Who’s got the Blu’s now?
Well, the Big Tobacco do-see-do has happened, and some brands have changed partners. R J Reynolds and neighbor Lorillard are now joined in holy (or perhaps unholy) union, but Lorillard's little baby Blu has been packed off to it's new adoptive parent, Imperial Tobacco. What is going on here, and how will it impact serious vapers and the vaping supplies industry?
Everybody was surprised that the new, combined R J Reynolds and Lorillard entity dropped Blu e-cigarettes, which had been seen as the new jewel in the Lorillard crown, leaving only the Reynolds offering of its own Vuse brand in the e-cig category. Even Forbes and Wells Fargo's Bonnie Herzog admitted they were surprised. Lorillard had been the first Big Tobacco company to muscle in on the vaping industry, and the move had been touted as a stroke of genius, as Lorillard pumped enough money into promotion to turn Blu into the market leader. So why 86 it now?
It could be because of the lawsuit Imperial leveled against Lorillard for patent infringement. Way back in 2010, Dragonite (formerly Ruyan), the Chinese firm that first marketed Hon Lik's invention, filed a lawsuit against Blu for patent infringement. Courts decided in favor of Dragonite, and damages were paid at about the same time Lorillard bought Blu, probably as part of the deal. Then last year, Imperial Tobacco (makers of Galoises, Players, and others) bought Dragonite, with its patents, for the paltry sum of $75 million.
Not long after that purchase, Imperial renewed the lawsuit against Lorillard/Blu, along with some other e-cigarette firms, the others all independents. Of course, Imperial had nothing to do with the invention by Ruyan's associates – far from it. Big Tobacco was horrified by the birth of the e-cig at first, and only embraced it later, when Lorillard showed that the antidote to smoking illness could be a money-making venture for the producers of smoking illness. This makes Imperial what is called an IP ("intellectual property") troll, a company that buys up patents and copyrights in order to cash in on creative ventures they had no part in creating. And it also makes them a peculiarly hypocritical entrant into the vaping supplies community.
It may well be that divesting Blu is the new Lorillard/Reynolds entity's way of putting that lawsuit to rest.
Investors, often blind to ethical distinctions, seem awed by the do-see-does of the financially flush corporations that market cancer, and seem to be scurrying to obediently rearrange their portfolios in accordance with the new arrangements.
Vapers take a different view. How will this impact our range of choices? Thankfully, not all that much, it appears. Lorillard will not have to pay Imperial for using Ruyan's technologies. Beyond that, it means that for the time being, Vuse will be the only e-cig in the Reynolds/Lorillard stable, and Imperial will be able to profit from Blu sales. Other parts of the deal relate to trade-offs among other brands of combustible cigarettes, deals which no longer impact vapers, who have left that scene.
Both Blu and Vuse appeal primarily to newbie vapers, just starting a quit attempt through vaping, who want a product that approximates smoking closely. Chances are they will eventually graduate to real vaping, using a personal vaporizer, mod, or tank system. So the do-see-do of the cancer hawkers impacts us only peripherally.
The big question for us is whether Big Tobacco will go into tank systems. And whether vapers will be able to resist Big Tobacco liquids in favor of those sold by the independents we have already been buying from.