Are E-Cigarettes Impacting Big Tobacco?

E-Cigarette manufacturer Green Smoke was recently purchased by the Altria Group, adding more evidence to the trend that E-Cigarettes are having an impact on the big tobacco industry. The acquisition by Altria Group, which oversees NuMark, Phillip Morris and U.S. Smokeless Tobacco, Co., is the latest in what appears to be a pattern of tobacco giants purchasing e-cigarette merchants.

In April 2012, Lorillard of Greensboro, N.C., purchased Blu while tobacco behemoth R.J. Reynolds launched its own brand, Vuse, last summer. British American Tobacco followed suit with its version, Vype, last summer to become the first e-cigarette brand in the United Kingdom.

E-Cigarettes Too Successful for Big Tobacco to Ignore

Given the popularity of e-cigarettes – Green Smoke grossed $40 million in sales in 2013 – Altria’s acquisition, as well as its competitors’, makes sense. Traditional tobacco companies have seen sales consistently wane in recent years for a number of reasons – health-related, image-related, rising costs. Additionally, advocates of e-cigarettes attest they are healthier and very effective in helping traditional smokers quit.

Changes Ahead for E-Cigarettes

In a recent article on ConsumerAffairs.com, Altria Chairman and CEO, Marty Barrington is quoted using terms such as ‘e-vapor’ and ‘vaping.’ The use of such lingo is an attempt by big tobacco companies to root out the stigma connected to cigarettes. Said Mr. Barrington:

“Adding Green Smoke’s significant e-vapor expertise and experience, along with its supply chain, product lines and customer service, will complement NuMark’s capabilities and enhance its competitive position.”

E-Cigarettes Are Here to Stay

E-Cigarettes are a high-risk industry which accounted for an estimated $1 billion in revenue in 2013. Instabill has provided merchant account solutions to high-risk industries for more than a dozen years and currently serves as the payment gateway for several e-cigarette businesses worldwide. Open your e-cigarette merchant account today by clicking below or calling 1-800-318-2713.

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