One of the nation’s largest tobacco companies, Altria Group, has begun laying off employees in an attempt to save $300 million a year. In his article on Gizmodo Matt Novak states the company’s intention is to capitalize the money into e-cigarettes. The decision to invest in the vaping industry is due to the loss of profits in the tobacco industry.
Altria Group was formerly the notorious Philip Morris Co. Their most recognized product was their Marlboro cigarettes. Today even as the industry falters, Altria Group holds more than half the cigarette market. With the drop in tobacco cigarette smokers and the increasing popularity of electronic cigarettes the tobacco industry is suffering from a deterioration in profits. The lay-offs are Atria Groups proactive reaction to the daunting circumstances involving the tobacco industry.
The industries deterioration began with key results from medical research concerning the major health dangers in regards to tobacco, nicotine and other chemicals components in traditional cigarettes. Regulations limiting public smoking forced smokers, who were no longer able to enjoy a cigarette in public, to practically only be able to smoke in their own homes. Due to these difficulties and the sky-high cost of a pack of cigarettes, many tobacco smokers were driven to either find other ways to smoke or to quit. Vaping became the practical solution.
In his article Mr. Novak states, with smokers moving away from tobacco cigarettes, tobacco companies began to witness an unyielding dip in their profits. To offset the loss, they discovered other avenues to increase profits. A key investment opportunity became taking their businesses over-seas to developing countries such as Asia. The laws in these countries pertaining to cigarettes were more lenient. With the tobacco industry focused elsewhere, and regulations not yet an issue, the vaping industry started its growth spurt. Watching the market closely the tobacco industry found a way in and now want to take back their customers. With the help of the new rigid set of laws restraining the vaping industry, they are acquiring their competitors and creating better products.
The tobacco industry appears to have discovered its new vocation in e-cigarettes. Due to gagging regulations and soaring taxes. Smaller vape companies are being pushed out of the business, and the newest FDA regulations are annihilating the entire vaping industry. The only types of businesses that will be economically able to handle the changes in the vaping industry are large organizations, and big tobacco corporations.
The tobacco industry appears to be attempting to retake its place in catering to smokers, whether they smoke tobacco cigarettes or e-cigarettes. They have the fiscal capability stand against the assault of new regulations and taxes slamming the vapor industry. If the vaping industry happens to die from its injuries due to the constricting regulations and taxes, many believe smokers will crawl their way back to tobacco cigarettes. This would appear to be good for tobacco companies. As for the general public, especially smokers, this would be a reversion back to dealing with the health risks that are associated with smoking traditional tobacco cigarettes.
Learn More about how you should never resort back to smoking tobacco cigarettes.
- “Makers of Marlboro Laying Off Workers to Invest in More Vaping”
20 June 2016