How does the e cigarette tobacco industry operate?

It’s no secret that e cigarette sales are in decline. Philip Morris said third-quarter cigarette shipment volumes fell 5.4 percent to 207.1 billion units, while they’re down 3.9 percent year to date. Volumes were down sharply in its Asia market, falling 9 percent in the quarter, as well as in Eastern Europe, Middle East and Africa, where they were off 8 percent.

Although British American Tobacco had slightly better results—quarterly volumes were flat while year-to-date volumes were up 0.9 percent—the industry remains in contraction even as legal risks remain an ever-present threat to the financial health of the cigarette companies.

One way tobacco companies can attempt to give the invisible hand of the market a little help is to push for more regulations on vaporizer and e-cigarette products. According to a special report by Reuters in 2015, tobacco giants such as RJ Reynolds and Altria have petitioned the FDA to treat small vape shops—which offer a plethora of different flavors and vape mods to customers—as manufacturers, teeing the independent outfits up for a storm of inspections and regulations they would find difficult to weather at their comparatively small size.
“I think one of the things the industry would like to see… is a world in which the tobacco industry is much more like the pharmaceutical industry in terms of how it operates,” retired Altria executive Steven Parrish says in the special report. “Very heavily regulated and maybe not loved and admired, but at least acknowledged as a legitimate business.” Whether it’s through their legions of lobbyists arguing for new rules and regulations or via a crack team of engineers working on a new, innovative e-cigarette product the world can’t do without, Big Tobacco knows nicotine consumption stands on the precipice of change. The question is, will they hinder it or usher it in?

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