Last week blucigs announced that they sold themselves to Lorillard who paid $135 million in cash for the acquisition. A gut instinct for most people we talked to said that blu sold out to a tobacco company. blu’s CEO – the ever-ambitious fellow classified this as a move that will help blu to go to the next stage in its efforts to expand. It goes without saying that his paycheck is going to get fatter and he also got a nice package in the process.
But beyond this initial gossip it signals some interesting times for the ecig industry. Some developments are certain in next few months:
- More acquisitions: there will be a wave of acquisitions in its wake: the big tobacco guys will buy up more electronic cigarette companies. Are V2, SafeCig and GreenSmoke next? Even Mistic, NJOY and Gamucci – retail oriented brands may be for sale as the retail ones actually line up better with the tobacco companies’ supply chains.
- Smaller companies will need to prepare for more litigation and trademark issues
- Manfacturers will probably be forced into exclusive contracts as big tobacco flexes their muscle or they will lose their biggest clients in one shot
- Expect some brands to gain international recognition
- More focus on branding as companies rush to establish their own brand’s strength
- Wolf in a sheepskin: a weird consequence will probably be that ecig companies have now got the strong backers/lobbyists: the tobacco lobby themselves. Who would have guessed such a reversal of roles?
- The tobacco companies might get rid of smaller companies as they outmaneuver them.
No matter what happens it does not seem very likely that tobacco companies will try to squelch ecigs. What is more worrisome for the eCig consumers is that eCigs may cost more. A whole lot more.