Altria Data Shows Anti-Vaping Campaigns Push Older Users Back to Cigarettes

On May 21, news reported that Altria, the manufacturer of Marlboro cigarettes, stated that their data shows that smokers aged 50 and above are returning to traditional cigarettes after switching to e-cigarettes.
 
This trend is reportedly due to negative news, regulatory crackdowns on nicotine vaping, and the (indirect) impact of the coronavirus pandemic.

CEO Billy Gifford revealed this information to investors during Altria's first-quarter earnings call on April 30.

Gifford stated that older, negative consumers are primarily purchasing discounted cigarettes after the ongoing damage to vaping products and the FDA.

Gifford mentioned that in recent months, there has been an increase in the number of smokers aged 50 and above in the cigarette category. He believes these smokers had previously switched to e-cigarettes but have recently returned to smoking due to negative publicity surrounding the e-cigarette category and regulatory developments.

Marlboro's market share in the U.S. cigarette market has dropped by at least half a percentage point to 42.8%, down from 43.3% in the first quarter of 2019. However, the trend of vapers switching to cheaper cigarettes is eroding Altria's retail share.

Nielsen data also indicates that while the increase in cigarette consumption is partly related to stockpiling due to pandemic fears, Altria Group's retail share is declining.

Bonnie Herzog, a managing director at Goldman Sachs, noted in a market research report that Altria Group's Marlboro brand is underperforming in the industry. The market share of e-cigarettes is also declining, particularly in relation to the shrinking market of Juul Labs.

Herzog pointed out that we expect smaller brands, such as Puff Bar, to continue gaining significant share, especially in the disposable e-cigarette sector, which is not affected by the FDA's restrictions on non-tobacco (and) non-menthol flavors.

Factors driving Altria's earnings results include the public health crisis in the U.S., which has also sparked global controversy regarding the harms associated with vaping-related lung injuries and increased use among minors.

The FDA has shaken the U.S. vaping industry by ramping up enforcement actions against e-cigarette manufacturers.

Before a federal court in Maryland ordered the agency to finally implement the PMTA regulatory pathway mandated by the Obama-era Tobacco Control Act, the agency's actions were partly driven by pending litigation.

FDA Commissioner Stephen Hahn stated that, following the court's order, the FDA has now extended the PMTA deadline by 120 days. Many e-cigarettes, cigars, and other new tobacco products are now required to undergo pre-market review by September 9.

Public health organizations worldwide consider e-cigarettes a safer alternative to cigarettes.

England is the first country whose health agency recognizes that regulated e-cigarettes may be 95% safer than cigarettes. The FDA and the CDC also acknowledge that e-cigarette products are theoretically safer than cigarettes.

Greek cardiologist Konstantinos Farsalinos expressed concern about the trend of smokers returning to cigarettes.

He stated that this is unfortunate and indicates a serious misunderstanding and misinterpretation of the significant risk differences between smoking and reduced-harm nicotine products.

Farsalinos added that strict measures need to be taken to ensure that smokers have access to reasonable, fair, and evidence-based information to make informed decisions. This refers to the potential benefits of lower-risk products, such as the e-cigarette category.