If you still had doubts about the growing popularity of electronic cigarettes affecting tobacco companies’ sales, this piece of news should put your doubts to rest. Last week, the Italian union of tobacco operators appealed to a regional court in an attempt to stop the sale of e-cigarettes, claiming that the were “unfair competition”.
Around the world, tobacco companies are struggling to keep their profits and share prices up, while struggling with a steadily declining number of smokers, counterfeit trading and smuggling. And if those problems weren’t hard enough to deal with, the growing number of e-cigarette users is threatening to really put a dent in their bottom line. According to a recent Doxa survey, out of the 10.8 million tobacco users in Italy, over 20% are using or intend to use electronic cigarettes, and that’s really putting the pressure on traditional tobacco businesses. Last week, they tried to fight back, by appealing to a regional court in Lazio, to stop the sale of e-cigs. “It’s unfair competition,” said Enzio Perotta president of the union of tobacco operators in a press release. He claims e-cigarettes should be taxed just like tobacco cigarettes, and their distribution done selectively. He even went as far as to say that “electronic cigarettes are a way of consuming nicotine, they are just selling cigarettes in liquid form”. Is that not the most preposterous thing you’ve heard in a long time? I’m not even going to try and explain why his statement makes absolutely no sense, but if you know anything about how electronic cigarettes work, you understand what I mean.
Electronic cigarettes are a big business in Italy. There are sold in over 1,000 specialized shops, and around 400,000 consumers, according to Anafe, and those numbers are rising fast.The turnover for the e-cigarette industry has been 90 million euros ($11.5 million) in 2012, 25% higher than the previous year, and it’s estimated 2013 will be an even better year for vapor business. That’s troubling news for the tobacco companies, and they’re desperate to fight this threat in any way possible, including playing the unemployment card. “There is a very large drop in consumption due to smuggling, counterfeiting and the dissemination of the electronic cigarette,” said John Risso, National President of the Federation of Italian Tobacconists (FIT). “If the trend of the decline in consumption of manufactured tobacco continues, the impact on employment would be devastating: about 20,000 jobs would be at serious risk. “ That’s a sensitive spot, and these guys know it, but in reality, a lot of these people could find new employment in the e-cigarette industry, if it ever gets big enough, plus the estimated health-related benefits alone would be compensation enough for the economy. But the Federation of Italian Tobacconists suggests applying tobacco tax duties on e-cigarettes would be much more profitable for the Government, as it would bring an additional $1.28 billion to the national budget. Considering Italy’s financial problems, that may seem like to valuable an opportunity to pass up.
According to the aforementioned Doxa survey, 70 percent of Italian respondents are using e-cigarettes as a means to quit smoking. The statement of a pharmaceutical executive (of all people) who chose to remain anonymous is especially revealing: “I used to smoke more than a pack a day, then I tried [e-cigarettes] thanks to a friend. I stopped using traditional cigarettes. I feel better physically and I’m saving money. I am amazed by the polemic concerning the alleged harmfulness of electronic cigarettes. I think it is a matter of loss of money for the government, which can’t apply taxation to them yet. “
Source: The Epoch Times