Electronic cigarettes: Altria reduces the value of its stake in Juul

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Electronic cigarettes: Altria reduces the value of its stake in Juul

Altria is less and less confident in the chances of Juul's electronic cigarettes being approved by US health authorities.

From $12.8 billion to $450 million. The value of the Altria group's stake in Juul, which produces electronic cigarettes, is shrinking like a trickle.

The Marlboro manufacturer believes less and less in the chances of electronic cigarettes of Juul to be approved by the US health authority.

The value of Altria's 35% stake had already fallen to $1.6 billion at the end of March, compared to $12.8 billion in 2018, amid intense regulatory scrutiny and heightened risks of a full ban in the United States.

The value of Altria's stake in Juul is now only worth 3.5% of its original value.

Altria even said that there was more Juul is likely to file for bankruptcy protection as its cash reserves dry up.

Juul's troubles have multiplied; its e-cigarettes were briefly banned in the United States in June by order of the Food and Drug Administration (FDA).

Altria is maintaining a tie with Juul for now, however, explaining that inflation and high gas prices as well as rising gas rates x27;interest reduced demand for cigarettes in the United States, which contributed to a 5.7% drop in its second-quarter revenue to $6.54 billion.

Youth vaping is becoming a public health issue.

Last April, Juul had agreed to pay 22.5 million dollars in the context of a lawsuit in the United States accusing it of inter alia; having targeted teenagers, as part of its marketing strategy.

The company had announced that it would withdraw advertisements aimed at young people, including on social networks. It has also pledged to work to ensure that its stores in Washington state do not sell products to minors.

In July 2019, the World Health Organization Health (WHO) had stated that e-cigarettes were unquestionably harmful and needed to be regulated. A report from the UN institution advises against the use of these devices for people who wish to quit smoking.

The growing popularity of electronic cigarettes in the mid-2000s, in particular among young people, worries health authorities around the world, who fear that vaping is leading young people to smoke tobacco.

Although these devices expose the user to less toxic substances than combustible cigarettes, they also pose health risks, assures the WHO report.

With information from Reuters

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