Big Tobacco Has Caught Startup Fever

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litup

Part of the Furniture Now
Oct 16, 2015
722
2,206
Sacramento, CA
Bloomberg Article
This is a long read but I thought it would be of interest to this community. Essentially, the article says that Phillip Morris is working to get out of the cigarette business. The next wave is a heat-don't-burn nicotine delivery device that doesn't create smoke.
The article also touches on how the FDA regulations have been good for "Big Tobacco" as it essentially makes it so that only those with large amounts of capital can act as startups. No one else can afford to bring new products to market.

 

bassbug

Lifer
Dec 29, 2016
1,112
905
Essentially, the article says that Phillip Morris is working to get out of the cigarette business. The next wave is a heat-don't-burn nicotine delivery device that doesn't create smoke.
Makes sense to me. If you're running a large corporation that markets an efficient nicotine delivery system you'll be better served with a mass produced chemical solution rather than an organic crop that may or not be reliable on any given year and needs a lot more manual labour to produce.
The issue about shutting out smaller startups is more to do with putting these new chemical nicotine delivery systems under the same umbrella as tobacco when in fact, the only common criteria they share is nicotine.

 

mso489

Lifer
Feb 21, 2013
41,210
60,433
One of the conundrums of Capitalism, that is supposed to be based on competition, is the built-in process by which large businesses devour small businesses and eliminate competition. Healthy in some instances, ossified and toxic in others. In pipe tobacco right now, I don't think it's serving the customer, to whatever degree that is desirable. It may be buying summer homes in Tuscany for tobacco executives, which may be good or bad -- compare and contrast (just kidding). Looks like fewer brands and blends in the future.

 

brian64

Lifer
Jan 31, 2011
9,604
14,671
Government enforced & protected monopolies is not capitalism. At least it sure as hell isn't free-market capitalism.

 

cally454

Starting to Get Obsessed
Dec 31, 2012
205
0
Totally agree I don't think we've ever seen true capitalism at work. Imho it's just flat out lazy and in poor taste to greedily devour a market with gov help where the barriers to entry are a few billion dollars

 

deathmetal

Lifer
Jul 21, 2015
7,714
32
Regulations always benefit the big guy. In my view, pipes and cigars are what all smokers want, but by marginalizing smokers, society has driven people to cigarettes and (ugh) vapes.

 

cranseiron

Part of the Furniture Now
May 17, 2013
586
49
McHenry, MS
We had a much freer market during the Gilded Age, turn of the 19th/20th century and it resulted in huge monopolies and anti trust regulation. I'm not arguing for or against regulation, it should be balanced, but a totally free market gets really messy-- lots of boom bust cycles. Two examples: the tobacco market of the 1700s in colonial America/England and, again, the Gilded Age.

 

tinsel

Part of the Furniture Now
Oct 23, 2015
531
7
Ummm ...
Is it just me or does it seem like they are trying to sell a cigarette (or "heatstick") that is half as long (thus half as much tobacco) for the same price as a pack of cigs while ALSO gouging another $90 out of you for the heater??
I mean seriously. Seems like a very profitable idea if people fall for it.
I bet the "heater" also gives out after every 40-50 packs of "heatsticks" requiring you to drop another $90 for a new one.
Meanwhile, a 100g tin of OGS is $13 and pipes never need to be recharged ... I think my mind is made up.

 

jvnshr

Moderator
Staff member
Sep 4, 2015
4,616
3,868
Baku, Azerbaijan
Great article. Thanks for sharing it. Probably this is why they did a spin off in 2008.
Altria plans to begin selling IQOS in the U.S.
Altria will be selling the product in the States where the people are more informed about the harmful effects of cigarettes and where the rules are tighter while Philip Morris International sells tobacco products in 3rd world countries where the cigarette smoking rates are still really high.

 

kuroneko

Lurker
Dec 19, 2016
31
0
Because I'm currently living in Japan, I've had the chance to try this heat-stick or IQOS or whatever and to be honest it's not bad. As a mostly pipe-smoker I rarely smoke cigarettes because I don't like the taste and I don't like the smell it leaves all over you. But this device is actually nice, it tastes decent, not quite like a cigarette and because there little to no smoke you don't end up smelling like a car exhaust for the whole day. It works with electricity and you need to charge it regularly to smoke. As a pipe smoker, I have no intention of giving up the ol' pipe but if I was a cigarette smoker I would definitely consider it.

 

pipeman84

Lurker
Dec 9, 2016
45
0
tinsel, you hit the nail on the head, the profit margin on heatsticks is more than double what it is on cigarettes: http://www.telegraph.co.uk/news/2017/03/03/tax-us-worlds-biggest-cigarette-maker-tells-philip-hammond/
It's been like that since the 1950s, when they added filters and then used less and less tobacco per cigarette to lower tar and nicotine levels. Big tobacco has betrayed its customers once by surrendering to anti-smoking fanatics. Now they're taking them for fools again...

 

warren

Lifer
Sep 13, 2013
11,700
16,209
Foothills of the Chugach Range, AK
"Big Tobacco" has to be true to the shareholders, not the smokers. That is one reason "Big Tobacco" by and large really doesn't exist as most tobacco product companies are owned by seriously big, profit motivated companies which own many profit producing companies. All brands strive to enhance customer loyalty as long as profit is there. That loyalty only goes one way when profit is considered. No profit in a particular brand or line in a brand and out it goes.

 

plugugly

Starting to Get Obsessed
Mar 9, 2015
280
32
So between Cally454 and Warren ,basically, what I'm hearing is that there's no fairness in government regulation and no real loyalty/morality in capitalistic/big tobacco - only profit motive.
As Captain Renault (sort of) said in Casablanca, "I'm shocked, SHOCKED to find immorality going on in Big Tobacco" ... "Round up TWICE the number of usual suspects!"
Plugugly

 

pipeman84

Lurker
Dec 9, 2016
45
0
Big Tobacco could be true BOTH to shareholders and smokers...and it was, more or less, up to the late 90s or so. Then they started parroting almost every lie spouted by the anti-smoking establishment. PM appears to be the worst of the bunch in that respect.

 

warren

Lifer
Sep 13, 2013
11,700
16,209
Foothills of the Chugach Range, AK
I doubt Big Tobacco exists as an altruistic entity. They are in business to make money and, per various laws, look after the best interests of shareholders/owners. Wrong decisions at the Board of Directors/officers level can result in civil and, sometimes, criminal charges and penalties. Companies are going to look after the consumer only when it is beneficial the company and therefore the owners/shareholders.

 

jefff

Lifer
May 28, 2015
1,915
6
Chicago
I would argue Altruism IS self interest. We do something altruistic because it makes us feel good.
Unless of course, it is court ordered.

 

perdurabo

Lifer
Jun 3, 2015
3,305
1,575
"Altruism is when we act to promote someone else's welfare, even at a risk or cost to ourselves." There is no self interest in Altruism.
I used to have a twitter account. I'd get on there and really expect to make a difference in the world by educating the non educatable. You have hope that your fellow man can learn from experience, conversation, and debate. (This is were you laugh) :rofl:
I learned we really live in a Kornbluth short story Marching along with Morons, battling against an ideology that has sprouted it seeds in early education to universitiy. Creating hate for those that have and pity for those that can not be happy with what they have. Yea, you can't compete with an ideology. No more Altruistic slithers of knowledge falling on deaf ears for the benefit of someone else's welfare, even at the cost or risk of a heart attack in the process. Words can mean whatever you chose, Captialism can be whatever you want it to be. The worlds worst nightmare! Just remember, your choices are narrowing......

 
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