Cigarette Makers Cooperate to Struggle the Drop in Sales

Published on May 12th, 2014 00:00

It is well known that the amount of cigarettes sold all over the world is decreasing, and for a number of cigarette investors this is upsetting. Still, giant cigarette makers such as Altria, Philip Morris International, and Reynolds American do not want to be apart and are currently trying to bring new changes.

Not so long ago, Philip Morris has agreed upon a deal with Altria where the two cigarette producers will elaborate the methods for electronic cigarettes in conformity with particular certifications and cooperation contracts. However, what both Altria and Philip Morris own is the world best selling Marlboro cigarette brand, which could be used by both makers to increase their influence of the e-cig market. With lots of e-cig goods running after a fairly tiny market in comparison to that of conventional tobacco, major cigarette producers such as Altria and Philip Morris could effortlessly become hostile while attempting to get e-cig sales and their possession of the Marlboro brand could offer them the control they want.

Altria also plans to gain from Philip Morris' idea of reduced-risk smokes made for sale throughout the United States. Reduced-risk smokes, as outlined by Philip Morris, are products that diminish the danger of tobacco-related diseases. Altria presently is the owner of several of these products in the market, as for example the maker's Verve chewable nicotine product and Denmark, a kind of gum made up of tobacco. On the other hand, Philip Morris is focusing on pushing the sales of low-risk products throughout the world. The company not too long ago spent €500 million in a production plant in Italy, specialized on tobacco products with decreased risk, approximately prior to an entire marketing of one of its reduced-risk smokes in the 2Q of 2014. As outlined by Philip Morris, once absolutely functional, the factory's yearly manufacturing ability is predicted to constitute around 30 billion units by 2016.

Speaking about the creation of decreased-risk products, Philip Morris' representative declared: "The creation and marketing of reduced-risk products is a great idea for the industry, and moreover a crucial growth chance for PMI." Not wanting to be stay apart, Reynolds American also demonstrates activity in the non-tobacco nicotine segment. Reynolds' branch, Niconovum USA, has joined the market in the United States with innovative nicotine-replacement gum known as Zonnica, while R.J. Reynolds has introduced an electronic cigarette, Vuse, which is offered in limited circulation.

So in conclusion, it would look that major cigarette makers are not going to close their activity and acknowledge decreasing cigarette sales. In fact, Philip Morris and Altria are both cooperating together and minimizing their dependence on cigarettes and similar tobacco products, whilst Reynolds American is operating alone but still demonstrating great results.