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The 'vaping scandal' might secure the dominion of 'big business'

7 min read

27 September 2019

Features Editor, Real Business

It's all over the news that vape products have caused sickness and death – but a number of tobacco giants are using this opportunity to restore their reputation, meaning independent vape businesses will suffer most.

Since the post-war years, enlightened medical advice and research have steadfastly informed consumers that smoking cigarettes is not only bad for your health, but can also be deadly.

This revelation has acted as a sort of grim reaper –  a lingering commercial spook that’s been hovering above the tobacco industry ever since and will, perhaps inevitably, cause its decline.

‘Vaping’ and ‘e-cigarettes’ – an industry timeline

Pharmacist Hon Lik invented the modern ‘e-cigarette.’ Source: vapetrotter.com

So, into this tobacco shaped void came the first ‘modern’ e-cigarettes during the early 2000s – a trend started by Chinese pharmacist and inventor, Hon Lik who entered the sector after witnessing his father die from a smoking-related disease.

However, there is little clarity over what vape products are causing this disease, leaving the issue unsolved.

However, the story of smoking alternatives goes back further than that, with entrepreneurs having experimented with alternative cigarettes since the 1920s.

Helping smokers ‘switch’

Then almost as soon as they came on the open market, it seemed that these alternative cigarettes, smokeless cigarettes, vapes, e-cigs, (call them what you will), were going to save millions of lives by helping smokers switch from smoking tobacco to these non-combustible alternative products.

How will Philip Morris International cope with the vaping news?

Philip Morris International's COO explains its new 'smoke free' direction Read more

The evidence that fewer people around the world are smoking tobacco cigarettes is out there. Statistics from the NHS from last year show that there are 1.8m fewer smokers in the UK compared to seven years prior. This is a global trend too, with many nations seeing an overall reduction in cigarette smoking.

Generational changes…

Is cigarette smoking being wiped out by successive generations? Source: webmd.com

What does this show?

That smoking tobacco is a culture that will be eradicated by successive generations – proving that the future of ‘smoking’ if people are to smoke something, will be in alternative products. Right?

The massive funding these vape brands are receiving from tobacco giants, including all the marketing and CSR powers that come with them, mean they’re likely to survive the ‘vaping scare’ while independents may flounder.

Then big multinational tobacco companies such as Philip Morris International, (read more about their ‘smoke-free’ direction above), started to realise that they had to offer these alternative products or risk extinction.

Yes, this would require a corporate turnaround of titanic proportions, but it would be necessary one all the same.

Health scares and death

It was all looking straightforward, these big companies would transition into alternative products, continue to make money and save their CSR reputations in the process.

But then, recent news coming of the United States may ‘kill’ the vaping dream before it has even really begun.

The lung disease mystery

Over the past few months, a number of people have been diagnosed with a pneumonia-related form of lung disease that health officials are linking to the use of vapes. What’s more, people have died from the disease, with 11 fatalities in the US so far. However, there is little clarity over what vape products are causing this disease, leaving the issue unsolved.

Despite the murky facts underpinning the vaping news, health officials appear to point the blame at THC vapes and ‘flavoured’ e-cigarettes, with US governors, (the Governor of New York) and even entire nations banning their sale, including India and across East Asian, South-East Asian and Middle Eastern countries.

An opportunity to bring ‘big tobacco back’?

Juul, is one ‘vape’ brand, in particular, that’s being affected by these events but not in the way you might think. The company’s CEO Kevin Burns is being replaced by K.C. Crosswaithe from tobacco giant, Altria that owns 35% of Juul. There’s also rumours that Juul’s set to experience mass redundancies and suspension of advertising.

What’s happening here?

So far, the global ‘vape scare’ looks like the perfect opportunity for tobacco giants to encourage scared vapers (who previously smoked tobacco) to switch back to traditional cigarettes, (and/or) use their own vaping products by capitalising on their ‘long-established’ and therefore ‘more trustworthy’ status. And if they take majority ownership of vape brands like Juul – all the better for them.

The power of corporate finance and marketing

Corporate giants such as Altria are using the anti-vaping climate and Juul as their vessel to market (via an impressive cash injection of $12.8bn), to wipe away the appeal of the smaller independent vaping brands out there and paint themselves as the brand(s) to trust.

Furthermore, this situation is not exclusive to Altria and it’s relationship with Juul. Vuse, another e-cigarette brand, is produced by the tobacco giant that produces Camel cigarettes, Reynolds American.

The massive funding these vape brands are receiving from tobacco giants, including all the marketing and CSR powers that come with them, mean they’re likely to survive the ‘vaping scare’ whereas other independents may flounder.

The independents and SMEs take the hit

Into this mix, you’ve also got big pharma brands pushing out nicotine products, such GlaxoSmithKline and its new nicotine spray, which is already available worldwide and has just been approved by the American FDA for sale there.

All this means the ‘little guys’ in the vaping industry are going to get hit. We’re talking flavoured e-cig brands,  independent vaping stores, and pretty much any vape brands that aren’t backed by any of the tobacco giants.

What are they going to do?

Do you own a small vape brand? Real Business wants to hear about your reactions to this developing story and how you’re looking to weather the storm. Get in touch!