The introduction of plain packaging in Australia is a threat to the tobacco industry. Now it turns out that the European Union considers the watered-down version of the same with images and health warnings occupy 75 percent of the cigarette pack, while the individual states will be allowed to introduce a simple legislative package.
And it’s not over for Europe. Russia, the largest tobacco market after China, is considering legislation that could see tobacco advertising and smoking illegal in public places, such as restaurants, bars and hotels closed. It also banned the stalls and shops at the stations from the sale of cigarettes. If passed, the restrictions will be phased in, and is expected to be fully operational in 2016.
At this junction, it is good to remind ourselves that only four tobacco companies, including British American Tobacco (BTI), Imperial Tobacco (ITYBF.PK), Japan Tobacco (JAPAF.PK), and Philip Morris International (PMI), control more than 90 percent of Russian sales of tobacco products. Cigarette market is estimated at about $ 22 billion in 2011, the euro Monitor International. As I said in my previous article, the same four also have substantial sales in the rest of Europe.
Obviously, after the introduction of the European Union is almost plain packaging with the introduction of Russia on tighter regulation of tobacco would hurt revenues (and possibly dividends) of all actors on the international tobacco companies with significant activities in Europe.
Therefore it is not surprising that some of the biggest players in the tobacco industry seeking to develop reliable products, which are an alternative to smoking.
British American Tobacco makes his move
I have already alluded to the interests of British American Tobacco in the development of so-called electronic cigarettes, its chief financial officer Nicandro Durante claiming earlier in September that the size of the market of tobacco alternatives could be up to 40% of Bat in time by 20 years.
Last year Nicoventures, British American Tobacco subsidiary, was established to focus on the fact that this is “the development and commercialization of innovative regulatory approved nicotine products.”
With today’s announcement, British American Tobacco made its first serious step to the acquisition of CN Creative, Manchester-based Company that specializes in the design and manufacture of non-combustible cigarettes are for smokers offer a less risky alternative to cigarettes.
According to Sky News acquisition is considered a cost of tens of millions of pounds; the purchase is clearly far-reaching strategic significance for the group.
CN Creative regarded as one of the pioneers of some of the world’s most popular electric cigarette brands. Aannouncement made by British American Tobacco, the company has its own research and development facilities, and currently has a number of electronic cigarette products on the market, as well as new, innovative electronic cigarette technology in development.
Among the products of Manchester-based company is weaving, which she claims is the best in the world of electronic cigarettes, selling in 26 countries around the world, including in the UK. CN Creative also produces ECOpure, nicotine products, and is developing a new generation of products called Nicadex, the company says that “there will be drugs under the regulatory framework as a smoking cessation device / drug use.”
Kingsley Wheaton, Director of Corporate and Regulatory Affairs at British American Tobacco, said:
“Our core business is, and will remain, tobacco, but we have always been clear that our goal is to provide those adult smokers who are looking for a safer alternative to cigarettes with a range of lower-risk products that will meet their diverse needs.
“We believe that the innovative electronic cigarette technology that CN Creative developed over the past few years will help us get closer to achievin