Not long ago one of the largest tobacco companies in the nation starting laying off workers in an attempt to save money, approximately $300 million worth. Why would they do this? According to an article written by Matt Novak on Gizmodo, they need to save in order to enter the vaping industry. The article explains Altria Group is laying workers off in order to be able to start investing in electronic cigarettes.
Altria Group, formerly known as the Philip Morris Co., found its mark in tobacco industry with its Marlboro cigarette brand. They are now the holders of over half the traditional cigarette market. The tobacco industry has been hit hard with the decline in traditional cigarette smokers and the advance towards electronic cigarettes. The layoffs are Altria Groups proactive means in finding a way to compensate.
Campaigns geared towards the health risks of tobacco, nicotine and other chemicals found in traditional cigarettes started the tobacco industry’s downfall. New regulations were enacted limiting public smoking. Smokers were no longer able to smoke in their favorite venues. Also enactments of massive taxes forced smokers to either find alternative smoking methods or quit. This was the beginning for the vaping industry. Vaping was comparatively less expensive and healthier. This caused larger vaping companies to come into play, such as Dallas Vapor Galleria in order to supply these cheaper and healthier options.
The Gizmodo article states, as smokers left the traditional tobacco cigarette, tobacco companies watched their profits decline and turned to other avenues for income. Many companies switched their business investments to developing countries such as Asia. There the laws governing cigarettes were more tolerant. Especially with public smoking and advertising. With the tobacco industry focusing elsewhere the vaping industry took hold. The vaping industry was basically taking over the tobacco industry. To resolve this issue tobacco companies got the idea to buy out their competitors and make better products.
The tobacco industry appears to have found its winning hand again. This time with e-cigarettes. The new stricter rules and regulations pertaining to the vaping industry are basically pushing the smaller companies out of the market. The newest regulation by the FDA has the vaping industry in a choke hold. To be able to market their supplies vape companies have to submit Pre-Market Product applications for every product that wasn’t manufactured before February 15, 2007. That’s pretty much every vaping product out there. Many states are levying heavy taxes on vaping products and e-cigarettes. The only businesses that can afford to stay in the game are large businesses, and big tobacco companies.
Again the tobacco industry may be in place to score a goal in the smoking game. Either way, they seem to have the upper hand. They are large enough to endure the new regulations and taxes on vaping products. Also if the vaping industry happens to fade away due to the restrictive regulations and taxes, many believe smokers will re-visit traditional tobacco products. For tobacco companies it seems they may again have won. For the average smoker this may mean going back to traditional cigarettes. This could be a backward slide in the associated health risks of tobacco products.
- “Makers of Marlboro Laying Off Workers to Invest in More Vaping”
20 June 2016