Back to top

e-cigarette May Cause Less Harm: Tobacco Primes to Gain

Read MoreHide Full Article

With people becoming increasingly health conscious, more and more anti-tobacco campaigns around the world are on the rise. However, a recent development has ushered in some good news for tobacco companies. A study jointly conducted by the National Institute on Drug Abuse, the National Cancer Institute and the Cancer Intervention and Surveillance Modeling Network has found out that e-cigarettes can result in 21% lower mortality rates among smokers.

The study was conducted between youth smoking e-cigarettes who would otherwise have taken some other nicotine product and those who smoke e-cigarettes and would otherwise smoke traditional cigarettes. According to the reports, e-cigarettes are beneficial for smokers who want to quit but is detrimental to first-time smokers.

Further, experts involved in the research believe that usage of e-cigarettes by the youth should be monitored closely.

In May 2016, White House reportedly decided to exclude e-cigarettes from a recent anti-tobacco regulation proposed by the Food and Drug Administration (FDA).

The FDA had mandated tobacco makers to seek marketing authorization on any tobacco product introduced after Feb 15, 2007. The law was extended to include e-cigarettes, pipe tobacco, cigars and hookah and is expected to be effective from Aug 2016.

In order to maintain share in the developed countries, the tobacco biggies have resorted to innovation in the form of e-cigarettes and Reduced Risk Products (RRP) to mitigate losses from an increasing number of quitters. Per Euromonitor International, the global e-cigarette market is expected to grow to $51 billion or hold 4% share of the worldwide tobacco market, by 2030.

Altria Group Inc. (MO - Free Report) is steadily expanding its presence in the e-cigarette market with its MarkTen and Green Smoke brands. Moreover, in an attempt to boost unconventional tobacco products, Altria extended its strategic agreement with Philip Morris International (PM - Free Report) in Jul 2015. The companies will work on a joint research, development and technology-sharing framework for developing unconventional cigarettes.

Similarly, Philip Morris expects to launch a set of Next Generation Products (NGPs) this year for adult consumers at reduced tobacco-related risks to cater to the shift in consumer preference. The company launched another reduced-risk product – iQOS – in two pilot markets in 2014. The product saw a favorable response.

Reynolds American Inc. is also is increasing its focus on the e-cigarette category, which is becoming highly popular, especially among youngsters. The company’s e-cigarette – Vuse – has gained popularity as well as major market share since its launch in 500 stores in Colorado in Jul 2013. After its phenomenal success in Wisconsin and Indiana, the brand is now available in about 100,000 outlets, mainly in convenience and gas stores.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Altria Group, Inc. (MO) - free report >>

Philip Morris International Inc. (PM) - free report >>

Published in