LONDON (Reuters) – Silicon Valley e-cigarette start-up Juul Labs is bringing its small flash drive-sized vaping gadget to the United Kingdom this week, aiming to breed its break-neck U.S. progress abroad.
Since launching in 2015 Juul has reworked the market within the United States, the place it now accounts for almost 70 p.c of tracked e-cigarette gross sales.
Juul says it targets grownup people who smoke, but it surely has confronted scrutiny over the recognition of its merchandise with youngsters. In April the U.S. Food and Drug Administration launched a crackdown on the sale of e-cigarettes and tobacco merchandise to minors, notably these developed by Juul Labs.
A day after the FDA’s announcement, Juul revealed a number of initiatives to deal with the difficulty, akin to earmarking $30 million (22.67 million kilos) to assist government initiatives to boost the minimal tobacco-buying age.
Grant Winterton, Juul Labs’ president for Europe, the Middle East and Africa, informed Reuters that its actions in Britain would adhere from the begin to its new “social and public policy”, which requires utilizing solely adults in its advertising and marketing and ensuring its model ambassadors are older than 28.
“It’s true there are too many teens using our product, but they are far the minority,” Winterton stated.
Public well being advocates are nonetheless debating whether or not e-cigarettes symbolize a well being threat or potential profit.
The Juul gadget shall be obtainable in 250 vape outlets throughout the UK by the top of this week. A starter pack, together with the gadget and 4 nicotine pods, will value about 29.99 kilos ($39.66).
Winterton stated Britain was Juul’s third market after the United States and Israel, partly as a result of it has the world’s “most supportive government” in the case of encouraging people who smoke to vape. Also on the radar are France, Germany and Italy.
The San Francisco-based company not too long ago raised $650 million in fairness financing as a part of an funding spherical geared toward elevating $1.25 billion, a securities submitting confirmed final week.
A supply aware of the matter stated the spherical can be accomplished by the top of July and that it valued Juul at greater than $15 billion.
Winterton and co-founder James Monsees declined to touch upon company valuation, income or progress.
Juul’s essential rivals are tobacco corporations akin to Altria, Philip Morris International and British American Tobacco, who additionally promote e-cigarettes.
Despite many conferences with huge tobacco corporations, Monsees stated he was not for the time being in partnerships or a takeover, saying their missions had been at odds.
If Juul ever believed partnership with a type of corporations would assist to get rid of cigarettes, then it might take it very significantly, he stated.
Apart from elevated scrutiny and competitors, Juul additionally faces potential U.S. tariffs on its digital gadgets, that are made in China.
“We have a number of different options, but we’re still looking at the implications of the tariffs so we can understand what strategy would be best for us,” Monsees stated.
The empty pods are made in China however extra of their manufacturing course of is moving to the United States, he added.
($1 = zero.7561 kilos)
Reporting by Martinne Geller; Editing by David Goodman