British American Tobacco's Expansion Hindered, FDA Issues Vuse Sales Refusal Order

British American Tobacco's expansion hindered, FDA issues Vuse sales refusal order

 

Juul, which once created the myth of e-cigarettes, is fading day by day. After parting ways with Altria, Juul is negotiating an investment deal with the three major tobacco giants Philip Morris International, Japan Tobacco and Altria Group to seek new way out. Juul had to accept a bailout from board members and plans to cut about 400 jobs to avoid bankruptcy.

 

Although Juul’s performance has plummeted, the United States, the world’s largest e-cigarette consumer market, will not shrink its total market share because of Juul, so this part of the share is a huge opportunity for major e-cigarette brands.

 

Who has the chance to fill the void created by Juul? At present, British American Tobacco is extremely active, trying to expand rapidly through Vuse.

According to the latest Nielsen convenience store report, Vuse is filling the void left by Juul. The data released by the report shows that in the four-week period, the current market share of Vuse has increased from 41.5% in the previous report to 42.7%, while Juul's market share has decreased from 26.4% to 25.6%.

 

The analysis of the Nielsen convenience store report released last summer has already shown this trend. Due to the uncertainty of Juul's future, the market gap between Vuse and Juul in the United States has gradually widened. Data for the four weeks ended Aug. 13 showed Vuse's market share rose to 39 percent from 37.4 percent in the previous cycle, while Juul's market share had fallen to 29.4 percent from 30.7 percent.

 

Vuse is the largest closed vaping system in the UK, accounting for 44.2% of total sales. London-based British American Tobacco has been investing heavily in non-combustible nicotine products and plans to reach 50 million smoke-free users by 2025. This year’s public report mentioned that in the first quarter of 2021, the number of new users reached 1.4 million, including new users of nicotine pouches in addition to e-cigarettes and heated tobacco products, and the total number of users of smoke-free products It reached 14.9 million. British American Tobacco's current strategic goal is to make smokeless nicotine products profitable by 2025.

 

However, under the supervision of FDA and CTP, the US market is not at your fingertips. Like countless other brands, Vuse has also been sanctioned by PMTA.

 

In reviewing the PMTA applications for Vuse Replacement Cartridge Menthol 4.8% G1 and Vuse Replacement Cartridge Menthol 4.8% G2, FDA concluded that the applications lacked sufficient evidence to demonstrate that these products make a positive contribution to public health.

 

Although in September last year, a panel of the U.S. Court of Appeals for the Eleventh Circuit ruled that the FDA was arbitrary and capricious in rejecting the marketing applications of several e-cigarette companies, including the two products of Vuse, But the FDA still ultimately issued Marketing Denial Orders (MDOs) for two Vuse Solo menthol e-cigarette products. This means that Imperial Tobacco's RJ Reynolds Vapor Co. in the United States cannot sell or distribute the above products in the United States.

 

For any e-cigarette brand, the US market is undoubtedly a huge treasure, but the huge financial, material and manpower consumed by PMTA is also unbearable for ordinary companies. Moreover, the certification of PMTA has always been controversial, and the FDA has received a large number of criticisms and lawsuits.

 

This time, the marketing refusal order for Vuse adopts the classic "universal clause" - you must have enough evidence to prove that your product has a positive contribution to public health.

 

Finally, British American Tobacco has lost the sales license of two main products in the United States. Although British American Tobacco's rapid expansion strategy to replace Juul has been hindered, the refusal order generated by the "universal clause" may solve the problem for large tobacco groups. It's just a matter of time.