By Angela Garrity
The Daily Mail reports that vaping has wiped more than ￡100billion in value from big tobacco this year. The value of the five largest tobacco companies has been declining due to the rise of vaping and increased regulation.
British American Tobacco (BAT) has been the hardest hit of its stock market worth, losing about half of its value. With more than half of its sales coming from menthol cigarette sales, the FDA November announcement of a potential upcoming ban on menthol cigarettes, would generate to a disastrous upcoming year for the tobacco giant.
Imperial Brand saw a decline in value of around a quarter while Altria and Philip Morris lost around 30 percent.
Japan Tobacco is a fifth lower, following a shift in consumer tastes which saw a spike in the vaping popularity.
RBC analyst James Edwardes Jones told the Daily Telegraph: ‘The impact of the FDA’s menthol cigarette ban and margin erosion from the growth in next-generation products is priced in, although for this previously uber-defensive and predictable stock the future is very opaque.’
The news comes after an experiment by Public Health England exposed how much worse it is to smoke cigarettes than to vape, in the hope of encouraging thousands to kick the habit. Read that story here.
FDA Commissioner, Scott Gottlieb announced plans to meet with CEO’s of e-cigarette companies to discuss their commitments to help stop a rise in teen vaping. Gottlieb suggested via Twitter that “some executives have backed down from their commitments and indicated he will be sending letters asking the CEOs of these companies to meet to ‘discuss commitments they made last month, and why some are changing course’. The vaping community that supports harm reduction for adults should also focus more of their efforts on select manufacturers that are primarily responsible for the youth epidemic if, like [FDA], they seek to preserve these opportunities as a way to transition adult smokers.”