JUUL Cedes U.S. Market to BAT
According to The Motley Fool, the removal of Juul products from shelves will hand the U.S. market to British American Tobacco. Partly owned by Altria Group, Juul had long been the undisputed leader in vaping, holding nearly 80 percent market share at the
According to Motley Fool, the removal of Juul products will hand the U.S. market over to British American Tobacco (BAT).
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Juul, partially owned by Altria Group, has long been the undisputed leader in e-cigarettes, holding nearly 80% market share at its peak. The latest Nielsen data shows Vuse's share at 35.1%, Juul's share at 33.1%, and NJOY in third place with a 3.1% share.
Last year, the U.S. International Trade Commission ruled that Philip Morris International's IQOS heated tobacco device infringed on BAT's patents, leading to a ban on its import and sale in the U.S. Altria's collaboration with PMI to market and distribute IQOS in the U.S. was disrupted by this ruling.
As Altria shelved its MarkTen e-cigarette brand to support its collaboration with PMI, the ITC ruling left it without any vaping products. The FDA's ruling has hit Altria hard. In 2018, Altria invested $12.8 billion for a 35% stake in the vaping company. By the end of Q1 2022, Altria had reduced the fair value of its Juul position to just $1.6 billion.
If the FDA successfully eliminates Juul, BAT will face virtually no obstacles in its path to market dominance.
In the second half of last year, Vuse became profitable for BAT in the U.S., and its share grew as it discounted devices and consumables to attract users. Earlier this month, British American Tobacco announced it is now ready to raise prices on both. With major competitors being removed from the market, this should lead to significant profit growth for the company.
British American Tobacco's vaping revenue grew 59% last year, reaching £927 million ($1.14 billion), while sales of its heated tobacco products sold under the Glo brand increased by 46%, reaching £853 million.
