Altria has announced the discontinuation of production and distribution of all MarkTen and Green Smoke e-vapor products and Verve oral nicotine containing products. This decision is based upon the current and expected financial performance of these products, coupled with regulatory restrictions that burden Altria’s ability to quickly improve these products. The company will refocus its resources on more compelling reduced-risk tobacco product opportunities.
“We remain committed to being the leader in providing adult smokers innovative alternative products that reduce risk, including e-vapor,” said Howard Willard, chairman and CEO, Altria Group. “We do not see a path to leadership with these particular products and believe that now is the time to refocus our resources. We recognize the impact this decision has on our employees and business partners, which we do not take lightly.”
Altria’s subsidiaries will begin working with their retailers, wholesalers, contract manufacturers and suppliers to ensure an orderly process. MarkTen cig-a-likes are currently in distribution at retail and through e-commerce. Green Smoke is primarily available on e-commerce with limited retail presence. Verve is in limited distribution at retail and e-commerce.
Altria expects to record one-time pre-tax charges of approximately $200 million, the majority of which would be non-cash asset impairment charges, in the fourth quarter of 2018 as a result of this decision. These charges will be excluded from Altria’s adjusted results.