Europe Gets the Blu’s
Tobacco country's Triad Business Journal reports that cigarette giant Lorillard will be introducing its Blu line of e-cigarettes in Europe, perhaps as early as the end of this year, or early next year at the latest. Blu e-cigs, which began as an independent company not selling combustible cigarettes, was bought by the cigarette maker in 2012, in the first step by Big Tobacco to grab the vaping market. As Blu cornered more than 40% of the US market, virtually all of the other cigarette makers have followed its lead, beginning to sell the lucrative antidote to declining cigarettes, either developing their own lines or buying up independents.
Blu e-cigarettes will be rolled out in Germany, France, and the Netherlands, according to a Lorillard spokesperson.
The announcement come along with rumors of a possible merger between the Triad's two cigarette juggernauts, Lorillard and Reynolds American (which has its own e-cig, Vuse, developed in house). North Carolina's "Triad" of cities, Greensboro (Lorillard's home base), Winston-Salem (home of Reynolds American), and college town High Point, form the administrative and industrial center of the state's, arguably the world's, tobacco industry. (Not to be confused with the state's more liberal "Research Triangle", a trio of university towns, one of them the state's capital, that are home to dozens of scientific institutes, some of them based out of state, or supported by out-of-state, non-tobacco, interests.)
Reuters reports that Reynolds American is engaged in late stage talks to buy Lorillard, something tobacco industry analysts at key securities firms have been predicting. The deal is complicated by the fact that British American Tobacco (whose e-cig is the in-house developed Vype) owns 42% of Reynolds American, and talks of acquiring an even greater share. The merger, then, would be, like North Carolina's urban centers, triangular, and will very likely face anti-trust complications.
News of the deal raised Lorillard stock value by 10%. However, there is concern about the future of Lorillard's flagship combustible, Newport, which is branded as a menthol cigarette. In the controversy over flavored smokes, there is talk of the FDA curtailing menthol sales. This makes Blu an even more key element in Lorillard's future.
The proposed merger will position the joined firms to challenge Virginia-based Altria (Phillip Morris, Marlboro), until now the undisputed industry leader. Currently, Reynolds is the number two US cigarette company, with Lorillard coming in third. E-cigarettes have become the central element in the corporate dosey-do of Big Tobacco, since vaping products are expected to outsell combustible cigarettes within a decade. And of course when it comes to e-cigarettes, the tobacco companies face competition from independent companies that do not sell poisonous smokes. The independents are often favored by experienced vapers, who are often ex-smokers with a justifiable grudge against Big Tobacco.