Marlboro Maker Is Pulling Pod-Based Cigarettes From the US Market

Tobacco giant Altria Group—the parent company of Philip Morris USA, and the manufacturer of Marlboro brand cigarettes—has announced their plan to stop selling specific vaping products until federal US regulators address “the youth issue.”

You may not be aware, but vaping products have been growing in popularity among youth and teens.  Current data suggests as many as 2 million middle and high school teenagers, and older teens in college, are presently using battery-powered vaping devices to heat liquid-based nicotine into a vapor for inhaling.  More specifically, the 2017 National Youth Tobacco Survey (which was released in June 2018) shares that roughly 12 percent of high school students have vaped within the past month.

While tobacco use among youth and teens does seem to be lower than previous generations, there has always been concern over their use. Medical professionals, specifically, are worried that vaping can lead to nicotine addiction as well as further tobacco use.

More specifically, Altria Group is putting a pause on sales of several items:

  • MarkTen Elite pod-based vaping products
  • Apex (by MarkTen) pod-based vaping products
  • Any/all flavored variants of Green Smoke and MarkTen “cig-a-like” vaping products (except tobacco, menthol, and mint-flavor varieties)

According to a transcript from FactSet, Altria Chief Executive Howard Willard said, to analysts, “Although we don’t believe we have a current issue with youth access or use of our E-vapor products, we are taking this action because we don’t want to risk contributing to the issue. Additionally, we will support federal legislation to establish anyone as the minimum age to purchase any tobacco product.”

It is important to distinguish that pod-based vaping products have been consistently criticized for having being stronger (in terms of nicotine density) than regular e-cigarettes.  Actually, they warn, pod-based e-cigarettes are nearly comparable to traditional “combustible” cigarettes in terms of the speed by which they deliver the nicotine. Critics are also not a fan of the wide variety of flavors—from bubble gum to strawberry—which are more attractive to kids.

Wells Fargo analyst Bonnie Herzog advises, “We view Altria’s proactive decision to remove MarkTen Elite & Apex pod products and to restrict its cig-a-like product flavors pending a market order from the FDA or clarity on youth access as positive.”

At the same time, Altria also reminds that approximately 80 percent of its third quarter e-cigarette volume will remain for sale on the market in the United States, even after removing these pod-based products.