$MO for September

Will E-Cigs effect big tobacco? E-cigarettes are changing the way people consume tobacco and, overall, offer a much bigger savings than traditional cigarettes. Goldman Sachs provided that e-cigs will account for 10 billion in retail sails over the next few years, which amounts to approximately 10% of total tobacco sales.

Altria has chosen not to acquire an e-cig company, but rather to use a subsidiary to join the e-cig market. In June MO announced it will launch e-cigarettes under the brand name MarkTen (in a similar box to Malboro).

Overall, the e-cig boom could be beneficial to big tobacco. Currently, for every pack of cigarettes sold in the US, $3.16 goes to government agencies. E-cigs have not yet been regulated and, therefore, can be sold at a much reduced cost than conventional cigarettes.

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