A study published in JAMA Pediatrics found that e-cigarettes contributed to teenage nicotine addiction. E-cigarettes, which e in flavors like cherry, strawberry, and cookies & cream, are less harsh than cigarettes, making it easier for adventurous teenagers to pick up the habit. Moreover, the study showed that current smokers who had never used e-cigarettes were more determined to quit than those who had used e-cigarettes. Although scientists are far from reaching a consensus on the issue, these findings could put a damper on e-cigarette growth.The Food and Drug Administration has not yet released prehensive guidelines for e-cigarette regulation, but many states and municipalities are already clamping down on the tobacco-free devices. Bills in New York, Oregon, New Jersey, Washington, and a number of other states have proposed taxing and regulating e-cigarettes like other tobacco products.
High taxes, marketing restrictions, and public awareness about the health risks associated with smoking tobacco have led to a long-term secular decline in cigarette consumption in the U.S. The same factors could put a lid on e-cigarette growth.Altria has the most to lose from e-cigarette growth. It was the last of the big three U.S. tobacco panies to announce a nationwide rollout of its e-cigarette brand, and its 50% share of the U.S. cigarette market gives it a dominant share of the industry’s profits. Stunted e-cigarette growth would reaffirm Altria’s dominant position in the industry.Reynolds is in the same boat as Altria. Its Vuse e-cigarette has yet to gain wide adoption, while its Camel and Pall Mall brands bine for a 17.8% share of the cigarette market. All of the pany’s brands bine for a 26% share of the cigarette market.
Its revenue is largely dependent on Newport menthol cigarettes; Newport mentholated and non-mentholated accounts for 85% of Lorillard’s cigarette volume. Given pending legislative restrictions on menthol cigarettes, Lorillard’s small but growing e cigarette business is an important source of diversification.Nobody knows how e-cigarettes will be regulated; the rules have yet to be drawn up.Lorillard, on the other hand, stands to gain a meaningful new source of revenue if it can maintain a dominant share of a growing e-cigarette market.