The Marlboro brand owns nearly 40 percent of the cigarette market share.1 Marlboro is owned by Philip Morris, which in turn is owned by Altria. Altria also owns U.S. Smokeless Tobacco, makers of Copenhagen and Skoal chewing tobacco. In December 2018, Altria announced a $12.8 billion investment in Juul Laboratories, in exchange for 35 percent ownership in the company.
The acquisition also promised Juul services to accelerate the mission of the e-cigarette (e-cigs) company.2 With a declared mission to change “the lives of the world's 1 billion adult smokers by eliminating cigarettes” and develop Juul to be “a satisfying alternative to cigarettes,”3 it may come as no surprise the company has garnered the vast majority of the e-cigarette market.4
Unfortunately, this is being achieved on the backs of children, the tobacco industry's prime target market. If you have an addictive product, the best markets are those who will purchase it longer — or those with the longest life expectancy.
In other words, it costs more to acquire a customer who is 65 and may smoke for 15 years, as opposed to a 15-year old-who may smoke for 40 years before succumbing to an early death.
The rising number of children using e-cig vaping devices, especially the USB-shaped Juul products filled with fruit and candy flavored nicotine liquid, has been the focus of Scott Gottlieb since becoming the U.S. Food and Drug Administration (FDA) Commissioner in 2017.5 As he prepares to resign, Gottlieb expressed anger at how the industry has continued its long career of lying.
Rising Rates in Tobacco Target Market Trigger Threats From FDA Commissioner
At a recent meeting at the Brookings Institution,6 Gottlieb described how Altria, one of the world's largest producers of tobacco products, including brands like Philip Morris, U.S. Smokeless Tobacco and John Middleton, went back on their promise to withdraw pod-based products from the market.
In a 15-page response to the Commissioner's7 plan to address the vaping epidemic, Altria promised to hold pod-based sales for FDA approval. They withdrew some of their products but then acquired Juul months later in a $12.8 billion investment. Gottlieb commented at Brookings, saying:8
“It was a difficult meeting … It concerned me that a company that affirmed what we believe, which is that the pod-based flavored products are driving youth use, went so far as to take the product off the market and publicly make that statement … then made a substantial investment that also guaranteed that they're going to expand the market share of the leading pod-based flavored products that'd been used by children.
There seems to be a disconnect. I assume it's just a business decision they made to withdraw a product that didn't have good market penetration and go on to make an investment in a similar product that did have the market penetration.”
Data from the Centers for Disease Control and Prevention's (CDC) National Youth Tobacco…
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