With a 35% holding in e-cigarette maker Juul, Altria is betting it can turn its older consumers into fans of vaping. Altria’s expertise in dealing with the FDA is a major asset that Juul lacks, and its access to a cohort of longtime tobacco using customers is exactly what the start-up needs to avoid more scrutiny from regulators worried about kids vaping.
Jennifer Maloney reports on the business tie-up in The Wall Street Journal:
The tobacco giant has agreed to provide Juul with a range of services expected to include help to smooth over the e-cigarette maker’s rocky relationship with the Food and Drug Administration. Juul has come under scrutiny by regulators because of the popularity of its products among children and teens. The agency recently announced sharp restrictions on the sale of flavored e-cigarettes such as Juul’s. The startup’s products accounted for about three-quarters of the U.S. e-cigarette market before the FDA announcement.
Juul is scheduled in February to meet with agency officials to begin the application process for allowing its products to remain on the market past a government-granted grace period ending in 2022, according to people familiar with the matter.
“It would not at all surprise me if we collaborated with their regulatory team on their FDA filings,” Altria Chief Executive Howard Willard said on a conference call Thursday with analysts and reporters. “We have years of experience.”
Juul says its mission has always been to help adult cigarette smokers switch to less harmful products. But it has stumbled along the way, with marketing that appealed to young people, an aborted antivaping program it created to present in schools, and a continuing struggle to tamp down the proliferation of images on social media posted by underage Juul users.
By contrast, Altria, the U.S. cigarette market leader, is expert at reaching adult smokers. It now offers Juul improved access to those consumers.
The tobacco giant brings “a level of sophistication that they need,” said a person familiar with the matter.
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