• June 25, 2024

Altria Urges Action Against Illegal Vapes

 Altria Urges Action Against Illegal Vapes
Photo: Malcolm Griffiths

A booming illegal disposable flavored vape market is hurting sales of Altria Group’s authorized products, according to Altria Chief Financial Officer Sal Mancuso.

Speaking during a call with media and financial analyst, Mancuso noted that traditional cigarette sales had dropped even more than usual in the third quarter of 2023. The decline, he said, was caused by inflation and economic issues influencing customers as well as the heightened usage of illegal flavored disposable e-cigarettes.

Mancuso also observed that there appeared to be more switching between different categories than initially assumed and that e-cigarettes alone were causing a 1.5 percent to 2.5 percent reduction in traditional cigarette industry volumes.

R.J. Reynolds Vapor Co. leads the U.S. vapor market with a 41.8 percent share, per the latest Nielsen convenience store report released Oct. 7.

Njoy, which Altria purchased for $2.75 billion in June, has struggled to increase its No. 3 market share.

“The current state of the (vaping) market is intolerable for both legitimate manufacturers and consumers,” Altria CEO Billy Gifford said during the call. “The regulated market is being overrun by illegal flavored disposable e-vapor products made and distributed by companies violating virtually every rule and guidance FDA has issued since 2016. A lot of these products are imported. They’re imported illegally and then they’re sold illegally.”

Saying a “strong course correction is needed,” Gifford noted that Altria has filed federal lawsuits in California against 34 organizations that include manufacturers, distributors and online retailers.