Tobacco companies are not going to give up on smokers. To help offset the loss from their traditional cigarette smokers, they are making electronic cigarettes.
Starting in August, tobacco giant Altria Group, the parent company for Philip Morris USA will be offering their first electronic cigarette line under the MarkTen brand in Indiana.
The e-cigarette, made in China by a contract manufacturer, is expected to sell for about $9.50. Prices for additional cartridges and recharging kit are not available at this time. The liquid for the cartridges is being produced in the U.S.
Consumers will have the option of disposable or rechargeable models, and classic or menthol flavors; the experience, executives said, “closely resembles the draw of a cigarette.”
Electronic cigarettes, also known as e-cigarettes, deliver an experience similar to standard cigarettes by heating liquid nicotine in a disposable cartridge and producing a vapor that can be inhaled. Smokers can buy additional cartridges, often at cheaper prices compared with traditional cigarettes.
Experts say electronic cigarettes are less harmful than traditional cigarettes because they deliver a nicotine rush without the tar and other chemicals found in standard smokes.
Altria Group is the last of the nation’s major tobacco companies to market an electronic cigarette in an industrywide push to diversify beyond the traditional cigarette business, which has become tougher in the face of tax hikes, smoking bans and health concerns.
The move comes after Altria’s first-quarter U.S. sales volume tumbled 5.2 percent, with top-selling Marlboro cigarettes slipping 5.5 percent.
“Altria sees the growth rate, sees the opportunity, and if it doesn’t get in soon, it really could get outflanked by its biggest competitors,” said Bloomberg Industries analyst Kenneth Shea.
“This industry is in decline, whether people want to admit it or not,” said Jack Russo, an analyst with Edward Jones and a tobacco industry expert. Electronic cigarettes, he said, offer tobacco companies a rare opportunity to introduce new products – something they have largely been prevented from doing in recent years by the government – and “maybe look like the good guys for a change.”
Altria brands include Marlboro cigarettes, Skoal smokeless tobacco and Black & Mild cigars.
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