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Altria's Foray Into the E-Cigarette Market

 
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London, UK -- (SBWIRE) -- 05/13/2013 -- Altria will foray into the electronic cigarette UK niche market, with its launch of e-cigarettes slated to take place in the second half of this year. The Richmond, Virginia based company has issued a statement confirming the launch but did not disclose the market in which it will launch the e-cigarette. The company will provide further details on the launch in June.

Altria's decision came soon after the company experienced a 5 percent decline in its revenues. Sales of Malboro, which is the company's top selling product, also fell by an equal margin. According to Mr Martin Barrington, Altria's Chief Executive Officer, the company will have to take on the established companies in this niche like Lorillard Inc and NJOY. Lorillard Inc. claims that over 40 percent of the market for e-cigarettes in the US has been dominated by its Blu Cigs brands.

Analyst Christopher Growe from Stifel Financial Corp. states that Altria has the necessary resources, a robust sales force and an established marketing network which can make it an important participant in the e-cigarette market.

Analyst Kenneth Shea working with Bloomberg Industries surmises that Altria may opt for inorganic growth and acquire an existing company producing e-cigarettes. Altria had cash/ cash equivalents amounting to $ 3.78 billion as of March 31 which exceeds the December 31 figure by $0.88 billion. The company did not confirm if it would acquire an existing player in the e-cigarette niche or if it would launch e-cigarettes on the platform of one of its existing brands.

Estimates by the company Lorillard show that, for the first three months of the year, around 600 million e-cigarettes were used instead of tobacco cigarettes. This represents an annual figure of 2.4 billion cigarettes comprising 1 percent of the total cigarette market.

Altria will also have to incorporate the new rules that are being considered in the US by its Food and Drugs Administration, for the regulation of e-cigarettes.

Besides Altria, other manufacturers of electronic cigarettes like Greensboro, Reynolds and Lorillard have also been having similar problems. For more information on electronic cigarette news, e-cigarette reviews, and to find the best e-cigarette UK visit E-CIG HUB.

Elizabeth Morgan
E-CIG HUB
inquiry@ecighub.co.uk
London,United Kingdom
http://www.ecighub.co.uk