Leading U.S. tobacco company Altria Group Inc. is diving fully
into electronic cigarettes, which pose a small but growing
competitive threat to traditional smokes.
The maker of Marlboro cigarettes said Wednesday it plans to
launch its MarkTen e-cigarette nationally starting in the second
quarter after testing the product in Indiana and Arizona in recent
months.
Altria controls roughly half of the $100 billion U.S. tobacco
industry but is playing catch-up in the estimated $1 billion market
for e-cigarettes, battery-powered devices that turn nicotine-laced
liquid into vapor.
Some smokers are switching to e-cigarettes amid growing
scientific consensus that they're less harmful than regular
cigarettes, which release toxins through combustion. But many
public-health groups warn not enough is known about the health
effects of e-cigarettes and authorities are debating how to
regulate them. Annual U.S. consumption of regular cigarettes, the
leading cause of preventable death, has been dropping 3% to 4% in
recent years.
Newport cigarette maker Lorillard, the third-largest U.S.
tobacco company, is the market leader after acquiring the maker of
Blu e-cigarettes in 2012. Camel cigarette maker Reynolds American
Inc., the No. 2 tobacco company, announced last year it would take
its Vuse e-cigarette national by mid-2014 after testing it in
Colorado and Utah.
Blu and the namesake brands of Njoy Inc. and Logic Technology
Development LLC boast a combined market share of about 75% in U.S.
stores for e-cigarettes, although there is broader competition in
online sales.
Altria estimates 90% of adult smokers are aware of e-cigarettes
and about two-thirds have tried them, but that only a small number
use them daily.
"Many adult smokers and vapers are still looking for a product
that meets their requirements and desires," Marty Barrington,
Altria's chief executive, told an analyst conference Wednesday in
Florida, where he announced the broader launch.
Mr. Barrington said MarkTen built up a 48% e-cigarette market
share in Arizona stores in just seven weeks after leveraging its
considerable distribution clout.
Altria also announced earlier this month that it would pay $110
million to acquire Green Smoke Inc., which sells its namesake
e-cigarettes mostly over the Internet. That deal is expected to
close during the second quarter, widening its e-cigarette
portfolio.
Write to Mike Esterl at mike.esterl@wsj.com
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