Tuesday, April 30, 2013

Financial Analyst: 1.5 Billion Fewer Cigarettes Smoked this Year Because of Electronic Cigarettes

Imagine an intervention that would reduce the consumption of cigarettes in the U.S. by 1.5 billion within one year. Anti-smoking groups would be praising that intervention and trying to expand it.

Well, according to Morgan Stanley tobacco analyst David Adelman, that intervention exists and it is called the electronic cigarette.

According to a Business Insider Australia article, in the current year, electronic cigarettes have reduced U.S. cigarette consumption by 1%, which projects to a reduction of 1.5 billion cigarettes for the year 2013: "Tobacco giant Lorillard recently said that e-cigarettes may have taken 1% of the U.S. cigarette volume. As you can see in the chart below, Adelman estimates that e-cigarettes will take the place of around 1.5 billion cigarettes this year, up from around 600 million last year."

Another indication of the increasing popularity of electronic cigarettes and the degree to which these products may reduce cigarette sales is the announcement last week that Philip Morris is entering the electronic cigarette space: "Altria Group Inc. announced Thursday that it plans to introduce its own electronic cigarette this year, putting the nation’s largest tobacco company into a growing category of alternative tobacco products. Henrico County-based Altria, owner of top U.S. cigarette maker Philip Morris USA, said it plans to sell an e-cigarette in an undisclosed market during the second half of 2013. ... Altria’s announcement comes as major tobacco companies are increasingly looking for new, novel products to help offset a long-term decline in traditional cigarette consumption in the United States."

The Rest of the Story

Ironically, the only ones attacking this intervention which has significantly reduced cigarette consumption and therefore improved the public's health are anti-smoking groups and health agencies, such as the FDA.

What's not to like about an intervention that has already reduced cigarette unit sales by 1% and promises to make an even greater dent in cigarette sales in the future?

Well, from the anti-smoking groups' perspective, there are two things not to like:
First, using electronic cigarettes looks like smoking.

Second, electronic cigarettes threaten not only cigarette sales, but also the sales of pharmaceutical smoking cessation products. The anti-smoking groups which oppose electronic cigarettes are largely funded by Big Pharma companies which stand to lose if electronic cigarettes continue to help thousands of smokers to quit or cut down substantially, and therefore increase in sales.

It is sad to think that if electronic cigarettes do continue to save lives, they will do so despite the best efforts of anti-smoking groups, rather than because of their efforts.

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