Home WORLD AMERICA Electronic cigarettes: Altria reduces the value of its stake in Juul

Electronic cigarettes: Altria reduces the value of its stake in Juul

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The manufacturer of Marlboro believes less and less in the chances of electronic cigarettes from Juul to be approved by the American health authority.

The value of Altria’s 35% stake had already fallen to $1.6 billion at the end of March, from $12.8 billion in 2018, amid intense regulatory scrutiny and heightened risks of a complete ban in the United States.

The value of Altria’s stake in Juul is now worth only 3.5% of its initial value.

Altria even said there is a greater likelihood that Juul will file for bankruptcy protection as its cash reserves dry up.

Juul’s troubles multiplied; its electronic cigarettes were briefly banned in the United States in June by order of the Food and Drug Administration (FDA).

Altria, however, maintains a link with Juul for now, explaining that inflation and high gas prices as well as rising interest rates have reduced demand for cigarettes in the United States, which has contributed to a 5.7% drop in revenue for the second quarter, to $6.54 billion.

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Marketing to teens

A young woman smokes an electronic cigarette.

Youth vaping is becoming a public health issue.

Photo: iStock

Last April, Juul agreed to pay $22.5 million in a lawsuit in the United States accusing it of targeting teenagers as part of its marketing strategy.

The company had announced that it would withdraw advertisements aimed at young people, including on social networks. It has also pledged to work to ensure that its stores in Washington state do not sell products to minors.

In July 2019, the World Health Organization (WHO) declared electronic cigarettes to be unquestionably harmful and that they should be regulated. A report from the UN institution advises against the use of these devices for people who wish to quit smoking.

The growing popularity of electronic cigarettes in the mid-2000s, especially among young people, worried health authorities around the world, who feared that vaping was driving young people to smoke tobacco.

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Although these devices expose the user to fewer toxic substances than combustible cigarettes, they also have risk for the healthensures the report of theWHO.

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