Altria: Illicit Disposable Vapes Impacting NJOY Sales

Altria says a booming illegal disposable flavored vape market is causing a major decline in the sales of its authorized vaping products.

Sal Mancuso, Altria’s CFO, pointed out on a call with select media and financial analysts that traditional cigarette industry volumes had dropped even more than usual in the third quarter. The decline was caused by inflation and economic issues influencing customers, as well as the heightened usage of illegal flavored disposable e-cigarettes.

Mancuso further stated that there appeared to be more switching between different categories than initially assumed and that e-cigarettes alone were causing a 1.5 percent to 2.5 percent reduction in traditional cigarette industry volumes.

BAT subsidiary R.J. Reynolds Vapor Co. holds the top market share in the U.S. at 41.8 percent as of the latest Nielsen convenience store report released Oct. 7.

NJOY, which Altria purchased for $2.75 billion in June, has struggled to increase its No. 3 market share.

“The current state of the (vaping) market is intolerable for both legitimate manufacturers and consumers,” Billy Gifford, Altria’s CEO, said during the call. “As we have noted repeatedly for months, the regulated market is being overrun by illegal-flavored disposable e-vapor products made and distributed by companies violating virtually every rule and guidance FDA has issued since 2016.

“A lot of these products are imported. They’re imported illegally and then they’re sold illegally.”

Saying a “strong course correction is needed,” Gifford noted that Altria has filed federal lawsuits in California against 34 organizations that include manufacturers, distributors and online retailers.