The tobacco industry gets smoked out
Will the e-cigarette kill off the business that kills millions every year?
E-cigarettes: “A case can be made for them, certainly, but there are downsides, including the renormalisation of cigarettes”
When it comes to corporate evil there is one perfectly legal industry that towers above the rest. It will kill at least 50 people by the time you finish reading this article. It is hard to top the financial sector for pure greed, and the arms industry has long profited from pain, suffering and death, but it is the tobacco giants that have formed the perfect alliance between greed and death and wrapped it in a fog of Sweet Afton smoke.
According to the World Health Organisation more than five million people die every year from smoking-related illnesses – about 10 people a minute – but despite this grim statistic, 25 per cent of Irish adults – or close to one million people – still smoke and the tobacco industry profits handsomely from their addiction
But over the last couple of years, that industry has been looking nervously over its should at a new technology which has the potential to hit their business hard. Electronic cigarettes. Last Tuesday morning analysts at investment bank Canaccord Genuity caused a ripple of newspaper headlines when they downgraded their recommendations on British American Tobacco and Imperial Tobacco because of the impact they think electronic cigarettes will have on the sector.
“We think electronic cigarettes will prove to be the most significant development in the history of the organised tobacco industry, stretching back some 200 years,” it said. “We expect consumers worldwide to migrate from tobacco smoking to e-cigarettes at an accelerating rate through 2020.
While the e-cigarette market is dwarfed by the cigarette market – it is currently $3 billion versus $700 billion – analysts says the e-cigarette market is growing while the traditional sector is shrinking – not least because it is killing its target market.
“In the longer term, the total combined market will shrink at a more rapid rate than most investors envisage as e-cigarettes wean smokers off tobacco, but do not attract new users into the overall category,” Canaccord Genuity said
What are electronic cigarettes? Put simply, they provide a nicotine “hit” through a vapour release but they have no tar, no tobacco, no carbon monoxide and none of the nasty additional chemicals found in traditional cigarettes. They don’t smell, and as passive smoking is not an issue, they can be used anywhere.
They can also save smokers money. How much? It depends on how much you smoke and the brand of e-cigarettes you go for. E-Lites launched in the Republic last February and that brand claims that smokers can save up to 75 per cent a year by making the switch – for someone who smokes a pack of 20 a day at a cost of €9.50 a time, that is a saving of €2,600.