Philip Morris Acquires British E-cig Giant Nicocigs

Jul 07, 2014
nicocig_starter_pack_700x700_3Last Thursday, Philip Morris International announced its acquisition of Nicocigs Ltd, Britain’s largest e-cigarette producer. This is the latest move that the U.S. cigarette maker has made to establish itself in the fast growing e-cig industry. Recent reports show that e-cig sales are on track to quickly outpace the sales of traditional tobacco. Over the past few decades, overwhelming scientific evidence, intense public health lobbying, and persistent anti-smoking media campaigns, have created a market for cigarette alternatives.

Enter the electronic cigarette which is made of plastic or glass cigarette-like tubes that holds a battery and a liquid cartridge. Inside of the cartridge is a flavored juice made of propylene glycol, a variety of other chemicals. The juice can contain tobacco-based nicotine, synthetic nicotine, or be nicotine free. The battery generates a vapor from the flavored juice. Flavors range from blueberry to cappuccino.

The amount that Nicocig sold for is still undisclosed, but Philip Morris notes that the deal isn’t subject to regulatory approval. This is a huge step for Philip Morris, as it seeks to make its mark on the booming e-cig industry in the U.K., which is made up of about 250 independent e-cigarette suppliers, who sell to 1.3 million customers.

The acquisition automatically gives Philip Morris 27% of the e-cig market in the U.K. The company’s bestselling product is currently Nicolite. Because of the flat profits produced by tobacco industry and charges related to halting cigarette production in the Netherlands and Australia, Philip Morris made the decision to cut its earnings guidance for the year.

This is not the first major tobacco company to invest in the e-cigarette market. In early June, Japan Tobacco Inc. bought Zandera Ltd., maker of the E-lite brand. British American Tobacco acquired CN Creative, the creators of e-cigarette Intellicig in 2012.

Drago Azinovic, Philip Morris’s Europe regional president, says “This acquisition provides [us] with immediate access to, and a significant presence in, the growing U.K. e-vapor category.”

As large tobacco companies enter the e-cig market, it is more important than ever to legitimize your e-cig business by getting an electronic cigarette merchant account with eMerchantBroker.com. We are the leading high-risk account processors in the business. Our full suite of electronic payment options will provide your e-cig customers with a wide variety of payment options with our electronic cigarette merchant accounts.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

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Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

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