cigarettes: Philip Morris International|PMI ]]
 +
|1.3
 +
|0.9
 +
|0.6
 +
|0.4
 +
|0.3
 
|-
 
|-
! <h2 style="margin:0; background: #00649B; font-size:120%; font-weight:bold; border:1px solid #7ba06d; text-align:left; color:#FFFFFF; padding:0.2em 0.4em;">What is an E-cigarette?</h2>
+
|Independent companies
 +
|82.0
 +
|80.4
 +
|80.4
 +
|75.3
 +
|63.3
 +
|-
 +
|[[JUUL Labs]]
 +
|
 +
|
 +
|0.6
 +
|4.0
 +
|18.6
 
|-
 
|-
|style="color:#000;|
 
  
E-cigarettes work by vaporising nicotine liquid. They consist of a battery, a cartridge (disposable, replaceable or refillable) with e-liquids and an atomiser which heats the cartridge ingredients to create a vapour that is inhaled by the consumer (‘vaper’). They do not contain tobacco and there is no combustion, no smoke and no odour.
 
E-cigarettes are used like cigarettes: when the user draws on an e-cigarette, visible vapour is produced and an LED may light up to mimic the glow of a real cigarette. Vapers report that the sensation (‘nicotine hit’) is similar to that of using tobacco cigarettes.<ref name = EUlib>Library of the European Parliament, [http://www.europarl.europa.eu/eplibrary/Electronic-cigarettes.pdf Electronic Cigarettes], Library Briefing, 27 March 2013, accessed January 2013</ref>
 
As described by the US Food and Drugs Administration (FDA), e-cigarettes “turn chemicals, including highly addictive nicotine, into an aerosol that is inhaled by the user.”<ref name = FDA> FDA, [http://www.fda.gov/newsevents/publichealthfocus/ucm172906.htm Regulation of e-Cigarettes], no date, accessed January 2014</ref>
 
 
'''''The Ingredients'''''
 
 
The liquids used in most e-cigarettes are often sold in a bottle or in pre-filled disposable cartridges, and may include nicotine, water, glycerol, propylene glycol and flavourings. Most "contain large concentrations of propylene glycol, which is a known irritant when inhaled. The testing of some of these products also suggests the presence of other toxic chemicals, aside from nicotine."<ref name = EUlib/> According to a June 2013 EU briefing, these e-liquids contain nicotine concentrations between 0 and 48 mg/ml, more typically 18 mg/ml,<ref name = EUlib/>, while a ''Note'' by the UK Parliamentary Office of Science and Technology (POST) from January 2014 estimated the nicotine content to be "typically up to 36mg/ml”.<ref name = post> POSTnote, [http://www.parliament.uk/briefing-papers/POST-PN-455/electronic-cigarettes Electronic Cigarettes], Number 455 January 2014, accessed January 2014</ref>
 
 
More than 200 flavours are available. While some e-cigarette makers are limiting offerings to tobacco and menthol flavours, others are selling bubble gum, cherry or strawberry, even though the latter are prohibited for use in regular cigarettes because of concerns that such flavours appeal to children.
 
 
'''''The Difference Between an E-cigarette and a Vapouriser'''''
 
 
E-cigarettes differ widely but the ''POST Note'' outlines three characteristics of e-cigarettes: effectiveness at nicotine delivery, resemblance to tobacco cigarettes and the potential to customize. The ''POST note'' also distinguishes two types of e-cigarettes: 
 
:* '''Cig-a-Likes''' (first generation products) resemble tobacco cigarettes. They generally deliver low concentrations of nicotine to the user (though nicotine delivery efficiency is improving). They can be disposable. Availability is widespread. Retailers display the products either on tobacco counters or with pharmacy products.
 
:* '''Bespoke products''' (second or third generation products) do not look like tobacco cigarettes. Some can be personalised by mixing components, allowing user control of battery size, nicotine concentration and flavour. They are a niche market often used by experienced vapers, purchased online or in specialised shops.<ref name = post/>
 
 
Many e-cigarettes are manufactured to look like conventional cigarettes, cigars, or pipes, but some resemble everyday items such as pens and USB memory sticks. Some models are even disposable, some are designed to be refilled with cartridges and some are also rechargeable, for instance via USB.<ref name = FDA/>
 
 
Personal vaporizers are something completely different, though. Mechanical PVs or mechanical "mods", often called "mechs," are devices without electronic components, electrical wires and battery protection. They are activated by spring-loaded or opposing magnetic mechanical switches, hence their name. They come in many personalised models, mostly sold in specialised 'vape shops'.<ref>Wikipedia, [http://en.wikipedia.org/wiki/Electronic_cigarette, Electronic Cigarettes], accessed January 2014</ref>
 
 
 
[[Image:Vaporizers-by-iolite.jpg|250px|thumb|center|One of the many kinds of vapourizers (Iolite)]]
 
 
 
'''''Further Reading'''''
 
 
* ASH, [http://ash.org.uk/files/documents/ASH_715.pdf Electronic cigarettes], ASH Briefing, January 2014.
 
* ASH Scotland [http://www.ashscotland.org.uk/media/5749/E-cigarettes%20briefing%20July%202013.pdf Electronic nicotine delivery systems (ENDS)/E-cigarettes], July 2013.
 
* Parliamentary Briefing POSTnote, [http://www.parliament.uk/briefing.../POST-PN-455.pdf‎ Electronic Cigarettes], January 2014.
 
* Library of the European Parliament, [http://www.europarl.europa.eu/eplibrary/Electronic-cigarettes.pdf Electronic Cigarettes], Briefing, 27 March 2013.
 
 
|-
 
|}
 
 
|}
 
|}
<!---------------------------End of split tables ------------------------------------>
+
'''Table 1: Tobacco Company % Shares of the Global Market, by value, 2014-2018 (source Euromonitor International, 2019)'''<ref name=EMvapour/>
  
[[Image:E-cig timeline.PNG|800px|thumb|centre|Figure 1. Tobacco industry investment in non-cigarette nicotine products]]
 
  
==Use of E-cigarettes in the UK ==
+
Between 2015 and 2018 tobacco companies lost a significant slice of the market to [[JUUL Labs]], whose global share rose from 4% to 18.6% (see Table 1).<ref name=EMvapour/><ref name=EMbrand/> In the US the rise of Juul was even more marked, with the company gaining share from both independent e-cigarette companies, and tobacco companies. Imperial and JTI both lost around half of their share between 2016 and 2018. Even after its acquisition of RAI in 2017, BAT’s share in the US fell by more than four percentage points in a year.<ref name=EMvapour/><ref name=EMbrand/> 
  
According to a series of surveys involving more than 12,000 adult smokers, the number of people who use electronic cigarettes in the UK has tripled over the past two years to 2.1 million.<ref>Ash, [http://www.ash.org.uk/files/documents/ASH_891.pdf Use of electronic cigarettes in Great Britain], Factsheet, April 2014, accessed April 2014</ref>
+
Overall independent e-cigarette companies maintained the largest share of the global market, although this fell from over 80% in 2014 to just over 63% in 2018.<ref name=EMvapour/><ref name=EMbrand/>
Among those currently using electronic cigarettes, around 700,000 are ex-smokers and 1.3 million are using them alongside normal cigarettes or tobacco. The survey revealed that use of e-cigarettes among people who have never smoked remains small, at only 1%.
 
  
Current smokers using e-cigarettes regularly have risen from 2.7% in 2010 to 17.7% in 2014. When asked why they used electronic cigarettes, 71% of the ex-smokers said they wanted help giving up smoking. Among current smokers, 48% replied they wanted to reduce the amount of tobacco they smoked and 37% said they used e-cigarettes to save money.<ref>BBC News, [http://www.bbc.com/news/health-27161965 E-cigarette users in UK have 'tripled' since 2010], 27 April 2014, accessed April 2014</ref>
+
[[image:Vype_LilyAllen_PRWeek.PNG|400px|thumb|right| Image 2: UK Singer Lily Allen paid by BAT to promote Vype on social media, triggering complaints to the UK Advertising Standards Authority (Image source: PR Week)<ref name=hickman> A. Hickman, S. Delahunty, [https://web.archive.org/web/20191031125652/https://www.prweek.com/article/1583293/big-tobacco-confirm-earned-social-media-tactics-ad-authorities-investigateBig Tobacco confirm ‘earned media’ tactics as ad authorities investigate ], "PR Week", 30 April, 2019, accessed October 2019</ref>)]]
  
These series of surveys commissioned by Action on Smoking and Health (ASH) and those conducted by the Smoking Toolkit Study are the only statistics available on the use of e-cigarettes in the UK. Even the Medicines and Healthcare Products Regulatory Agency (MRHA) of the Department of Health refers to a 2012 report by ASH<ref>Working group on Niotine Continging Products, Commission on Human Medicines, [http://www.mhra.gov.uk/home/groups/comms-ic/documents/websiteresources/con286845.pdf Current use of electronic cigarettes], MHRA, 2013, accessed February 2014</ref> and to statistics delivered by “Smoking in England”, which is a portal providing key information about smoking and smoking cessation patterns in England based on surveys by the Smoking Toolkit Study.<ref>funded by the DoH and Cancer Research UK. See: Smoking in England,[http://www.smokinginengland.info/about/ About page], no date, accessed January 2014</ref>
+
==Marketing Strategies==
 +
Tobacco companies use a wide range of marketing tactics to promote their products, ranging from traditional media advertising, price promotions and point of sale displays. However, as e-cigarette advertising has become more restricted companies have been forced to become more creative. Pop-up stores and events, music festivals and collaborations with artists and designers have all been used to help market e-cigarettes, with widespread online promotion via social media, paid celebrities and influencers.<ref name=hickman/><ref> M. Nedelman, R. Selig, A. Azad, [https://web.archive.org/web/20191031152355/https://edition.cnn.com/2018/12/17/health/juul-social-media-influencers/index.html #Juul: How social media hyped nicotine for a new generation], ''CNN'', 19 December 2018, accessed October 2019</ref> This has led to the companies being criticised for targeting young people, rather than adult smokers looking to quit.<ref name=hickman/><ref> Action on Smoking and Health, [https://web.archive.org/web/20190816150941/https://ash.org.uk/media-and-news/blog/bat-asa-e-cigarettes/ BAT under investigation by the ASA for promoting e-cigs to young people on social media], ASH blog, 29 April 2019, accessed August 2019</ref><ref> J. Hoek, B. Freeman, [https://tobaccocontrol.bmj.com/content/early/2019/07/16/tobaccocontrol-2019-054967 BAT(NZ) draws on cigarette marketing tactics to launch Vype in New Zealand], ''Tobacco Control'': Industry Watch, 17 July 2019</ref><ref> M. Wilson, [https://web.archive.org/web/20191017134713/https://www.fastcompany.com/90321428/this-vape-company-invented-a-whole-new-kind-of-dark-pattern This vape company invented a whole new kind of dark pattern], ''Fast Company'', 20 March 2019, accessed October 2019</ref>
  
The UK Parliamentary Office of Science and Technology (POST) referred to the updated January 2014 ASH briefing when stating that the use of e-cigarettes (‘vaping’) is widespread in the UK: 
+
The same criticism has been levelled at [[JUUL Labs]].  In September 2018, the US Food and Drug Administration (FDA) wrote to JUUL Labs, [[Fontem Ventures]] (Imperial), [[Altria]], [[RJ Reynolds| Reynolds American Inc. (RAI)]] and [[JTI]]), giving the companies 60 days to provide a written plan to “address the rate of youth use” of their products.<ref> Food and Drug Administration, [https://www.fda.gov/tobacco-products/rules-regulations-and-guidance/ctp-letters-industry Letters to Manufacturers Regarding Plans to Address Youth Access and Use], FDA website, 12 September 2018, accessed October 2019</ref>
:* an estimated 1.3m people use e-cigarettes
 
:* 35% of tobacco smokers have tried an e-cigarette and 11% currently use them
 
:* use is confined almost entirely to current or ex-smokers
 
:* among children, e-cigarette use appears confined to older children and those who have already used tobacco
 
:* 30-38% of those who try e-cigarettes use them again, but only 14% become daily users.  
 
:* Awareness of e-cigarettes is highest among younger white smokers with higher incomes and there is no gender difference.
 
:* Less data are available on how e-cigarettes are used (quitting or partial substitution) and duration of use.<ref name = post/><ref name = ASH>ASH, [http://ash.org.uk/files/documents/ASH_715.pdf Electronic cigarettes], ASH Briefing, January 2014, accessed January 2014</ref>  
 
  
The use of e-cigarettes is changing very fast. In early 2014, ASH estimated that perhaps as many as 400,000 people have replaced smoking with e-cigarette use. These numbers have gone up significantly in the past few years. In late 2012, Martin Dockrell et al concluded that e-cigarettes "remain something of a niche product." Although awareness had increased, the research had found that the proportion of smokers who were aware of e-cigarettes but had not tried them remained at just more than 50%.<ref> Martin Dockrell, Rory Morrison, Linda Bauld, Ann McNeill, [http://ntr.oxfordjournals.org/content/15/10/1737.short E-Cigarettes: Prevalence and Attitudes in Great Britain], ''Nicotine & Tobacco Research'', Volume 15, Number 10 (October 2013) 1737–1744, accessed February 2014</ref> However, according to more recent surveys, this is changing rapidly:
+
==Lobbying Regulators==
:* While 3% of smokers reported using e-cigarettes in 2010, this proportion increased to 7% in 2012 and 11% in 2013.
+
Article 5.3 of the World Health Organization [[Framework Convention on Tobacco Control]] (WHO FCTC), designed to protect public health policies from commercial and other vested interests, applies to the whole tobacco industry irrespective of the type of products they are attempting to sell.  Tobacco companies are spending considerable amounts of time, effort and money lobbying decision-makers concerned with laws and regulations around e-cigarettes.<ref>S. Peeters, A. Gilmore, [http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1001506 Transnational tobacco company interests in smokeless tobacco in Europe: Analysis of internal industry documents and contemporary industry materials], ''PLoS Medicine'', 2013,10(9):1001506</ref>  
:* The number of people reported having tried e-cigarettes went from 9% in 2010 to 22% in 2012 and 35% in 2013.<ref name = ASH/>
 
  
Statistics from [http://www.smokinginengland.info| SmokinginEngland.info] confirmed the increase of e-cigarette use by smokers and people who intend to stop. Based on data collected during monthly household surveys (which involved a new representative sample of approximtely 1800 respondents each month), researchers estimated that between May 2011 and November 2013, the percentage of smokers using e-cigarettes rose from 2% to 15%. Similarly, the percentage of people using e-cigarettes in an attempt to quit smoking increased from about 1% to 12% in the same period.<ref> The surveys have been running since November 2006 and have accumulated more than 150,000 respondents of whom more than 35,000 are ‘last-year smokers’. Robert West and Jamie Brown , [http://tinyurl.com/l44ztlb Latest trends on smoking in England], Smoking Toolkit Study, 27 January 2014, accessed January 2014</ref> Dr Jamie Brown of Smoking in England concluded: "There are 8.5 million smokers in England (42.5 million people in England and about 20% smoking), and if 16% of all smokers use e-cigarretes, that equals 1.36 million current users."<ref>Jamie Brown, Email correspondence, 2 February 2014</ref>
+
As with [[Lobbying Decision Makers|lobbying on tobacco products]], tactics include:
  
== A “Threat and Opportunity” for the Tobacco Industry==
+
* Direct lobbying of politicians and policy makers in formal meetings.<ref>L. Wells, [https://web.archive.org/web/20190401144738/https://www.talkingretail.com/news/industry-news/british-american-tobacco-tackles-youth-vaping-26-02-2019/ British American Tobacco tackles youth vaping], ''Talking Retail'', 26 February 2019, accessed March 2019</ref><ref> P. Hutcheon, [https://www.heraldscotland.com/news/16266038.lobbying-register-reveals-which-multi-national-giants-have-been-meeting-msps/ Lobbying register reveals which multi-national giants have been meeting MSPs], ''Herald on Sunday'', 3 June 2018, accessed October 2019</ref>
E-cigarettes are the “biggest potential threat and opportunity the industry has had for a long time,” according to James Bushnell, a tobacco analyst. “The only thing that’s fundamentally changed in cigarettes since the 1960s is that they put a filter in.”<ref name = BB>Albertina Torsoli and Makiko Kitamura, [http://www.bloomberg.com/news/2013-06-13/future-of-e-cigarettes-in-question-on-european-crackdown.html Future of E-Cigarettes in Question on European Crackdown], 14 June 2013, accessed December 2014</ref>  
+
* Submissions to government consultations.<ref> British American Tobacco, [http://www.parliament.wa.gov.au/Parliament/commit.nsf/luInquiryPublicSubmissions/A38580C3A53098614825832800084689/$file/cs.ccs.078.181005.sub.British%20American%20Tobacco%20Australia.pdf Submission by British American Tobacco Australia in respect of the Select Committee on Personal Choice and Community Safety - Legislative Council of Western Australia], October 2018, accessed September 2019</ref><ref name=Smyth> J. Smyth, [https://www.ft.com/content/84636130-5442-11e9-91f9-b6515a54c5b1 Tobacco groups seek to overturn Australia’s vaping ban], ''Financial Times'' 1 April 2019, accessed September 2019</ref><ref> Japan Tobacco International, [https://www.jti.com/sites/default/files/key-regulatory-submissions-documents/submissions/aus-final/2019-03-15-australia-plain-packaging-review-of-tobacco-control-legislation-jti-response.pdf Submission to the Consultation on the Review of Tobacco Control Legislation in Australia], 15 March 2019, accessed September 2019</ref><ref> Z. Small, [https://web.archive.org/web/20191021142456/https://www.newshub.co.nz/home/politics/2019/08/i-m-confused-mps-question-tobacco-firm-imperial-brands-anti-smoking-goals.html ‘I’m confused’: MPs question tobacco firm Imperial Brands’ anti-smoking motivation], Newshub.co.nz, 28 August 2019, accessed October 2019</ref>
Bonnie Herzog, a tobacco market analyst at Wells Fargo predicted that demand for the smokeless devices in the US and Europe would surpass that of traditional cigarettes in the next decade. Although not everybody shares this optimism, the e-cigarette business is expanding quickly nonetheless.  
+
* Meetings and discussions at political and ‘social’ events (sometimes sponsored by tobacco companies).<ref> Dodds Events (@DodsEvents), Tweet: “At #SNP Conference…Join us in Meeting Room 3 to discuss Where Next for Vaping in Scotland”?, Twitter, 15 October 2019 12:35</ref>
The market for e-cigarettes has grown from several thousand users in 2006 to several million worldwide, and users now have more than 200 brands to choose from. E-cigarette sales were projected to double to $2 billion in 2013 compared to the previous year, and top $10 billion by 2017.<ref name = BB/>
+
* Employing professional lobbyists.<ref> US Government, [https://soprweb.senate.gov/index.cfm?event=getFilingDetails&filingID=A2394CFC-8B04-48D5-AF72-030D529438C4&filingTypeID=60 Lobbying Report], RAI Lobbying Disclosure, 22 July 2019, accessed September 2019</ref>
 +
* Setting up and joining existing trade associations, to lobby on companies’ behalf.<ref name=knapton> S. Knapton, [https://web.archive.org/web/20190401105608/https://www.telegraph.co.uk/science/2018/08/17/mps-behind-controversial-e-cigarette-criticised-vaping-lobby/ MPs behind controversial e-cigarette report criticised vaping lobby], ''The Telegraph'', 17 August 2018, accessed March 2019</ref><ref name=weeks> C. Weeks, [https://web.archive.org/web/20191021150553/https://www.theglobeandmail.com/canada/article-e-cigarette-companies-join-forces-to-lobby-against-proposed-vaping/ E-cigarette companies join forces to lobby against proposed vaping regulations], ''The Globe and Mail'', 14 October 2019, accessed October 2019</ref> See also [[UK Vaping Industry Association (UKVIA)]].
 +
* [[Astroturfing|‘Astroturfing’]] – setting up fake grass roots campaigns.<ref name=Politico> K. Jennings, [https://web.archive.org/save/https://www.politico.eu/article/big-tobacco-bankrolls-petition-influence-eu-vaping-rules/ Big Tobacco’s push for Big Vape], "Politico", 26 February 2019, accessed April 2019</ref>
  
Meanwhile, the tobacco industry reported that in 2013, the total volume of real cigarette sales was down by 4.5%, driven by volume displacement to e-cigarettes. Annual overall growth was 20%, but with 31% more shelf space being devoted to e-cigarettes.<ref name = BH>Bonnie Herzog, "Tobacco Talk" - Q4 U.S. Retailer Survey – E-Vapor Products Continue to Take Combustible Cig Share Wells Fargo, 22 January 2014</ref>
+
==Can E-Cigarettes Help Advance Public Health?==
 +
Globally, there is an ongoing debate about whether e-cigarettes are a threat or an opportunity to public health. Some public health experts believe that e-cigarettes are an essential alternative to smoking tobacco that can help smokers quit. Others argue that e-cigarettes could be a route into nicotine addiction and point out that their long-term safety has not yet been proven. There are also those that believe that e-cigarettes may offer public health benefits but that e-cigarettes should be regulated, particularly when it comes to the marketing of such products.  
  
Investment advisors at Merrill Lynch agree that e-cigarettes are likely to remain a “hot topic” in 2014, expecting the robust growth to continue amidst lack of overall regulation and taxes. Despite these predictions, the outlook for e-cigarettes in the US and Europe remains somewhat uncertain- in early 2014, e-cigarettes only accounted for 1%-2% of the total cigarette market.
+
While acknowledging that there are many unknowns about e-cigarettes and that these products are not harmless, many experts in tobacco control and public health will agree that vaping e-cigarettes is less harmful to the health of an individual smoker than smoking cigarettes. For e-cigarettes to have a positive impact on population-level health, a significant number of smokers need to switch completely to e-cigarettes (so not dual-using these products with cigarettes), and the product cannot act as a ‘gateway’ into nicotine addiction for youth and non-smokers, or undermine existing proven tobacco control measures. The difficulty is that a growing share of the global e-cigarette market these days is held by the tobacco industry, which has a history of using NGPs to stem the decline in cigarette sales and promote these products to any potential customer.<ref>S. Peeters, A. B. Gilmore, [https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1001506 Transnational Tobacco Company Interests in Smokeless Tobacco in Europe: Analysis of Internal Industry Documents and Contemporary Industry Materials], ''PLoS Med'', 10(9): e1001506</ref><ref>M. Zatoński, A. Brandt, [https://www.elgaronline.com/view/edcoll/9781788970457/9781788970457.00010.xml Divide and conquer? E-cigarettes as a disruptive technology in the history of tobacco control]. In: L. Gruszczynski, editor. The Regulation of E-cigarettes: International, European and National Challenges. Elgar Studies in Health and the Law. Cheltenham, UK/Northampton, MA, USA: Edward Elgar Publishing; 2019</ref>
  
Merrill Lynch does not think it is a foregone conclusion that e-cigarettes will replace tobacco within the next ten years, arguing that it is difficult to forecast how many people will switch to e-cigarettes entirely, and how many will use e-cigarettes only occasionally. The outlook for the industry will be driven by several factors including: 1) regulation; 2) taxes; and 3) product development and innovation.<ref> Merrill Lynch, [http://research1.ml.com/C/?q=k3RTxw715ZpCYNeD00HeWw__&e=dsweanor%40uottawa.ca&h=lVdz8g Trial remains high; repeat usage lower], 6 January 2014, accessed January 2014</ref>
+
=== What the Industry Says: It’s All About Harm Reduction===
 +
The tobacco industry has long argued that products like e-cigarettes should be made easily available to smokers, to offer them a ‘less harmful’ alternative to smoking.<ref name=hr>S. Peeters, A.B. Gilmore, [https://tobaccocontrol.bmj.com/content/24/2/182  Understanding the emergence of the tobacco industry’s use of the term harm reduction in order to inform public health policy], ''Tobacco Control'', 2015; 24:182-189</ref> In its 2018 Next Generation Products report, [[Imperial Tobacco]] wrote that particularly e-cigarettes (or ‘vapour products’ as they refer to it) were creating “…a huge global public health opportunity”.<ref>Imperial Brands, [https://web.archive.org/web/20191031100739/https://www.imperialbrandsplc.com/content/dam/imperial-brands/corporate/about-us/NGPs/18_10_NGP_Report.pdf Creating Something Better for the World’s Smokers. Our Approach to Next Generation Products], undated (published online October 2018), Imperial Brands website, accessed October 2019</ref> BAT, somewhat misleadingly, claimed that there is ‘growing scientific consensus’ on the issue. In its 2018 Sustainability Report, the company stated:
 +
: “There is growing consensus among public health bodies and academics that vapour products [e-cigarettes] can have a significantly reduced risk profile compared to smoking. Public Health England in the UK estimates these products are ‘95% less harmful than smoking’2. Other third-party science and research supporting the significantly reduced-risk potential of vapour products continue to grow”.<ref>British American Tobacco,  [https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DOAWWEKR/$file/Sustainability_Report_2018.pdf Transforming Tobacco. Sustainability Report 2018], BAT website, accessed October 2019</ref>
 +
A study by researchers from the University of Bath’s Tobacco Control Research Group found that these products, and the associated [[Harm Reduction| harm reduction]] narrative, serve to “…‘renormalize’ an industry that is determined to be seen as a responsible business with a legitimate product…”.<ref name=hr/> The study also found that the products and narrative are used as tools to initiate dialogue with scientists, public health experts, politicians and policy makers, re-framing themselves as ‘part of the solution’ rather than being the problem.<ref name=hr/> Therefore, the tobacco industry is using e-cigarettes and other NGPs as a way to try and re-enter the policy arena from which it has increasingly, and successfully, been excluded in line with Article 5.3 of the WHO Framework Convention on Tobacco Control.
 +
===What Industry Documents Show: It’s All About Profit===
 +
Despite positioning itself as ‘the solution to the tobacco problem’ it is worth noting that the core of the global tobacco industry’s business remains unchanged. E-cigarettes only form a tiny percentage of their work and will do so for the foreseeable future.<ref name=EMnew/> Tobacco company presentations to investors show that cigarettes remain central to the tobacco business, and the main driver for growth.<ref> Japan Tobacco Inc., [https://www.jt.com/investors/results/forecast/pdf/2019/Second_Quarter/20190731_06.pdf JT Group, 2019 Second-Quarter results], CFP Presentation, 1 August 2019, accessed September 2019</ref ><ref name=AReighteen> British American Tobacco, [https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DOAWWGJT/$file/Annual_Report_and_Form_20-F_2018.pdf Transforming Tobacco], BAT Annual Report 2018</ref>.<ref name=buildingblu> Imperial Tobacco, [https://www.imperialbrandsplc.com/content/dam/imperial-brands/corporate/investors/presentations/investor-day/2018/2018.09.25%20Buildingblu.pdf.downloadasset.pdf Building blu], Investor Day Presentation, 25 September 2018</ref>  At its 2019 Annual General Meeting PMI’s CEO [[Andre Calantzopoulos]] said that, while stating that NGPs are increasingly complementing its cigarette business, the company was “committed to maintaining leadership of the cigarette category” and that it would be “focusing innovation on fewer, more impactful [cigarette] initiatives that can be deployed swiftly in any market”.<ref>L.C. Camilleri, A. Calantzopoulos, Presentation Slides, Annual Meeting of Shareholders, Philip Morris International, New York, 1 May 2019, available at pmi.com, accessed October 2019</ref> Similarly, BAT’s CEO [[Jack Bowles]] told investors in August 2019: “Our combustible business continues to drive the financial performance of the group and we are performing well”.<ref>J. Bowles, T. Marroco, [https://web.archive.org/web/20191031144416/https://www.bat.com/group/sites/uk__9d9kcy.nsf/vwPagesWebLive/DO72TJQU/$FILE/medMDBENHA5.pdf?openelement 2019 Half Year results Presentation], British American Tobacco website, accessed October 2019</ref>
  
== Quitting Tool or Gateway to Smoking? ==
+
Profits from e-cigarettes are seen as additional to tobacco companies’ core business, and not simply replacing revenue lost from falling sales of cigarettes.<ref name=chapman> M. Chapman, [https://web.archive.org/web/20190806091437/https://www.thisismoney.co.uk/money/markets/article-7267587/How-vaping-REVERSED-fall-nicotine-use-tobacco-giants-cashing-in.html How vaping has REVERSED the fall in nicotine use and tobacco giants are cashing in on the surprising trend], ''Financial Mail on Sunday'', 20 July 2019, accessed August 2019</ref> In a July 2018 question and answer sessions, [[Imperial Tobacco]] CEO Alison Cooper talked about ‘vapour consumption’ and told her audience that “a lot of the time it’s actually also adding to the nicotine consumption in the market. it’s not a question of shifting to NGP, then that comes straight out of the combustible tobacco consumption because we are seeing nicotine market growth in the UK, for example”.<ref>A. Cooper. Tobacco Max Webinar, 2 July 2018, available from Imperial Brands website, accessed October 2019</ref>
The debate over the use of e-cigarettes has become a major issue in public health. Some public health experts believe that e-cigarettes are an essential alternative to smoking tobacco that can help smokers quit. Others argue e-cigarettes could be a route into nicotine addiction and point out that their safety has not yet been proven. Those in between believe that e-cigarettes may offer public health benefits but that e-cigarettes should be regulated, particularly when it comes to the marketing of such products.
 
One leading e-cigarette proponent and Emeritus Professor Gerry Stimson, argued that, “Electronic cigarettes are the big game changer, as they have the potential to help smokers transform their “health and welfare”.<ref> Gerry V Stimson, David Dorn, Rick Lines, [http://www.bmj.com/content/347/bmj.f5780/rr/665237 Re: E-cigarettes and the marketing push that surprised everyone], Letter to the British Medical Journal, 4 October 2013 </ref>
 
  
In July 2013, the World Health Organisation (WHO) issued a statement stressing that the safety of e-cigarettes “has not been scientifically demonstrated”:
+
Similarly, in October 2018, BAT reported that the nicotine consumer pool had started growing in 2013 - when the tobacco industry had started investing in e-cigarettes.<ref>N. Durante, [https://web.archive.org/web/20191031150311/https://www.bat.com/group/sites/uk__9d9kcy.nsf/vwPagesWebLive/DO6FKEVZ/$FILE/medMDB5MNZA.pdf?openelement Analyst Briefing 16th October 2018], British American Tobacco website, accessed October 2019</ref> In March 2019, the company stated that the growth in its ‘vapour’ product category was being driven by ''new'' consumers of nicotine products, rather than from people switching, with the opposite being true for their [[Heated Tobacco Products]].<ref> P. Lageweg, “Step-Changing New Categories: A very significant growth opportunity”, British American Tobacco Investor Day Presentation, 14 March 2019</ref>(see [[E-Cigarettes: British American Tobacco]])
::"The potential risks they pose for the health of users remain undetermined. Furthermore, scientific testing indicates that the products vary widely in the amount of nicotine and other chemicals they deliver and there is no way for consumers to find out what is actually delivered by the product they have purchased."<ref>WHO, [http://www.who.int/tobacco/communications/statements/eletronic_cigarettes/en/index.html Questions and answers on electronic cigarettes or electronic nicotine delivery systems (ENDS)], Statement, 9 July 2013</ref>
 
  
The WHO also pointed out that "for smoking cessation products to be most effectively and safely used, they need to be used according to instructions developed for each product through scientific testing." As of yet, there are no scientifically proven instructions for using e-cigaretes as replacements for smoking or for smoking cessation.
+
=== WHO Urges Caution===
 +
In March 2019, the Secretariat of the WHO FCTC issued an [https://untobaccocontrol.org/impldb/wp-content/uploads/Info-Note_Novel-Classification_EN.pdf Information Note] which compiled all Conference of the Parties (COP) decisions related to e-cigarettes.  
  
Additionally, there are concerns that e-cigarettes could become a route to conventional cigarette addiction: “E-cigarettes must become an aid to quit smoking, not a tool to enlarge the number of smokers,” argues Jean-Louis Touraine, a Socialist lawmaker in France, doctor and expert on health-care policy. “They are becoming a fad, and many young people are being attracted to them.<ref>Albertina Torsoli and Makiko Kitamura,[http://www.bloomberg.com/news/2013-06-13/future-of-e-cigarettes-in-question-on-european-crackdown.html Future of E-Cigarettes in Question on European Crackdown], 14 June 2013, accessed January 2014</ref><ref>Nathan K. Cobb and David B. Abrams [http://www.nejm.org/doi/pdf/10.1056/NEJMp1105249 Perspective. E-Cigarette or Drug-Delivery Device? Regulating Novel Nicotine Products] ''New England Journal of Medicine'', 21 July 2011</ref>  
+
A few months later, the Secretariat released a statement urging governments to remain vigilant, stating that:
Similar arguments are used in the legislative debate regardubg regulation and prohibition, as reflected in an EU Parliament Library briefing:
+
<blockquote>
::"Arguments in favour of prohibition of e-cigarettes are that their safety is not proven, they can cause nicotine addiction and provide a ‘gateway’ to smoking.  
+
“novel and emerging nicotine and tobacco products…are creating another layer of interference by the tobacco industry and related industries, which is still reported by Parties as the most serious barrier to progress in implementing the WHO FCTC”.<ref name=FCTCpr> World Health Organization, [https://www.who.int/fctc/mediacentre/news/2019/remain-vigilant-towards-novel-new-nicotine-tobacco-products/en/  The Convention Secretariat calls Parties to remain vigilant towards novel and emerging nicotine and tobacco products], FCTC press release, 13 September 2019, accessed October 2019</ref>
::"Opponents consider prohibition as a 'smoke or die' approach that will drive nicotine addicts to smoking tobacco products. It may also lead to the emergence of a black market for e-cigarettes and e-liquids without any quality controls." <ref name = EUlib/>
+
</blockquote>
 +
It also reminded Parties of their obligations under Article 5.3 to protect tobacco control policies and activities from all commercial and vested interests.<ref name=FCTCpr/>
  
* For more information on the human health effects of e-cigarettes see the [http://www.ashscotland.org.uk/what-we-do/supply-information-about-tobacco-and-health/tobacco-related-research/research-2014/e-cigarettes-2014.aspx overview of recent research] on ASH Scotland's website (updated weekly from PubMed).
+
== TobaccoTactics Resources ==
 +
* [[E-Cigarettes: British American Tobacco]]
 +
* [[E-Cigarettes: Lorillard]]
 +
* [[Fontem Ventures]]
 +
* [[E-Cigarettes: Japan Tobacco International]]
 +
* [[E-Cigarettes: Philip Morris International]]
 +
* [[E-Cigarettes: Altria]]
  
==E-cigarettes At The Pharmacy==
+
* The list of  [http://www.tobaccotactics.org/index.php/Category:E-Cigarettes all pages on e-cigarettes].
  
As of 24 February 2014, Boots, the high street chemist, sells the newly-created Puritane brand from [[Imperial Tobacco]] subsidiary [[Fontem Ventures]]. Puritane will be exclusively available at Boots. Likewise, in January 2014, LloydsPharmacy began stocking Vype e-cigarettes, manufactured by [[British American Tobacco]] subsidiary [[Nicoventures]], in its 1,500 pharmacies.<ref name = PJ>''PJ Online'', [http://www.pjonline.com/news/boots_and_lloyds_join_the_vaping_fold_by_selling_ecigarettes Boots and Lloydspharmacy join the vaping fold by selling e-cigarettes], Royal Pharmaceutical Society, 13 February 2014, accessed February 2014</ref> It is unclear whether these deals prohibition the selling of any other e-cigarette brands. PMI’s Nicocig and Nicolites sell in several pharmacy outlets across the UK and are also available from an online pharmacy.<ref>Weldricks Pharmacy, [http://www.weldricks.co.uk/search?q=nicocigs&filters=%2Fsearch%2Fnon-presc Product Search Nicocigs], undated, accessed June 2014</ref>
+
==Relevant Links==
 
+
* World Health Organisation (WHO):[https://www.who.int/news-room/fact-sheets/detail/tobacco| Tobacco - Electronic Nicotine Delivery Systems (ENDS)]
* For more detail, see [[E-cigarettes: At The Pharmacy]]
+
* Global Center for Good Governance in Tobacco Control (GGTC):[https://ggtc.world/ends/| ENDS]
 
+
* European Commission (EC):[https://ec.europa.eu/health/tobacco/ecigarettes_en| Electronic Cigarettes]
==Tobacco Industry Funding e-Cigarette Research==
+
* United States (US) Federal Drug Administration (FDA):[https://www.fda.gov/tobacco-products/products-ingredients-components/vaporizers-e-cigarettes-and-other-electronic-nicotine-delivery-systems-ends Vaporizers, E-Cigarettes, and other Electronic Nicotine Delivery Systems (ENDS)]
One of the first pieces of evidence perhaps backing the claim that e-cigarettes could help smokers quit resulted from a clinical trial at the University of Catania in Italy. The results, published in autumn 2011, sparked a heated discussion between people who believe in the benefits of e-cigarettes and those who advocate e-cigarette sales bans.<ref name=BMC>R. Polosa et al, [http://www.biomedcentral.com/1471-2458/11/786 Effect of an Electronic Nicotine Delivery Device (e-Cigarette) on Smoking Reduction and Cessation]: A Prospective 6-Month Pilot Study, ''BMC Public Health'', 11 October 2011, accessed October 2011</ref> 
 
According to the researchers, e-cigarettes were more effective for smoking cessation and for reducing daily cigarette consumption than nicotine replacement therapy.
 
However, it must be noted that this research was funded by [[PMI]], a multinational tobacco company who has invested in the e-cigarette market. Additionally, the principal investigator was involved in marketing the same e-cigarettes being tested. This raises a conflict of interest argument, and is an example of a frequently-employed industry tactic of [[Hiring Independent Experts| commissioning research to suit its interests ]].
 
* For more on this research, see [[E-cigarettes: Mixing Research and Marketing]].
 
 
 
 
 
[[Image:Vaporizer.jpg|250px|thumb|right| fancy e-cigarettes ]]
 
 
 
== Other TobaccoTactics Resources ==
 
 
 
* [[E-cigarettes: Marketing]]
 
* [[E-cigarettes: Regulation]]
 
* [[E-cigarettes: At The Pharmacy]]
 
 
 
* [[Harm Reduction]]
 
* The list of  [http://www.tobaccotactics.org/index.php/Category:E-Cigarettes all pages on e-cigarettes].
 
  
 
== Notes ==
 
== Notes ==
 
<references/>
 
<references/>
 
[[category: Next Generation Products]][[category:Harm Reduction]][[category: E-Cigarettes]]
 
[[category: Next Generation Products]][[category:Harm Reduction]][[category: E-Cigarettes]]

Revision as of 17:15, 4 November 2019

To secure the tobacco industry’s medium to long-term future, in light of growing tobacco regulations and a rapidly shrinking cigarette market, tobacco companies have been looking to develop and market so-called ‘Next Generation Products’ (NGPs), which include snus, e-cigarettes, and Heated Tobacco Products (HTPs).[1][2] This page gives an overview of tobacco companies’ interests in e-cigarettes, also known as electronic cigarettes or ENDS (Electronic Nicotine Delivery Systems), which have been acquired, developed and sold by tobacco companies since 2012. This page links to further pages giving more detailed information about each company’s products, market share and business strategy, including methods used to promote their products around the world. This page also points to examples of lobbying activity conducted by, and on behalf of, tobacco companies, in order to influence regulation around e-cigarettes. Research updates on, and analysis of, the potential health benefits/risks of e-cigarettes are outside the scope of Tobacco Tactics, as are products produced by independent companies without tobacco industry links.

Image 1: Vuse E-Cigarettes on sale in the US in 2019 (Image source: Vuse Vapor website)[3])


Tobacco Companies Enter the E-Cigarette Market

Tobacco companies began buying existing e-cigarette brands, and developing their own e-cigarette products from 2012. At the time, the global e-cigarette market was highly fragmented and dominated by independent e-cigarette companies, with the Financial Times estimating in June 2013 that the market was worth $3 billion.[4]

Tobacco companies were well placed to take advantage of this fast growing market, as they had established distribution points and the resources to cover the costs of marketing. They were also in a position to meet the financial and legal demands that would likely come with any future regulation of e-cigarettes.[4]

In 2012 and 2013 there was a flurry of tobacco company investment in e-cigarettes, both in the United Kingdom (UK) and in the United States (US), a trend which continued in subsequent years.

By 2018, British American Tobacco (BAT), Imperial Tobacco, Japan Tobacco International (JTI), and to a lesser degree Philip Morris International (PMI), all had their own ‘flagship’ e-cigarette brands, and were expanding their global markets. In the same year, Altria bought a minority stake in US e-cigarette manufacturer JUUL Labs. Market research company Euromonitor International estimated that the e-cigarette market had grown from US$5 billion in 2013 to more than US$15 billion in 2018.[5]

British American Tobacco

British American Tobacco (BAT) launched ‘Vype’ in August 2013. This e-cigarette was originally developed by CN Creative, a start-up acquired by BAT in December 2012 and later merged into Nicoventures.[6][7] After forming a ‘strategic partnership’ with US tobacco company Reynolds American Inc (RAI) in 2014, BAT acquired the whole company and its ‘Vuse’ range of e-cigarettes in 2017. For more information, see RJ Reynolds. BAT went on to acquire more independent e-cigarette companies, and developed a range of products under the Vype and Vuse brands. As of mid-2019, BAT planned to consolidate the two brands as Vuse.[8][9]

Lorillard

Lorillard was the third largest cigarette manufacturer in the US at the time it acquired the e-cigarette company ‘blu ecigs’ in 2012.[10] In 2013, it entered the UK market by taking over ‘Skycig’, a leading independent brand, which was then rebranded as ‘blu ecigs’.[11][12] When Reynolds acquired Lorillard in 2014, blu was sold to Imperial Tobacco to avoid antitrust concerns (see below).[13][14]

Imperial Tobacco

Imperial Tobacco's subsidiary Fontem Ventures acquired Dragonite in August 2013, previously owned by Hon Lik, the Chinese pharmacist who claims to have invented the e-cigarette. In July 2014, as part of Reynolds’s acquisition of Lorillard, Imperial bought blu.[13] In February 2015, Imperial launched its own e-cigarette ‘Jai’ in Europe.[15] However blu became Imperial’s flagship brand.

Japan Tobacco International

Japan Tobacco International (JTI) bought UK e-cigarette brand E-lites in June 2014 from Zandera.[16][17][18] After acquiring US e-cigarette company ‘Logic’ in July 2015, E-Lites was rebranded as Logic, and this became JTI’s flagship brand.[19][20]

Philip Morris International

Philip Morris International (PMI) was the last of the international tobacco companies to enter the e-cigarette market. It announced in December 2013, that it was teaming up with Altria to market electronic cigarettes and other tobacco products it described as “reduced risk” .[21] PMI gained the right to exclusively sell Altria's e-cigarettes outside the United States. In 2014, PMI acquired UK company Nicocigs, the owner of the ‘Nicolites’ brand.[21][22] After rebranding ‘Nicolites’ as ‘Nicocig’, PMI went on to develop its own e-cigarette IQOS Mesh, which went on sale in the UK in 2018, alongside IQOS Heated Tobacco Products.[23] [24][25] However, PMI’s interests in e-cigarettes are relatively minor compared to its interests in HTPs.

Altria

Altria launched ‘MarkTen’, produced by its subsidiary Nu Mark, in the US in 2014.[26][27][28] Altria acquired independent US e-cigarette company Green Smoke in 2014.[29][30] Both brands were discontinued in December 2018 and Altria announced that it had bought a 35% stake in market leader JUUL Labs.

Patent Claims

In March 2014, Imperial Tobacco’s Fontem Ventures launched legal proceedings over patents in California against nine of its US rivals including the top three Lorillard's Blu Ecigs, NJOY and Logic, and BAT’s Nicoventures. According to the Financial Times the lawsuit showed that "big tobacco" was becoming increasingly aggressive in the battle for the fast-growing e-cigarette market: "patents are expected to play an increasingly crucial role as big tobacco companies vie with smaller rivals to gain market share."[31][32] Fontem Ventures also instigated lawsuits against Altria subsidiary Nu Mark, and RJ Reynolds (BAT). Most of these cases had been settled out of court by 2017.[33][34][35][36]

E-cigarette company JUUL Labs filed multiple complaints of patent infringement in the US courts, in October and November 2018, mainly against companies in China and Uruguay.[37][38] In December 2018, Altria acquired a 35% share in JUUL Labs, who subsequently dropped the infringement claims in April 2019.[39]

A Growing Market And Falling Shares

According to Euromonitor International, between 2014 and 2018 the value of the global e-cigarette market more than doubled from US$6.8 billion to over US$15.6 billion.[5][40] The biggest markets by far remained the US (which grew from US$2.6 billion to US$6.8 billion ) and Western Europe (US$2.3 billion to US$5.2 billion ), with the UK the biggest single market in Europe. The value of the market in the Asia-Pacific region, while a quarter of the size of the US market, nearly doubled to US$1.4 billion. Growth was also rapid in some Eastern European countries, notably Hungary, the Czech Republic and Poland. Russia remained a sizeable market (although mainly for Chinese products). Markets in Latin America and Australasia, although significantly smaller, also doubled in value, while the market in the Middle East grew more slowly.

Market size is clearly affected by national rules and [governing the sale of e-cigarette products]. However, the existence of regulation restricting or banning the sale of e-cigarettes does not necessarily mean that tobacco company products are not available to purchase in a particular country (see for example BAT’s sales of Vype in Mexico).

In 2018, Euromonitor International put BAT’s share of the global e-cigarette market (by value) at 9.4% (in 2016, prior to its acquisition of RAI, it had been 3.4%). Imperial, JTI and PMI’s market share had all fallen since 2014 (see image 3).[41] PMI’s overall share was the lowest (0.3%) in 2018 with IQOS Mesh yet to register.[42][43]

Company 2014 2015 2016 2017 2018
BAT (including RAI from 2017) 1.6 2.9 3.4 11.0 9.4
RAI 9.6 6.3 6.5
Imperial Tobacco 0.3 4.7 3.9 3.7 3.2
JTI 4.1 3.3 2.8 3.1 2.8
E-Cigarettes: Altria 1.1 1.5 1.8 2.5 2.4
PMI 1.3 0.9 0.6 0.4 0.3
Independent companies 82.0 80.4 80.4 75.3 63.3
JUUL Labs 0.6 4.0 18.6

Table 1: Tobacco Company % Shares of the Global Market, by value, 2014-2018 (source Euromonitor International, 2019)[41]


Between 2015 and 2018 tobacco companies lost a significant slice of the market to JUUL Labs, whose global share rose from 4% to 18.6% (see Table 1).[41][42] In the US the rise of Juul was even more marked, with the company gaining share from both independent e-cigarette companies, and tobacco companies. Imperial and JTI both lost around half of their share between 2016 and 2018. Even after its acquisition of RAI in 2017, BAT’s share in the US fell by more than four percentage points in a year.[41][42]

Overall independent e-cigarette companies maintained the largest share of the global market, although this fell from over 80% in 2014 to just over 63% in 2018.[41][42]

Image 2: UK Singer Lily Allen paid by BAT to promote Vype on social media, triggering complaints to the UK Advertising Standards Authority (Image source: PR Week)[44])

Marketing Strategies

Tobacco companies use a wide range of marketing tactics to promote their products, ranging from traditional media advertising, price promotions and point of sale displays. However, as e-cigarette advertising has become more restricted companies have been forced to become more creative. Pop-up stores and events, music festivals and collaborations with artists and designers have all been used to help market e-cigarettes, with widespread online promotion via social media, paid celebrities and influencers.[44][45] This has led to the companies being criticised for targeting young people, rather than adult smokers looking to quit.[44][46][47][48]

The same criticism has been levelled at JUUL Labs. In September 2018, the US Food and Drug Administration (FDA) wrote to JUUL Labs, Fontem Ventures (Imperial), Altria, Reynolds American Inc. (RAI) and JTI), giving the companies 60 days to provide a written plan to “address the rate of youth use” of their products.[49]

Lobbying Regulators

Article 5.3 of the World Health Organization Framework Convention on Tobacco Control (WHO FCTC), designed to protect public health policies from commercial and other vested interests, applies to the whole tobacco industry irrespective of the type of products they are attempting to sell. Tobacco companies are spending considerable amounts of time, effort and money lobbying decision-makers concerned with laws and regulations around e-cigarettes.[50]

As with lobbying on tobacco products, tactics include:

Can E-Cigarettes Help Advance Public Health?

Globally, there is an ongoing debate about whether e-cigarettes are a threat or an opportunity to public health. Some public health experts believe that e-cigarettes are an essential alternative to smoking tobacco that can help smokers quit. Others argue that e-cigarettes could be a route into nicotine addiction and point out that their long-term safety has not yet been proven. There are also those that believe that e-cigarettes may offer public health benefits but that e-cigarettes should be regulated, particularly when it comes to the marketing of such products.

While acknowledging that there are many unknowns about e-cigarettes and that these products are not harmless, many experts in tobacco control and public health will agree that vaping e-cigarettes is less harmful to the health of an individual smoker than smoking cigarettes. For e-cigarettes to have a positive impact on population-level health, a significant number of smokers need to switch completely to e-cigarettes (so not dual-using these products with cigarettes), and the product cannot act as a ‘gateway’ into nicotine addiction for youth and non-smokers, or undermine existing proven tobacco control measures. The difficulty is that a growing share of the global e-cigarette market these days is held by the tobacco industry, which has a history of using NGPs to stem the decline in cigarette sales and promote these products to any potential customer.[62][63]

What the Industry Says: It’s All About Harm Reduction

The tobacco industry has long argued that products like e-cigarettes should be made easily available to smokers, to offer them a ‘less harmful’ alternative to smoking.[64] In its 2018 Next Generation Products report, Imperial Tobacco wrote that particularly e-cigarettes (or ‘vapour products’ as they refer to it) were creating “…a huge global public health opportunity”.[65] BAT, somewhat misleadingly, claimed that there is ‘growing scientific consensus’ on the issue. In its 2018 Sustainability Report, the company stated:

“There is growing consensus among public health bodies and academics that vapour products [e-cigarettes] can have a significantly reduced risk profile compared to smoking. Public Health England in the UK estimates these products are ‘95% less harmful than smoking’2. Other third-party science and research supporting the significantly reduced-risk potential of vapour products continue to grow”.[66]

A study by researchers from the University of Bath’s Tobacco Control Research Group found that these products, and the associated harm reduction narrative, serve to “…‘renormalize’ an industry that is determined to be seen as a responsible business with a legitimate product…”.[64] The study also found that the products and narrative are used as tools to initiate dialogue with scientists, public health experts, politicians and policy makers, re-framing themselves as ‘part of the solution’ rather than being the problem.[64] Therefore, the tobacco industry is using e-cigarettes and other NGPs as a way to try and re-enter the policy arena from which it has increasingly, and successfully, been excluded in line with Article 5.3 of the WHO Framework Convention on Tobacco Control.

What Industry Documents Show: It’s All About Profit

Despite positioning itself as ‘the solution to the tobacco problem’ it is worth noting that the core of the global tobacco industry’s business remains unchanged. E-cigarettes only form a tiny percentage of their work and will do so for the foreseeable future.[5] Tobacco company presentations to investors show that cigarettes remain central to the tobacco business, and the main driver for growth.[67][68].[69] At its 2019 Annual General Meeting PMI’s CEO Andre Calantzopoulos said that, while stating that NGPs are increasingly complementing its cigarette business, the company was “committed to maintaining leadership of the cigarette category” and that it would be “focusing innovation on fewer, more impactful [cigarette] initiatives that can be deployed swiftly in any market”.[70] Similarly, BAT’s CEO Jack Bowles told investors in August 2019: “Our combustible business continues to drive the financial performance of the group and we are performing well”.[71]

Profits from e-cigarettes are seen as additional to tobacco companies’ core business, and not simply replacing revenue lost from falling sales of cigarettes.[72] In a July 2018 question and answer sessions, Imperial Tobacco CEO Alison Cooper talked about ‘vapour consumption’ and told her audience that “a lot of the time it’s actually also adding to the nicotine consumption in the market. it’s not a question of shifting to NGP, then that comes straight out of the combustible tobacco consumption because we are seeing nicotine market growth in the UK, for example”.[73]

Similarly, in October 2018, BAT reported that the nicotine consumer pool had started growing in 2013 - when the tobacco industry had started investing in e-cigarettes.[74] In March 2019, the company stated that the growth in its ‘vapour’ product category was being driven by new consumers of nicotine products, rather than from people switching, with the opposite being true for their Heated Tobacco Products.[75](see E-Cigarettes: British American Tobacco)

WHO Urges Caution

In March 2019, the Secretariat of the WHO FCTC issued an Information Note which compiled all Conference of the Parties (COP) decisions related to e-cigarettes.

A few months later, the Secretariat released a statement urging governments to remain vigilant, stating that:

“novel and emerging nicotine and tobacco products…are creating another layer of interference by the tobacco industry and related industries, which is still reported by Parties as the most serious barrier to progress in implementing the WHO FCTC”.[76]

It also reminded Parties of their obligations under Article 5.3 to protect tobacco control policies and activities from all commercial and vested interests.[76]

TobaccoTactics Resources

Relevant Links

Notes

  1. Euromonitor International. Global Tobacco: Key Findings Part I- Cigarettes, 22 August 2017
  2. G. Salmon, British American Tobacco – Drawn to the glo, Hargreaves Lansdown, 27 July 2017, accessed September 2017
  3. Vuse Vapor website, undated, accessed October 2019
  4. 4.0 4.1 S. Bond, Big Tobacco bets a packet on e-cigarettes, "Financial Times", 6 June 2013, accessed October 2019
  5. 5.0 5.1 5.2 Euromonitor International, World Market for Cigarettes, Briefing 16 October 2019 (behind paywall)
  6. British American Tobacco, British American Tobacco buys UK based e-cigarette technology company, BAT Press Release, 19 December 2012, accessed June 2019
  7. CN Creative sold to British American Tobacco, Manchester Evening News, 19 December 2012, accessed June 2019
  8. British American Tobacco, Half-year Report for the six months to June 2019, 1 August 2019, accessed August 2019
  9. British American Tobacco, Half-year Report for the six months to June 2019: Presentation Transcript, 1 August 2019, accessed August 2019
  10. blu ecigs the leading electronic cigarette company acquired by Lorillard, Cision PR Newswire, 25 April 2012, accessed October 2019
  11. Lorillard, Inc. Acquires British-based SKYCIG, Expanding its Electronic Cigarette Business, Cision PR Newswire, 1 October 2013, accessed October 2019
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