Four Major Tobacco Companies: Accelerating The Layout Of Refillable E-Cigarettes And Heated Tobacco Devices

On January 28th of this year, the UK government under Rishi Sunak announced a comprehensive ban on the sale of disposable e-cigarettes. These devices are closed, non-refillable, and non-rechargeable types of e-cigarettes. The ban aims to address the issue of nicotine addiction among minors, with the prohibition expected to be fully in place by April 2025.

 

The UK is the world's second-largest e-cigarette market, and the sudden ban on disposable e-cigarettes has forced the four major international tobacco companies-Philip Morris International, British American Tobacco, Japan Tobacco, and Imperial Brands-to make strategic adjustments to adapt to the changing regulatory landscape in the UK.

 

Philip Morris International: Promoting Refillable and Heat-Not-Burn Devices

 

In response to the UK's ban on disposable e-cigarettes, John Rennie, the Commercial Director of Philip Morris International (PMI) for the UK and Ireland, mentioned that retailers must seize this critical moment in the UK market and adjust their nicotine category strategies accordingly. Specifically, PMI is focusing on promoting refillable e-cigarettes and heat-not-burn devices.

 

On August 6th, PMI launched a new refillable e-cigarette, Veev One, in the UK, priced at £8.99 for the kit. Rennie expressed confidence in the market potential of Veev One:

"At this crucial moment of change in the vaping industry, we are delighted to bring Veev One to the UK market. As the UK market evolves, Veev One, as a high-end, responsible, and recyclable e-cigarette, will stand out, building on its success in the European market."

Rennie also emphasized the company's heat-not-burn product, IQOS Iluma. In this regard, PMI launched a digital trade engagement platform, HEATWAVE OPEN, aimed at providing online support for convenience retailers selling the IQOS heated tobacco devices.

 

Silviu Miron, PMI's UK and Ireland Commercial Planning Director, added:

"We recognize that at this pivotal moment in the UK market, digital platforms like HEATWAVE OPEN play a crucial role in supporting retailers. HEATWAVE OPEN provides retailers with the tools, resources, and products they need not only to navigate this transition but to thrive in the emerging smoke-free era."

 

British American Tobacco: Ban "Useless," Supports New Tax Policy

 

When the ban was initially announced, British American Tobacco (BAT) CEO Tadeu Marroco expressed skepticism, stating that banning disposable e-cigarettes would not be "useful" and raising the smoking age could have "unintended consequences." Marroco pointed out:

"In other countries, this policy has not worked well. Australia implemented a total ban, but youth purchases on the illegal market increased significantly, and the same happened in Brazil."

 

Marroco also stressed that the company's products are "primarily aimed at adults," and that they are "very cautious" in response to the surge in e-cigarette use among UK teenagers.

Despite Marroco's doubts about the effectiveness of the ban, he supported the new UK e-cigarette tax policy introduced in March this year. Given that illegal products occupy nearly a third of the UK market, he believes the new tax policy will help crack down on illegal products and allow BAT to gain market share.

 

In response to the changes in UK e-cigarette policies, BAT continues to focus on new tobacco products. The company has invested £30 million to establish an innovation center at its global R&D headquarters, dedicated to researching modern oral nicotine pouches, e-cigarette liquids and flavors, heated products, and new products beyond nicotine.

Additionally, BAT has taken steps on the retail front, planning to introduce vending machines in pubs and bars by the end of June to sell e-cigarettes and nicotine pouches, thereby boosting product sales.

 

Japan Tobacco: Expanding Market with Heated Tobacco Devices

 

Japan Tobacco (JT)'s new product growth in the UK is driven by heated tobacco, particularly the "Ploom X Advanced" device. According to the company's first-half 2024 financial report, the "Ploom" brand has expanded to 21 global markets, with the UK being one of the key markets. Local suppliers reported that since "Ploom" launched in the UK in September last year, its market value in the heated tobacco category has nearly doubled, with an annual growth rate of 8.9%.

 

In response, Japan Tobacco confirmed in June that it would expand the sales of the "Ploom X Advanced" device and "Evo" tobacco sticks to retailers in Glasgow and Sheffield, marking their first sales channels outside London, as part of the company's broader UK market expansion.

 

Mark McGuinness, Japan Tobacco's UK Marketing Director, commented:

"Ploom has seen significant growth over the past 12 months, and we have ambitious plans to extend this momentum to independent convenience channels outside London in 2024. By 2027, as more consumers seek heated tobacco devices that offer a similar experience to traditional tobacco without combustion, the market value of the heated tobacco category is expected to reach £400 million."

 

Similar to PMI, Japan Tobacco's UK division has launched a new online retail platform called "JTI 360," providing retailers with instant access to news updates and price lists.

 

Imperial Brands: Implementing Recycling Programs and Launching Refillable E-Cigarettes

 

As early as December last year, Imperial Brands had expressed its views on the impending ban, arguing that disposable devices should not be completely banned but rather that existing laws should be more rigorously enforced, with harsher penalties for violations of age-related sales laws.

 

A week before the ban was announced, Imperial Brands launched the Blu Bar 1000, a disposable e-cigarette with 1,000 puffs. Yawer Rasool, the company's UK and Ireland Consumer Marketing Director, stated at the time that demand for disposable e-cigarettes had been high in recent years, and the new device was introduced to meet retail demand.

Following the formal announcement of the ban on disposable e-cigarettes, Imperial Brands quickly took action. The company publicly supported stricter e-cigarette regulations.

 

Lindsay Mennell Keating, Head of Corporate Legal Affairs for the UK and Ireland at Imperial Brands, said, "We have been calling for stricter e-cigarette regulations for many years. We are pleased that they have finally recognized the need to regulate the market to keep up with its development."

 

It is reported that Imperial Brands has implemented a new recycling program applicable to all e-cigarette products, while also encouraging retailers and consumers to responsibly dispose of disposable products.

 

Additionally, refillable e-cigarettes are a key product for the company in the UK. In late July, Imperial Brands launched a new Blu Bar e-cigarette device, with each pod providing 1,000 puffs and priced at £5.99. Yawer stated,

"We believe the Blu Bar e-cigarette kit will offer lucrative sales opportunities for wholesalers and retailers, while providing them with an alternative revenue stream before the proposed disposable e-cigarette ban is implemented."

 

References：

1) Philip Morris pushes IQOS ahead of vape ban

2) Philip Morris unveils new HEATWAVE OPEN digital trade engagement platform

3) Imperial Brands calls for more targeted vaping regulation to prevent youth access and the rise of illicit vapes