Imperial Tobacco is a huge name in the cigarette industry and for good reason. As Canada’s largest tobacco company, they hold a special place on the world’s tobacco stage. However, due to new federal rules, Imperial Tobacco is hoping to expand its territory from cigarettes into the E-Cigarette and Vaping industry.
While to the layman, it may seem odd that this tobacco monolith would sell a product that could compete with cigarettes (the primary source of its profits), in reality, it is a smart business move. Since tobacco usage from traditional cigarettes is decreasing, it is only logical that companies such as Imperial Tobacco keep up with current trends and expands their market in order to continue making profits.
The parent company of Imperial Tobacco is located in the United Kingdom. Called the British American Tobacco (BAT) company, they were actually the first company to introduce electronic cigarettes into the U.K. in 2013. They even received a medicinal license in the U.K. for the Voke, which was created to help smokers quit traditional cigarettes.
Both companies are calling their interest in the vaping and E-Cig industry as ‘taking responsibility’ for the products they sell, and offering an alternative to traditional smoking, even if that includes vaping products with tobacco, without tobacco, or products that help smokers quit like the vape liquid UK that is used in these e-cigs and vapers.
David O’Reilly, British American Tobacco’s Scientific Director admitted that they accept that “cigarettes cause death and disease. That’s why we’re investing heavily in the research and development of safer tobacco and nicotine alternatives.”
Truthfully, they are simply engaging in good business — it is selling a disease just to sell a cure.
How Imperial Tobacco Benefits
Coca Cola does not simply sell one product — they sell Diet Coke, carbonated beverages under different brand names, and they even sell water. Fast food restaurants sell salads alongside their high-calorie burgers and fries. The same applies to tobacco companies reaching out to get into the market of their “competitors.” By offering an alternative to their main product, they will continue to make money and profits no matter how the trends ebb and flow.
Selling vaping products would be a huge step for this tobacco company, as the huge $235 million markets (according to the Canadian Vaping Association) is only increasing in popularity and sales. Federal regulations in the U.S. via the FDA (Food and Drug Administration) has shown that lawmakers are making it more popular than ever to stick on huge tax rates on vaping products on top of state tax on products. This means consumers pay more and the vaping product manufacturers take the opportunity to raise their prices, as well.
Imperial Tobacco wants to first see how Canada’s federal rules regarding vaping take effect before taking a step forward. For example, the federal government stated that it would introduce amendments to the “Tobacco Act” in order to create an official framework to Regulate E-Cigarettes and Vaping products.
It is likely, however, that Imperial Tobacco will join their parent company (BAT) in introducing vaping products and E-Cigs to the Canadian market. Studies from the WHO (World Health Organization) have shown that around 1 billion people will continue to smoke worldwide.
The momentum behind tobacco is not slowing down, it is simply changing direction. And Imperial Tobacco is in place to benefit financially from this trend to E-Cigs and vaping products.
When to Expect a Decision
The changes that will come from the Tobacco Act in Canada will not become evident until this Fall. The goal of the Act is to protect minors from developing an addiction to nicotine while seeking a balance with helping adult smokers use vaping products in order to quite a smoker the more-harmful traditional cigarettes.
The sale of E-Cigs are illegal in Canada, technically, as they are not approved by Health Canada, but they are still easily accessible. The new federal rules could allow Imperial Tobacco to take a look at consumer trends, see where their profits are, and decide if they wish to go ahead with their idea of putting out a line of E-Cigarettes and vaping products.