Phillip Morris International Inc. is the world’s largest publicly traded tobacco company. Responsible for many brands including being the manufacturer and seller of Marlboro cigarettes, even they are feeling the effects of electronic cigarettes hitting mainstream status.
Tobacco companies, particularly Phillip Morris International Inc., have begun to acknowledge the fact that tobacco cigarette sales are being impacted by the rise of electronic cigarettes as the population changes. While they are making note that fluctuations are inevitable, the international tobacco market is seeing an overall decrease due to the increase of alternative cigarettes. Users are simply moving away from tobacco, either quitting smoking outright, or switching to alternatives that offer more options and a less tainted image.
In addition to the lagging sales and the overall depreciation of profits, Phillip Morris is also factoring in a loss of $495 million that has come in the way of the impending closure of their production facility in the Netherlands. This is a result of the decreasing sales in their European market due to less people smoking. And it’s not just their European market where they are seeing a decline in sales, their Asian market has also reduced as well.
There is no getting around the fact that electronic cigarettes are not only becoming immensely popular everywhere but they’re having an incredibly overtaking effect on the traditional cigarette market considering they are sparking worldwide declines. It’s interesting that the largest tobacco companies are beginning to publicly recognize this, despite it being obvious for some time now.
Paralleling the declines of tobacco sales, Phillip Morris recently acquired Nicocigs LTD, an electronic cigarette company based in the UK. They are not the first tobacco company to do so, as Lorillard and Altria have already extended into this competitive market.
The bottom line here is that tobacco cigarette companies are fully aware that electric cigarettes are not going anywhere, and continue to expand at an exceedingly fast rate. Vapor is here to stay.