A backlash against vaping in US has dented revenue growth at the cigarette-maker British American Tobacco.
BAT said revenues in its “new category” arm – which includes vaping – would grow at the lower end of its previously announced range of 30% to 50% for the 2019 financial year.
The overall US vaping market has declined by about a quarter, according to Tadeu Marroco, BAT’s finance director, since the health concerns emerged centred on sometimes fatal lung injuries. Those concerns, as well as others about underage vaping, were enough to catch the attention of Donald Trump.
Is it true that e-cigarettes have caused deaths in the United States?
There have been six confirmed deaths connected to vaping across the US – in California, Illinois, Indiana, Kansas, Minnesota and Oregon – as well as more than 450 cases of reported lung problems.
What have the authorities found out so far?
The federal government’s CDC (Centers for Disease Control) says no specific substance or single type of device has been linked to all cases. But in most cases – about 80% – people have said they were using liquids that contained cannabinoid products, such as tetrahydrocannabinol (THC). Most of those are said by the Food and Drug Administration (FDA), which is investigating with the CDC, to also contain a substance called vitamin E acetate. It appears some people may have bought their e-cigarettes or other devices off the street.
What is the advice in the US?
The CDC is suggesting anyone who vapes should consider stopping during its investigation. Young people and pregnant women should not use e-cigarettes at all, it says. It advises people who are using e-cigarettes to try to stop smoking to consider other methods, such as counselling or medication.
Is vaping dangerous?
It depends who you talk to. Public Health England and most, but not all, of the public health community in the UK say it is not dangerous. PHE is on record as saying it is 95% safer than smoking – which kills half of all of those who take up the habit. UK scientists and campaigners are focused on e-cigarettes as a way for adults to quit smoking.
In the US, however, there is far more interest in the chemicals contained in e-cigarettes and the possibility of any toxicity. Experts are not convinced that e-cigarettes can help people stop smoking and talk of potential harms and unknown risks rather than possible benefits.
The absence of regulation in the US means there is no cap on nicotine levels in e-cigarette liquids, making stronger doses more addictive. The UK has a strict limit, thanks to an EU directive now enshrined in British law.
Sarah Boseley Health editor
Speaking on a call with investors, Marroco said: “We saw a reduction in terms of sales to retail. The problem that we find in the vaping [in the] US was driven by both consumer uptake and consumer confidence.”
He added that early data appeared to show a partial recovery in vaping sales in November.
Shares in BAT gained more than 2%, however, as investors welcomed strong sales of traditional cigarettes in the US and globally.
The FTSE 100 company earns the majority of its revenues from traditional cigarettes, including the Lucky Strike and Dunhill brands. However, it and other tobacco companies have sought to capitalise on a boom in cigarette alternatives, particularly in wealthy markets such as the US and the UK, where users have turned towards products they deem to be less likely to harm them. Tobacco kills more than 8 million people worldwide each year.
In September, BAT announced plan to cut 2,300 jobs by 2020, as it prepares to shift away from cigarettes. Its flagship vaping product is Vype; it also sells tobacco heating products and oral products. Competitor products include Juul, which is part-owned by Altria, the maker of Marlboro cigarettes.
Vaping products, which deliver nicotine via an aerosol rather than smoke, have faced a backlash as the technology has come under increased scrutiny. While the products do not expose users to the tar and some other harmful substances contained in traditional cigarettes, the longer-term effects are unclear.
The US Centers for Disease Control and Prevention last week identified 2,290 cases of lung injuries associated with vaping in US states and territories, as well as 47 deaths. Most of those were linked to products to which users had added THC, one of the active ingredients of cannabis.
In September, Trump said his administration would propose the Food and Drug Administration (FDA) ban on all flavoured electronic cigarette devices amid concerns about a surge in underage vaping.
Marroco told investors the FDA’s position was “still very uncertain”. In a separate written statement, BAT’s chief executive, Jack Bowles, said the controversy in the US should lead to a better and stronger regulatory environment, in which “we are well placed to succeed”.
