USA. Altria Group – owner of cigarette brands including Marlboro and Chesterfield – has made a US$12.8 billion investment in Juul Labs, the US market leader in e-vapour products. It gives the US tobacco giant a 35% stake in the Juul business, valuing the latter at US$38 billion.
Altria said that its investment in Juul strengthens its financial profile and enhances growth prospects. It will apply its logistics and distribution experience to help Juul expand its reach and efficiency and give the e-vapour specialist the option to be supported by Altria’s sales organisation, which covers approximately 230,000 retail locations.
In a statement, Altria Chairman and Chief Executive Officer Howard Willard said: “We are taking significant action to prepare for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes, by investing US$12.8 billion in Juul, a world leader in switching adult smokers.
“We have long said that providing adult smokers with superior, satisfying products with the potential to reduce harm is the best way to achieve tobacco harm reduction. Through Juul, we are making the biggest investment in our history towards that goal.”
According to Altria’s research, rapidly-growing Juul – which currently operates in eight countries – represents approximately 30% of the total US e-vapour category.
Following the investment, Juul will remain fully independent, and the company’s Chief Executive Officer Kevin Burns said: “Altria’s investment sends a very clear message that Juul’s technology has given us a truly historic opportunity to improve the lives of the world’s one billion adult cigarette smokers.
“This investment and the service agreements will accelerate our mission to increase the number of adult smokers who switch from combustible cigarettes to Juul devices.”
Footnote: The Moodie Davitt Report will be devoting significantly increased attention to non-combustible and reduced risk tobacco products (RRPs) in 2019. Look out for major news and a follow-up feature on the latest developments for Philip Morris International’s IQOS heated tobacco technology, coming soon.
