Revealed: Implications of tobacco giants Philip Morris and Altria’s $200bn merger

Merger talks have continued between Philips Morris International and Altria, potentially creating a tobacco giant with a market value of over $210bn. The merger talks come as tobacco groups are looking to build out their presence in electronic cigarettes. In December 2018, Altria agreed to take a 35 per cent stake in e-cigarette group Juul Labs last year for $13bn. The move was the largest investment ever in a US-based venture-backed company.

With tobacco companies looking to spend such a vast amount on e-cigarettes, it is evident that this element of the market is hugely disruptive. Recently, the ONS has released its report on smoking and e-cigarette use for 2018. It has revealed that 6.3% of all over 16s in the UK in 2018 were e-cigarette users, otherwise known as vapers. This breaks down as 7.7% of men and 5% of women; an increase of 0.8% from 2017. 52.8% of respondents said that they use e-cigarettes as an aid to stop smoking, an increase from 48.8% and a five-year high. This comes as the survey reveals that 92.2% of vapers had started smoking before trying an e-cigarette.

Simon Manthorpe, CEO of Vapemate said, “A £6bn strain on the NHS and being the main cause of 80-90% of small cell and non-small cell lung cancers demonstrates the cost of smoking in our society. Furthermore, an ever-increasing body of research continues to serve as a reminder to the nation of the dangers of smoking on our and our loved one’s health. Solutions such as vaping can relieve both the financial strain of tobacco addiction, but can also serve as an aid to help rid the nation of one of our deadliest vices. For this reason, it is abundantly clear as to why the huge tobacco corporations are looking towards increasing their market share in e-cigarettes.

The ONS report demonstrates how many people appear to be benefiting from using e-cigarettes as a quitting aid. The downward trend of smoking is a positive one with 14.7% of the adult population smoking in 2018, down from 15.1% in 2017 which was a further decline on the figures from 2011, which stood at 20.2%. We hope that greater education and support around using e-cigarettes responsibly is given to help smokers quit for good.”