Deep discount is in Altria’s playbook, as illustrated in its competition against Zyn. British tobacco also tend to utilize price wars in promoting its HNB and Alto products. Given there is little brand or product loyalty among the vapor users, do you think the competition will have a meaningful impact on both company’s book?
Thanks for the comment, Robin. Promotional discounting will continue to be a major factor for e-vapor and HTP regarding product trial, repeat purchase, and adoption. There is no definitive path on how it will unfold. However, if additional enforcement actions continue to defend incumbents, we should expect rational pricing amongst the group. And even when subsidizing devices, I think there is considerable room for pricing on pods. Just like HTP, taxation dynamics can allow them to be sold on a retail level lower than cigarettes yet carry a greater contribution margin for manufacturers. Regulation still largely in play for these new products.
Deep discount is in Altria’s playbook, as illustrated in its competition against Zyn. British tobacco also tend to utilize price wars in promoting its HNB and Alto products. Given there is little brand or product loyalty among the vapor users, do you think the competition will have a meaningful impact on both company’s book?
Thanks for the comment, Robin. Promotional discounting will continue to be a major factor for e-vapor and HTP regarding product trial, repeat purchase, and adoption. There is no definitive path on how it will unfold. However, if additional enforcement actions continue to defend incumbents, we should expect rational pricing amongst the group. And even when subsidizing devices, I think there is considerable room for pricing on pods. Just like HTP, taxation dynamics can allow them to be sold on a retail level lower than cigarettes yet carry a greater contribution margin for manufacturers. Regulation still largely in play for these new products.