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PMI Progress Update: Feburary 2024

For so long, PMI downplayed the role of e-vapor in its smoke-free portfolio with undivided focus, firstly, on heated tobacco in the international markets and, then, on nicotine pouches in the US. PMI’s lack of focus in the e-vapor category was based on its unwillingness and inability to compete with hundreds of small (“under-the-radar”) players as well as a lack of a strong product portfolio. However, at the 2024 CAGNY Conference, PMI offered hints of change in its strategy for the e-vapor category.

PMI now underlines the emerging signs of better regulation & enforcement – which will eventually eliminate the vast majority of the small players and result in market consolidation (i.e. less price-based competition and better profitability for the major players). PMI also admits the “substantial consumer demand with more than 60Mn adult vapers (ex-China & Russia)” – which is roughly twice as many as heated tobacco users.

Regulation, enforcement & consolidation: the progress (towards an “optimal” set-up) will take time and will not be uniform across the markets. However, PMI sees the light at the end of the tunnel and is trying to get ready to jump on the opportunity as the market environment becomes suitable (i.e. selective market play). Although, in strictly commercial terms, the strong category share progress achieved (in a small subset of the e-vapor market) in Italy and Czechia through VEEV re-launch means little, it proves that PMI’s e-vapor portfolio (both disposable and pod-based products) is becoming competitive.

VUSE Launch in Malaysia: Feburary 2024

In Q4 2023 Earnings release, BAT Malaysia reported 25% decline in operating profit (despite 5% increase in revenue) due to the sizable investments made to build brand visibility & image of VUSE e-vapor products. In April 2023, Malaysia removed the liquid nicotine used in e-cigarettes from the list of substances controlled by the 1952 Poison Act – effectively legalizing e-cigarettes while imposing an excise tax of 40 sen/ml (further reading: Regulation: E-cigarettes).

In August 2023, BAT launched its VUSE GO (disposable vape, up to 1,500 puffs) in Malaysia. VUSE GO (3% nicotine) is available in 7 different flavors (mango, strawberry, mint, blueberry, tobacco, watermelon and grape) and retails at MYR22 ($4.6). BAT aims to quickly ramp up VUSE to the level of Dunhill – which has 32% share in the Malaysian cigarette market (62% share in the premium segment).

Elf Bar: December 2023

Ahead of the consultation deadline for the Tobacco and Vapes Bill in the UK (ending on December 6), Elfbar announced that they are dropping the youth-appealing dessert and soft drink flavors1. Recall: our “Regulation: E-cigarettes” write-up.

Elfbar and Lost Mary already stopped Bubble Gum, Cotton Candy, and Rainbow Candy flavors and renamed Gummy Bear as Gami – even if the changes will become apparent on the shelves following the depletion of the trade inventories. Following BAT’s earlier announcement, Elfbar also called for a licencing regime for vapes (similar to tobacco and alcohol) and rules requiring retailers to display vapes behind the counter. Elfbar argued against the introduction of an excise tax on vapes claiming that a such tax would encourage vapers to switch to illegal vapes or relapse back to cigarettes.

According to the NielsenIQ data, Elfbar and Lost Mary make up more than half of the UK’s disposable vape sales and sold more than £900Mn worth of vapes (more than 160Mn units) in the last twelve months. NielsenIQ numbers only capture around half the market and don’t include vape shops, online retailers and low-tiered c-stores.

PMI – VEEV Accents: September 2023

At the 2023 Investor Day, PMI highlighted e-liquid formulation (that is different from the more natural tobacco taste) as the primary reason of smokers not switching exclusively to e-cigarettes. In order to deliver a better tobacco flavor experience, PMI developed VEEV Accents by extracting genuine flavors from tobacco leaves. VEEV Accents’ pilot launch in Canada resulted in a significantly better sales performance than the competition’s tobacco variants (+42% more pod uptake in the same stores). As the flavor restrictions (i.e. ban on sweet/fruity flavors) become more prevalent in the e-cigarette category, sensorial quality of the tobacco flavored vapes will turn into an increasingly important success factor.

VUSE: September 2023

Youth access is the Achilles’ heel for vaping products in terms of their potential to contribute to the public harm reduction. To help to reduce youth access, Imperial Tobacco Canada (a BAT subsidiary) rolls out the Vuse Pass in all its Vuse retail stores across Canada2,3 – following a successful pilot in Toronto.

The Vuse Pass allows access to the VUSE stores through bio-metric verification of palm scan. Customers need to sign up for a one-time age verification. In cases where customers chose not to sign up, the store clerk continues to verify age manually. The Vuse Pass aims to eliminate the possibility of fake and shared IDs while facilitating access for the verified legal-age nicotine users.

VUSE is the market leader in Canada with 90% SoM in closed-system e-cigarettes.


  1. https://www.bbc.com/news/business-67570973 ↩︎
  2. Vuse Pass.Canada ↩︎
  3. https://www.vuse.com/ca/en/blog/introducing-vuse-pass ↩︎

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