14
TOBACCO BUSINESS
SEPTEMBER/OCTOBER 2013
NEWS & TRENDS
SEPTEMBER/OCTOBER 2013
HigHligHts
Cigarette List
Price Hike
Three large manufacturers bumped
up prices in June.
On June 6, Philip Morris took a price hike by re-
ducing its off-promotion allowance on Marlboro
and L&M brands by six cents, and taking a six-
cent-per-pack increase on all other brands. Lo-
rillard and Reynolds American followed suit the
very next day, implementing a six-cent-per-pack
increase on all key brands. Philip Morris’s price
hike came first, followed closely with increases
by Lorillard and Reynolds.
Patrick Hurd
Appointed Kretek
Sales Vice President
Kretek International, Inc., exclusive im-
porter and marketer of Djarum Cigars,
Cuban Rounds Cigars, EZ Cig and Cig2o
e-cigarettes, along with Voodoo Hookahs
and a broad range of general merchandise
brands, has announced Patrick Hurd as Kretek’s vice president of
sales. Hurd will supervise Kretek’s sales department structure and
oversee new retail business development, as well as retain his cur-
rent duties as general manager of Ventura Cigar Company, Kretek’s
premium cigar group.
V2 Expands from Online to Brick and Mortar
E-cigarette maker has partnered with National Tobacco to branch into retail stores.
Founded in 2009, Miami-based V2 Cigs
has built a large base of customers selling
its products online. After partnering with
RYO manufacturer National Tobacco Co.
recently, the company has now branched
out into traditional retail.
The partnership with National Tobacco,
“is something we’re excited about and
fulfills an answer on how we make a
competitive move into traditional retail,”
CEO and co-founder Andries Verleur told
investors and industry observers on a re-
cent conference call with Wells Fargo to-
bacco analyst Bonnie Herzog. “In almost
every way the partnership has exceeded
our expectations.”
After only six weeks, V2 received com-
mitments to distribute its e-cig products
to 10,000 retail locations, reported Verleur,
who predicted that figure would grow to
more than 35,000 by year end.
Verleur went on to acknowledge that
all the Big Three cigarette makers have
now entered the e-cigarette market,
but said V2 is well-positioned to take
on Altria, RJR and Lorillard, as well as
pureplay e-cigarette companies like
NJOY, Logic and 21st Century.
“We will hold a substantial market
share because we have a committed
customer base,” he said, noting that
V2 is working with National Tobacco Co.
(NTC), which makes Zig-Zag and Beech-
Nut tobacco, to distribute its disposable
model, along with rechargeable Express
Kits and refill cartomizer products.
Analyst Herzog says the rush to mar-
ket is to be expected, noting that her firm
“anticipates the e-cig market will hit $2
billion by end of this year” and “will sur-
pass conventional cigarettes by 2017.”
During the call, Verleur addressed
the prospect of regulation of the in-
dustry by the FDA, noting that he is
more concerned about local and state
regulations and taxation. However, he
also reported that his company is join-
ing forces with other manufacturers to
educate members of the FDA’s Center
for Tobacco Products, including Mitch
Zeller, who now heads the agency. “We
know we are to become a regulated in-
dustry,” said Verleur, who feels the FDA
will issue a deeming regulation during
2013. “This deeming regulation is not a
death sentence.”
While acknowledging the rising pop-
ularity of e-cigarettes in c-stores and
tobacco shops, Verleur remains confi-
dent about the growth potential for on-
line sales, noting that V2 sales online
have tripled over the past five to six
months.
