After two years of arduous battle, fought in courtrooms and in the Palaces that count, and with a crisis that has left a few thousand jobs in the field, the electronic cigarette market is restarting. The novelty comes from the Italian launch of "JAI", the first electronic cigarette from a tobacco multinational in Italy, Imperial Tobacco (which produces brands such as John Player Special and Gauloises), through its subsidiary Fontem Ventures (which has an office in Rome), changes the scenario of the ecig market. It deals with. News that comes as a breath of fresh air – indeed, of steam – for this sector. The launch in Italy (the only country where there were no multinationals in the e-cig sector) follows that in France: the two countries are seen as those with the largest growth margin in Europe.
Therefore Fontem Ventures arrives in Italy, a company founded in 2012, which has become a leader in the sector following the acquisition in 2013 for $75 million of the patents of Dragonite International Ltd. of Hon Lik, the famous pharmacist, the inventor of the first electronic cigarette, today one of the company's directors. A leadership destined to grow further with the $7,1 billion deal – currently awaiting approval by US antitrust authorities – which will also lead to the acquisition of Blu eCig, American company number one in the world market, by ITG.
Healthcare. The bombardment of news linked to this new product is now daily between studies - or rather, newspaper headlines after studies - which say they are bad, sometimes denied even by the authors themselves, and others which instead extol its characteristics as a useful tool such as I also support quitting smoking. In this regard, perhaps the work carried out by the Istituto Superiore di Sanità - which seems to be giving excellent results for e-cig - will help to clarify the issue.
Taxation. In the last 18 months in Italy the e-cig theme has mainly revolved around the tax issue. Courses, counterclaims, lobbies, and so on and so forth. Following the Government's enactment of the "tobacco" Legislative Decree which reformed the tax system for e-cigs (and launched the one for Heat not Burn), and after the ADM's Determination which established the presumed equivalence ( €3,73 + VAT for 10ml of e-liquid), in fact since 21 January the tax situation has now been defined (the Lazio TAR could still intervene, but - as a well-known undersecretary said - "In Italy a TAR is not denied to anyone").
regulatory. Thanks to the work of the Ministry of Health and sector associations, Italy is years ahead of the USA and the rest of Europe on the subject of rules. In fact, in our country there is a ban on the sale to minors; there is a system of authorizations and controls on the production of liquids; the labels they follow very restrictive rules, advertising is regulated (e.g. prohibited in certain time slots, etc.); the ban on vaping is foreseen in some areas (schools, hospitals, etc.) and a system of controlled self-regulation is in place in others (cinemas, theatres, etc.). It is therefore absolutely not that far-west that every now and then someone - technically ignorant of the Italian situation - would like to make us think.
The importance of the multinational
Fontem Ventures will put its e-cigs on sale HER – in the shape of a cigarette, in satin black, very different from the big ecigs in many photos – through the network of tobacconists. A strong choice, and perhaps even inevitable for a company whose parent company does its business entirely through this network. The very absence of multinationals from the market, and the frontal confrontation with tobacconists, was the cause (together with an aggressive media campaign) of the boom in the electronic cigarette market in Italy and of many of the existing problems. Despite being described by many as the devil, if we think only of Italy, the multinationals pay around €10 billion into the state coffers, and they do so thanks to the sales network of 55 tobacconists scattered throughout the country.
Good for the industry and for consumers. Vaping products – as they are aimed at harm reduction – should in fact be as accessible as possible to smokers, and with appropriate prices. Tobacconists will allow the product to spread, especially when they will be clear that by selling an e-cig, a refill or liquids would allow them to earn three or four times what they do with a pack of cigarettes. Furthermore, thanks to tobacconists, the product will be able to spread throughout the country, satisfying the needs of many consumers still alien to online purchases (after all we are one of the most backward countries in Europe on this) or who have not yet approached the product.
The absence of the same multinationals in the e-cig, strong taxpayers well known by the State, has instead been a problem for a State like ours, wary of free enterprise and any innovation, healthy or not. Added to this is that tobacconists have experienced the electronic cigarette with rejection, also understandably. In fact, the law prevented them from selling e-cigarettes, and from there the boom of thousands of shops sprung up in an even disorderly manner, which created "social alarm" (absurd but it is a fact) and provoked the reaction of the FIT (Federation Italiana Tobacconists) and not only, leading after a long process to the current situation. A problem however solved by Law 99/2013, which allows the sale of e-cigs by tobacconists. On the other hand, where there hasn't been all this opposition – see Germany – the market is experiencing a continuous boom.
"We believe that in Italy the tobacconists' network is the preferred channel also by virtue of the fact that there has always been strong and particular attention to the ban on the sale of certain products and services (from tobacconists to games) to minors" , explains Valerio Forconi, spokesperson for Fontem Ventures: “Today Italy presents a regulatory clarity on e-cigarettes to enable us to enter the market. It is a market which in recent years has recorded significant fluctuations due precisely to regulatory uncertainty and the instrumental demonization by some of the impacts on health.
The important aspect of this entry into the market, however, is also determined by the possibility that there may be a return for Italian companies, always considered a global excellence in the production of aromas. "We'll see how things go - adds Forconi - with the prospect of increasing investments in Italy also on the basis of how the regulation and above all taxation will evolve".
Italian companies. However, the arrival of the multinationals and the sale to tobacconists does not seem to scare the medium-sized Italian companies strong in the production of liquids, in which Italy has always been a world leader. On the contrary, arms open to both: “The choice of Imperial Tobacco can only do good for the growth of the sector, against which a two-year bombardment will perhaps end. Where the multinationals will then sell the e-cigarettes is irrelevant to us, also given that we believe in the free market. In any case, the consumers will win, who will have more and more access to a product which – whatever some studies of dubious origin say and in some cases even denied by the authors themselves (e.g. the one on formaldehyde) – is helping millions of people around the world the world. And there's no going back."
The market. The worldwide e-cigarette market is estimated at over 2,5 billion dollars, the growth of which according to the investment bank Wells Fargo in 2014 was 23%. In Italy in 2012, before the decline that occurred in 2014, there were over 1 million vapers (ISS - DOXA data) for a total turnover of 350 million euros (Fiesel Confersercenti). Data among the best in Europe, confirming the appeal of the product in the beautiful country where – despite a halving caused mainly by the “disappearance” of the product caused by tax increases (and the consequent zeroing of investments in marketing and communication) – room for growth is enormous.
