Big Tobacco Invests Big In Vaping, What’s The Effect?
We have all seen the headlines announcing Altria’s $12.8 billion dollar investment in JUUL. This makes Altria 35% owners of the biggest brand in all of vaping. While JUUL has had its battles in the media and among the vaping community for a myriad of reasons, it’s new relationship with big tobacco has collectively turned the eyes of investors and other old school tobacco brands into the world of vaping.
While many see this as a positive due to the new power of lobbying siding with the interest of the vaping industry others see this as a potential killer for smaller brands who cannot compete with the branding and advertising budgets of these behemoth companies. So what are the direct effect to the average vaper who might not be a JUUL consumer but enjoys other smaller brands? Plenty.
Many of these effects hedge on what exactly gets lobbied for, is it towards limiting the size of the manufacturers in the industry or is it for relaxing some of the laws that might be crippling and forcing smaller manufacturers to close shop. Within the past two years since the FDA started its regulation of the industry we’ve seen a number of brands shut down, we’ve seen manufacturers publicly complain about how restrictive the price of operating has become. Others have taken their operations out of the country into more vape friendly markets that aren’t as anti-vape.
“Within the past two years since the FDA started its regulation of the industry we’ve seen a number of brands shut down, we’ve seen manufacturers publicly complain about how restrictive the price of operating has become.”
Another factor here is whether this is the start of a trend of buying into or buying up brands and freezing or enforcing full MSRP. For those who have been around the vaping industry long enough they can recall the days where 30ml bottles of liquid commanded prices averaging $20, while those days are long gone and liquids can be purchased as low as 5 cents a milliliter forcing those brands out of business and taking a premium approach and making premium brands even more accessible can be disasterous to consumers looking for brand options and budget friendly pricing. Tack on inflated taxation to replace the loss of tax revenue generated by traditional cigarettes and it’s going to be extremely hard to compete and remain in business as a small operation.
Another potential fallout here is the cost of bringing new products to market or keeping existing ones in the marketplace can potentially become even more crippling. As it currently stands the PMTA process and the approval of the FDA to remain on the market is already pretty excessive especially for brands that focused on being budget friendly who simply don’t have the same kind of revenue or war chasts of bigger and more popular brands. Companies absorbed by big tobacco brands don’t have this worry as its just the cost of doing business.
Personally for vapers there is an underlying anger and a justifiable one. Many of us spent small fortunes on our cigarette addiction and divorced this relationship by switching to vaping. Now being forced back into this relationship with these brands is not just insulting but also upsetting, it starts feeling like the same companies we escaped are now finding a way to continue to feed off us by any means.
So while there are pros and cons to this new reality, being vocal, active, and supporting the brands you love is how you can take a stance. Vaping itself is a multi-billion dollar industry and while once it was purely a smoking cessation or smoking alternative industry it is now big business that may lose it’s identity, it’s purpose, and exile those who helped it blossom.