The North American electronic cigarette giant Juul is preparing to leave five European countries in the coming months due to the strong obstacles imposed on its development. These are, specifically, Spain, Portugal, France, Austria and Belgium. As reported by BuzzFeed News, the decision has nothing to do with the coronavirus pandemic but, fundamentally, with the strong obstacles imposed on its development. The group admitted yesterday that “we are evaluating our operating model and the best way to position our company”, and assures that “we have nothing more to announce”.
For Juul, the Austrian, Belgian and Portuguese markets are apparently too small to grow and although the case of Spain and France is different, the company understands that the costs are not justified either given the difficulties of dealing with regulators. The European Union has imposed strict requirements for e-cigarette products, forcing companies to adhere to a nicotine limit of 20 milligrams per milliliter of liquid. Meanwhile, a single Juul pod can contain up to 59 milligrams of nicotine per milliliter in the United States.
five years of life
The firm was born worldwide in 2015, by the hand of two ex-smokers, Adam Bowen and James Monsees, who after doing a master’s degree in technical design at Stanford (USA) presented as a final project a solution to the problem of quitting smoking and tobacco of combustion. Both spent 10 years working on the project and ended up launching the company, which experienced strong development and (33.3 billion euros) when the Altria group took a 35% stake.
In Spain, it entered in October 2018 under the direction of Javier Valle, although the real jump to the market occurred last year. In an interview with elEconomista in July 2019, Valle explained that “in Spain there are ten million smokers and we want to be an alternative.” According to the CEO of the American company, “seven out of ten want to quit and only 45% succeed”, noting that “only in the US, 64% of smokers who have tried Juul have quit tobacco… and many in the early days.”
Devaluation
Altria again devalued its investment in Juul last January, which at the time was worth only a third of what it paid. The company that operates the Philip Morris brands in the United States such as Marlboro, decided to review its investment downward for the second time with an extraordinary impact of 4,100 million dollars (3,718 million euros) after another similar measure in October.
All the big tobacco companies have been betting in recent years on the development of alternative products to cigarettes with large investments in their development and manufacturing. Philip Morris, in fact, has already stated that its goal is that its iQos heated tobacco device will eventually replace the traditional product.
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