Big Tobacco & Big Pharma vs Vaping (Part 2)

(This is part two of a multi-part series delving into the vaporizer and e-cigarette industry. Part one can be found here. Part three can be found here.)

Two of the biggest threats to the vaping community are Big Tobacco and Big Government. In this part of the series I will discuss Big Tobacco vs vaping.

One of the biggest threats to Big Tobacco is that so many are turning to e-cigarettes because we can adjust our nicotine dosage, pick from a wide variety of flavors that taste way better than a cigarette, as well as it being way more cost effective. Technically, if one really wants to, they can even produce their own e-liquid as all you need is Vegetable Glycerin, Propylene Glycol, Nicotine (optional), and the flavoring liquid you want it to taste like, mix it to proportions you desire, and then steep it for a while.

If you so choose to make your own e-liquid, there are calculators online to assist you. We refer to vaporizer systems that allow you to change your coils and flavors easily as “open systems.” Open systems allow you to use any of the thousands of flavors from the hundreds of e-liquid brands out there, or even use your own you mixed. In fact there is so much competition that the price of e-liquid has been steadily declining over time. Compared to closed systems in which the e-liquid comes in sealed cartridges, or is the entire e-cigarette, which has to be disposed of when finished. Closed systems can be more costly than an open system as you can only use that single manufacturers cartridges in your device.

How exactly is vaping a threat to Big Tobacco? Let’s crunch some numbers:

  1. In 2013, Big Tobacco saw their largest decline in cigarette shipments since 2009, and many financial analysts stated the cause of that decline was e-cigarettes. In 2012, Americans bought more than 14 billion packs of tobacco cigarettes and 200,000 e-cigarette packs, whilst in 2013 sales of cigarette packs decreased by 1 billion, and e-cigarette sales doubled.
  2. Wells Fargo Bank has estimated that sales of cigarettes will decline by 68% in the next 10 years, whilst e-cigarette sales will increase over 13 times.
  3. One other interesting fact is that Big Pharma is also being affected as Glaxo Kline Smith, the makers of Nicorette Gum, had a memo leaked showing they are lobbying for stricter regulations on e-cigarettes which compete against smoking cessation products. This is a great example of how regulations can be used by big businesses to squash competition from smaller entities.

What’s most fascinating about the vaping market is that it’s comprised predominantly by small- to medium-sized businesses, a lot of which are mom and pop shops. Even a lot of the device manufacturers are small- to medium-sized businesses, compared to just a handful of tobacco cigarette manufacturers.

It’s no wonder the Big Tobacco companies are trying to muscle their way into this market now, due to closed systems such as Blu e-cigarettes. It seems the Tobacco industry is learning the old saying, “If you can’t beat them, join them.” Lorillard purchased Blu for $135 million in April of 2012; British American Tobacco bought CN Creative; Imperial Tobacco made a deal with Hon Like, the Chinese inventor of modern e-cigarettes; Japan Tobacco bought Zandera, who manufactures E-Lites.

But these closed systems are more costly as previously mentioned, and they are merely looking for ways to make recurring income on a device whether it’s making the device itself disposable like the e-cigarette or sealed cartridges for a device. This limits users’ freedom of choice versus the current open system I and others in the vaping community enjoy. Not to mention these “cigalike” devices produced by Big Tobacco are less effective in getting smokers to switch to vaping compared to open system and higher power vapor products. Combined with the upcoming FDA Deeming Regulation I will discuss in Part 3 of this series, Big Tobacco is poised for a monopoly or oligopoly situation in the vaping industry, but with an inferior product.

Sources:

  1. “Tobacco Control in California, 2007-2014: A Resurgent Tobacco Industry While Inflation Erodes the California Tobacco Control Program” by the Center for Tobacco Control Research and Education, University of California, San Francisco School of Medicine.
  2. “Glaxo Memo Shows Drug Industry Lobbying on E-Cigarettes”
  3. “Tobacco companies lost the fight against new e-cigarette regulations — in 2009” (6 May 2016)
  4. “New Studies Find Open System Vaping Offers Better Chance to Quit Smoking Than Cigalikes” (23 June 2015)

This post was written by Alon Ganon.

The views expressed here belong to the author and do not necessarily reflect our views and opinions.

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Knowledge of Mac, GNU/Linux, Windows but preferring to use GNU/Linux. Bitcoin user and expert, Cyber Punk, Minarchist libertarian, Businessman, Firearm lover, Constitutionalist, and a supporter of Free, Libre, and Open Source Software (FLOSS).Businessman and IT Contractor by trade available for hire. Specializing in Medical, Dental, and Small Business IT solutions https://alonganon.info

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