Altria Makes Mark in Electronic Cigarette Category

Published in CSP Daily News

Nu Mark subsidiary to launch MarkTen e-cig brand in Indiana in August

By  Greg Lindenberg, Online Editor

RICHMOND, Va. -- The third of the Big Three tobacco companies to market an electronic cigarette, Altria Group Inc., through its Nu Mark LLC subsidiary, is launching its first e-cigarette under the MarkTen brand with limited distribution in Indiana beginning in August.

As reported in a Raymond James/CSP Daily News Flash on Tuesday, MarkTen comes in two varieties, classic and menthol. It can be used as a disposable or rechargeable--consumers can purchase replacement cartridges and an accessory kit that includes charging devices. Each e-cigarette cartridge contains approximately 1.5% nicotine by weight.

"MarkTen e-cigarettes are designed to appeal to both current adult smokers who are interested in tobacco alternatives to cigarettes and current adult 'vapers'," the company said in a new product fact sheet provided to CSP Daily News. "It offers adult vapers a familiar draw with an appealing taste. The unique Four Draw technology is designed to give adult vapers a more consistent experience."

The ingredients in MarkTen e-cigarettes are tobacco-derived nicotine, water, propylene glycol and glycerol. The menthol version also includes menthol flavoring.

The product's packaging carries this warning: "This product is not a smoking cessation product and has not been tested as such. This product is intended for use by persons of legal age or older, and not by children, women who are pregnant or breast feeding or persons with or at risk of heart disease, high blood pressure, diabetes or taking medicine for depression or asthma. Nicotine is addictive and habit forming, and it is very toxic by inhalation, in contact with the skin or if swallowed. Nicotine can increase your heart rate and blood pressure and cause dizziness, nausea and stomach pain. Inhalation of this product may aggravate existing respiratory conditions. Ingestion of the nonvaporized concentrated ingredients in the cartridges can be poisonous. CA Proposition 65 WARNING: This product contains nicotine, a chemical known to the State of California to cause birth defects or other reproductive harm."

Packaging states “Underage Sale Prohibited”.

A contractor in China manufactures the product, and an affiliate of Nu Mark produces the e-liquid in the United States.

Altria said Nu Mark will use a variety of communications vehicles to drive awareness, trial and purchase among adult smokers and vapers.

Altria is the third of the Big Three tobacco companies--Altria, Reynold American Inc. and Lorillard Inc.--to market an e-cigarette in an industrywide push to diversify beyond the traditional cigarette business, reported the Associated Press.

The Richmond, Va.-based company declined to say whether it plans to expand beyond the initial statewide test market or whether it plans to advertise on TV, where tobacco companies have long been prohibited from marketing traditional cigarettes.

During an investor presentation on Tuesday, CEO Marty Barrington said the company has "spent a good deal of time studying the category and the business opportunity. ... The category is in its early stages and time will tell how it will evolve."

The e-cigarette is expected to sell for about $9.50, said the report. Prices for additional cartridges and recharging kit were not available.

Last week, Reynolds American Inc., owner of the nation's second-biggest tobacco company, announced that it is launching a revamped version of its Vuse brand electronic cigarette in Colorado in July, with its sights set on expanding nationally. Lorillard Inc., the nation's third-biggest tobacco company, acquired e-cigarette maker Blu eCigs in April 2012 and has expanded to more than 80,000 retail outlets.

Altria also said Tuesday that it is expanding its Verve chewable, disposable nicotine discs from 60 stores to about 1,200 throughout Virginia in the second half of the year, reported AP.

Altria directly or indirectly owns 100% of each of Philip Morris USA, U.S. Smokeless Tobacco Co. LLC, John Middleton Co., Nu Mark, Ste. Michelle Wine Estates Ltd. and PMCC. Altria holds a continuing economic and voting interest in SABMiller. The brand portfolios of Altria's tobacco operating companies include Marlboro, Black & Mild, Copenhagen and Skoal.