In another downturn in international markets, Juul plans to significantly reduce its European presence and stop selling in Austria, Belgium, Portugal, France and Spain, learned BuzzFeed News.
Electronic cigarette maker to leave France later this year and withdraw from other countries in July, according to an employee familiar with the matter, who spoke on condition of anonymity because they were not allowed to speak to the media.
The move, which parts of the company learned about this week, means that hundreds of workers in the affected countries will be laid off. Earlier this week, the Wall Street Journal reported that the once-top San Francisco start-up plans to cut about a third of its 3,000 employees.
Once Juul stops selling in these five countries, its presence in Europe will be limited to the Czech Republic, Germany, Ireland, Italy, Poland, Switzerland and Ukraine , as well as Russia and the United Kingdom, two of its largest markets in the world.
The reasons why Juul left the country are mixed, the employee said. Spain and France had relatively high sales compared to most European markets, but not enough to justify the staff needed or the problems of local regulators. Austria, Belgium and Portugal were deemed too small to continue investing. The cuts are unrelated to the coronavirus pandemic, they said.
A Juul spokesperson did not immediately return a request for comment.
Juul has also held back expansion into markets outside of Europe in recent months, postponing a launch in New Zealand and halting sales in Indonesia. The company also considered leaving South Korea and was expelled from China and India. In February, Juul forced two senior executives to oversee the company’s European and South Asian markets and reduced its offices in Singapore.
In 2019, sales in Europe and the Middle East generated about $ 107 million, well below the department’s target of about $ 600 million, previously reported BuzzFeed News.
The European Union has strict regulations on electronic cigarettes that have made the region a challenge for Juul and other manufacturers, experts say. The nicotine limit for electronic cigarettes in Europe is 20 milligrams per milliliter of liquid, while in the United States, where there is no legally required cap, Juul pods can contain up to 59 milligrams of nicotine per milliliter.
Probably because of this difference, “no EU country has seen the increase in popularity of electronic cigarettes among young people that has been seen in the United States,” said Filippos Filippidis, public health researcher at Imperial College London, by email. Due to restrictions that make it harder to handle vaping devices, he noted, Europe has also apparently been spared the epidemic of THC-related lung disease that has hit the United States. United last year.
When EU regulations came into force in 2016, Juul was not yet on the market and most brands of electronic cigarettes fell under the limit anyway. Then Juul, who was separated from Pax Labs in 2017, came up with the innovation of e-liquids filled with nicotine salts, which facilitated the inhalation of higher concentrations of nicotine vapor.
While Juul was charged with helping to trigger the teenage vaping crisis, the company said it never intended to do so and that its stated mission was to help adult smokers quit smoking conventional cigarettes.
To what extent has this really been done? “A crucial political issue,” David Hammond, a professor at the University of Waterloo who studies international tobacco control policies, told BuzzFeed News. “And as far as I know, we don’t have that answer yet. “
Europe still has some of the highest adult smoking rates in the world, although more people have also quit smoking in recent decades.
Juul is betting much of his future on the United States, where he and other manufacturers of electronic cigarettes must obtain clearance from the Food and Drug Administration to continue selling. A May deadline for submitting requests has been extended to September due to the coronavirus.
Juul and its main shareholder, tobacco giant Altria, are also facing an antitrust lawsuit. Last month, the Federal Trade Commission alleged that the participation of about a third of Altria in Juul had eliminated competition in the market for electronic cigarettes. The deal, which cost Altria nearly $ 13 billion in late 2018, valued Juul at $ 38 billion. Altria has since reduced this valuation to $ 12 billion.