Vaping takes off as e-cigarette sales break through $6bn

UK sales of nicotine replacements such as patches and gum fell for the first time in years as consumers turned to vaping devices to kick the habit.

In a sign that British consumers are increasingly using e-cigarettes as a crutch to quit smoking, domestic vaping sales increased by 75pc to £459m while spending on nicotine replacement therapies such as patches and gum fell by 3pc to £137m, its first decline since 2008, ending four years of annual growth of between 5pc and 6pc.

Globally, sales of vapour devices grew by 59pc to £3.9bn – breaking through $6bn for the first time – as business in its largest market, the US, more than doubled to £1.7bn, according to data from Euromonitor International.

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Shane MacGuill, senior tobacco analyst at Euromonitor, said he was “hesitant” to conclude from the global data that consumers trying to kick the habit are increasingly choosing e-cigarettes over more traditional therapies, but said that the trend in bigger markets such as the UK “does look a lot like correlation and perhaps even causation”.

UK vaping sales inched past nicotine replacement sales in 2012 and are now more than three times higher.The UK is now the second largest market for vaping devices in the world after surpassing Italy, where sales fell by 39pc last year.

The proportion of adults in the UK who smoke dropped from 27pc in 1999 to 19pc last year, falling from 24pc to 17pc in the US.

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E-cigarettes present one of the more serious threats to the traditional tobacco industry, which is struggling to combat smoking bans, rising taxes, increased health awareness and an overall decline in smokers.

“Up until now there has been no direct competition for cigarettes in a meaningful sense, and nicotine replacement therapies were certainly not providing that,” said Mr MacGuill. “The days of the traditional cigarette are numbered – the only question is how long that process will take – and e-cigarettes have the potential to drastically shorten the shelf life of traditional tobacco products.”

Combined with new laws in Australia and the UK that require cigarette packets to have plain packaging, vaping is “a difficult proposition for the tobacco industry and something it should be very worried about”.

The death knell of Big Tobacco should not be sounded yet, though, as the value of the cigarette retail industry in the UK is still more than 30 times larger than its electronic alternative.UK cigarette sales increased by less than 1pc to £15.5bn last year, while the global market grew by 6pc to nearly £452bn.

However, “any value growth is because cigarettes are getting more expensive”, said Mr MacGuill, attributing most of the price rises to higher taxation. “Volume growth is very limited globally.”

Tax accounts for up to 90pc of the price of a packet of cigarettes in the UK, which now costs on £9.16 on average, up from £4.98 a decade ago, according to the Tobacco Manufacturers’ Association.

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The exception to the rule is China, the largest tobacco market in the world, where cigarette sales jumped by 9pc to £137bn.

Mr MacGuill explained that the prevalence of smoking in China is flat, but as the population is large and growing, the total number of smokers – currently about 300m, a third of the world’s total – is rising.By 2018, one in two smokers in the world will be in China, according to Euromonitor’s estimates.

“You’re talking about a market where smoking was banned in schools last year,” and in Beijing offices and public transport last month, he said. “That’s an indication of how deeply entrenched smoking is in China.”

Via [www.telegraph.co.uk]

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