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  • Nicotine Market Shares Flat in December

    Nicotine Market Shares Flat in December

    Tobacco Reporter Archive

    Consumer demand for nicotine products has fluctuated due to inflation and rising cigarette prices over the past 13-19 months. However, the Neilsen report covering the four-week period ending Dec. 30 shows that market shares are holding steady for both next-generation and traditional tobacco brands.

    The market share of R.J. Reynolds’ top-selling Vuse e-cigarette remained flat at 42 percent in December at convenience stores, according to the report. While Vuse’s market share was unchanged, No. 2 Juul dropped from 24.3 percent to 24.2 percent for the report covering the four-week period ending Dec. 30.

    As recently as May 2019, Juul held a 74.6 percent share in the U.S. electronic cigarette market. That’s when a series of regulatory actions led to product-reduction concessions, according to media reports.

    Meanwhile, Altria Group’s ownership of No. 3 NJoy hasn’t resulted in a meaningful market-share increase so far. Nielsen cited a research error by why it did not include an update for NJoy in the latest report. It was at 2.6 percent in the previous report.

    Fontem Ventures’ blu eCigs, an affiliate of Imperial Brands Plc, was unchanged at 1.2 percent.

    The overall e-cigarette category was down 9.9 percent.

    In traditional cigarettes, Philip Morris’ top market share was at 50.6 percent in the latest Nielsen report with top-selling Marlboro representing 45.6 percent of overall market share.

    Meanwhile, Reynolds was at 33.2 percent with Newport at 12.9 percent and followed by Camel (7.8 percent), Natural American Tobacco (3.7 percent) and Pall Mall (3.7 percent).

    ITG was at 8.5 percent overall, although ITG has said its market share is closer to 10 percent. Its No. 7 Winston brand remained at 2 percent, while Kool and Maverick remained tied for No. 8 at 1.8 percent.

    Goldman Sachs analyst Bonnie Herzog said that “in terms of specific company trends, total nicotine sales declines improved across the board for Altria, BAT, Imperial and Juul, while decelerating for all other manufacturers broadly in the latest period.”

    The decline in cigarette sales continues at a strong pace, said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette and health studies.

    “Yet, as Altria results showed and Barclays recently highlighted, much of this is due to cross-category migration,” Sweanor said.

    “People are switching to far lower-risk options. But disposable vaping products appear to currently be the greatest factor in this migration.”

    TD Cowen analyst Vivian Azer said consumers’ cigarette “downtrading to discount and deep discount continues to benefit Imperial’s share trends.”

  • Altria’s ‘Juul Trial’ Begins

    Altria’s ‘Juul Trial’ Begins

    Image: Tobacco Reporter archive

    The trial of San Francisco’s public school system against Altria Group began on Monday, with Thomas Cartmell, a lawyer for the San Francisco Unified School District, stating to jurors, “This case is about Altria, the largest cigarette company in our country, who helped hook a whole new generation of our young people on nicotine, causing a vaping crisis, a youth epidemic,” reports Reuters.

    Beth Wilkinson, a lawyer for Altria, told the jury in her opening statement that the company had aimed to boost sales among cigarette smokers seeking a less harmful option, not among teens. “You can’t forget about those smokers,” she said. “If you can get smokers away from cigarettes, it’s a worthy cause.”

    The school district also sued Juul, which settled that lawsuit last year. Cartmell told jurors that Altria, which was Juul’s largest investor from 2018 until earlier this year, when it exchanged its stake for a license to certain Juul intellectual properties, was “at the heart” of Juul’s strategy to grow its business by appealing to teenagers with sweet flavors and flashy advertising.

    According to Cartmell, Altria made its large investment in Juul after being unsuccessful with its own e-cigarette, and the company knew Juul’s success was driven by youth usage, according to Bloomberg. Juul’s device was “marketed to appeal to the young, cool, popular crowd” and was “packed with nicotine,” Cartmell said.

    Wilkinson argued that evidence would not support this. Juul sales fell after Altria’s investment, and Altria’s investment occurred after Juul pulled most of its flavored products off the market, according to Wilkinson, reports Law.com.

    The San Francisco schools’ lawsuit was chosen to go to trial as a test case.

  • Altria in Talks to Buy Njoy

    Altria in Talks to Buy Njoy

    Image: Tobacco Reporter archive

    Altria Group is in advanced talks to buy e-cigarette startup Njoy Holdings for at least $2.75 billion, the Wall Street Journal reported, citing people familiar with the matter, according to Reuters.

    The Njoy deal could be announced as soon as this week, though the talks could still fall through, according to the report.

    The proposed deal includes an additional $500 million earnout if regulatory milestones are met.

    The potential deal follows Altria’s decision last year to be released from its noncompete deal with Juul Labs almost four years after buying a 35 percent stake in the company. Altria was planning to divest its stake in Juul. As of Dec. 31, Altria valued the stake at $250 million.

    It was reported in July that Njoy had hired bankers for a possible sale of the company. The privately held firm is likely to be valued at up to $5 billion.

    Njoy has a roughly 2 percent of the U.S. vape market by volume, according to Jefferies, Juul, by contrast, accounts for around a quarter of American vapor product sales.

    Unlike Juul, however, Njoy is one of the few vape brands that have permission from the U.S. Food and Drug Administration to continue to sell its products. Juul is waiting to hear whether the FDA will allow its e-cigarettes to remain on the market.

    In June 2022, the agency ordered Juul to remove its products from the market after finding that premarket tobacco product application failed to prove they would “appropriate for the protection of public health.

    The FDA agreed to take another look at Juul’s application after the company appealed the marketing denial order in court. The company can continue selling its products at least until the agency makes a final decision.

    Altria is keen to supplement its income from combustible products with earnings from smoking alternatives, such as e-cigarettes.

    Its cigarette sales volumes fell 9.5 percent last year as high gasoline prices and general inflation pinched smokers’ disposable income.

  • Altria Seeks Juul Settlement Details

    Altria Seeks Juul Settlement Details

    Image: Tobacco Reporter archive

    Altria Group has requested that a federal judge order Juul Labs to turn over details of its settlement with about 10,000 plaintiffs seeking to hold Juul Labs responsible for a youth vaping “epidemic,” reports Reuters.

    Altria stated that the settlement was “shrouded in secrecy” and that Juul refused to share the information with Altria, which in 2018 took a 35 percent stake in the company.

    Altria was not part of the settlement and remains a defendant in mass tort litigation consolidated before U.S. District Judge William Orrick. Plaintiffs allege Altria took part in shaping Juul’s strategy to market e-cigarettes to minors.

    Altria stated that it needs to see the details of the settlement and the negotiations leading up to it in order to evaluate its potential remaining liability and explore potential claims against third parties. Juul’s refusal to share the information “goes far beyond the protections needed to address those concerns, lack[s] any legal basis and would severely prejudice” Altria.

    In a separate motion, Altria requested that Orrick put a hold on a class action suit seeking refunds on behalf of all Juul purchasers nationwide while Altria appeals the order certifying the class. The company said that it would be heavily burdened by continued discovery related to the suit.

  • Tobacco Firms Settle Messaging Dispute

    Tobacco Firms Settle Messaging Dispute

    Several tobacco companies have reached an agreement in long-running litigation brought by the U.S. Department of Justice (DOJ) and certain public health organizations regarding the communication of tobacco-related messaging at retail locations.

    The agreement will require Altria, Philip Morris USA, R.J. Reynolds Tobacco and ITG Brands to supply their contracted stores with court-ordered signs that must be posted for 21 months.

    The agreement covers the last remaining dispute from the lawsuit DOJ filed against Altria, Philip Morris USA and R..J Reynolds in the 1990s, according to the National Association of Convenience Stores (NACS).

    “This litigation has always put the retailers in a uniquely bad position,” said Doug Kantor, NACS general counsel. “Retailers were not parties to the lawsuit and should not be burdened with a court-ordered remedy, but this negotiated outcome avoids even worse results that DOJ and public health groups were advocating.”

    The agreement provides that each store under contract with one of the manufacturers will have to post at least one sign carrying one of 17 different, pre-approved health messages that will be distributed at random to retailers around the country.

    Each store will be required to rotate to a new message halfway through the time period required in the agreement. The manufacturers will be required to hire auditors to check whether the signs are properly posted. A summary of the agreement explaining the requirements on retailers as well as answers to frequently asked questions about it can be found here.

    A hearing on the proposed agreement will be held in the U.S. District Court for the District of Columbia on July 28 and 29. The court will then decide whether to accept the agreement and enter an order to implement it.

    The timing of the requirements for signs to be posted will depend on when the court decides whether to accept the agreement.