E-Cigarettes: Imperial Tobacco

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In addition to tobacco products, Imperial Tobacco has been selling e-cigarettes since 2014.

Although the company initially sold several brands, from 2016 Imperial Tobacco's main focus has been to grow the blu brand.[1]

This brand is available in the United States, the United Kingdom, France and Italy.[2]

Background

Imperial Tobacco, like other tobacco companies, has been investing in tobacco and nicotine products that, unlike cigarettes, show potential for volume growth in developed markets.[3] These products are referred to as Next Generation Products (NGPs), and are often linked to tobacco companies’ harm reduction strategies. Products that fall into this category are snus, e-cigarettes, and Heat Not Burn (HNB) products.

Imperial’s initial NGP investments focused on snus, but switched to e-cigarettes in late 2012.

E-Cigarettes Developed and Marketed Through Fontem Ventures

In December 2012, Imperial Tobacco set up a Dutch subsidiary called Fontem Ventures, which develops and markets Imperial Tobacco’s e-cigarettes.[4][5]

  • For detailed information on Imperial Tobacco’s e-cigarette business and activities, visit the Fontem Ventures page.

E-Cigarettes Only - No Interest in Heat Not Burn Technology

Unlike Philip Morris International, British American Tobacco, and Japan Tobacco International, Imperial Tobacco has not invested in Heat Not Burn (HNB) technology.

Imperial Tobacco has publicly criticised HNB technology, saying “there’s no difference really between those products and traditional tobacco products” and “It’s probably better described generically as ‘heat and burn’ rather than ‘heat not burn’”.[6]

Imperial Tobacco's reluctance to invest in HNB, may also be due to the companies’ perception that HNB products will be difficult to market as reduced risk because they are tobacco products, and as such, Imperial believes the products will be taxed like cigarettes.[6] This would impact the profit margin of the product.

TobaccoTactics Resources

Relevant links

Notes

  1. Fontem Ventures, blu website, undated, accessed May 2017
  2. A. Van Benthem, Presentation Transcript: Quality Growth- New Consumer Experiences. Imperial Brands Investor Day, 8 June 2016, available from: http://www.imperialbrandsplc.com, accessed April 2017
  3. Euromonitor International, Global Tobacco Key Findings Part 2: Vapour Products. August 2016
  4. Imperial Brands, Annual Report and Accounts 2016, Delivering Against Our Strategy, Imperial Brands website, accessed April 2017
  5. A. Cooper, R. Dyrbus, Sustainable Growth; Growing Cash Returns presentation, Imperial Tobacco Investor Day 26 February 2013, available from: http://www.imperialbrandsplc.com, accessed April 2017
  6. 6.0 6.1 M. Geller, Imperial shuns “heating products” pushed by Big Tobacco rivals, Reuters, 6 May 2015, accessed April 2017