Vaping giant JUUL swoops Down Under

James Frost

AFR

Jun 21, 2019

A global e-cigarette giant backed by Marlboro has laid the foundations for a foothold in Australia as its plans for international expansion gain momentum.

The Australian Financial Review can reveal the tobacco alternative JUUL has swooped on more than a dozen Australian trademarks as it rolls out its Asia Pacific expansion strategy.

The JUUL system consists of a cylindrical device and replaceable pods that contain nicotine. The device, which looks like a USB stick, contains an element that heats the pods and emits a vapour similar to cigarette smoke.

Among the pieces of intellectual property the $50 billion company is looking to secure are its logo, its distinctive hexagon-shaped pods and the verb “juuling”.

Last week it applied to trademark the phrase “make the switch” – its international campaign slogan and pitch to smokers around the globe.

Australians keen to quit smoking and switch to vaping however may have to wait a little longer. A JUUL spokesman said the activity was not confirmation that a launch in Australia was imminent.

JUUL has forecast revenues of $US3.4 billion in 2019 according to Bloomberg.

“The trademark applications associated with the company and brands of JUUL Labs are part of the normal business process to secure our brand identity and intellectual property rights,” the spokesman said.

“This is not reflective of any definitive plans to launch in markets where these applications and registrations are made.”

Global mission

JUUL is sold in the US, Canada, Britain, France, Spain, Ireland, Germany, Italy, Austria and Russia. Closer to home it is available in Indonesia, the Philippines and South Korea, where it was launched in May.

JUUL is not available in Australia where nicotine – the addictive ingredient in tobacco – is classed as a schedule 7 dangerous poison. The retail sale of nicotine is an offence in all states and territories.

The company says its mission is to improve the lives of the world’s 1.1 billion adult smokers by offering them an alternative to cigarettes. Its aim is to be sold in convenience stores and petrol stations alongside traditional tobacco products.

Tobacco giant Altria – which owns brands including Marlboro – bought a 35 per cent stake in JUUL for $US12.8 billion in December 2018.

JUUL made a slim $US12.4 million profit on revenues of $US1 billion in 2018 and has forecast revenues of $US$3.4 billion ($4.9 billion) in 2019, according to Bloomberg.

The firm has 2200 employees worldwide. It established an office in Singapore last year and employs 100 people in the Asia Pacific region.

The World Health Organisation estimates tobacco kills more than 8 million people each year. It says 80 per cent of global tobacco sales are to people in low and middle income countries.

Attracting controversy

Popularity of the cult vaping device has exploded since it was developed by two former Stanford University students in 2015. The company remains headquartered in San Francisco.

JUUL has attracted controversy in its home market of the United States where it has been accused of luring underage consumers, including non-smokers, to use its products.

The company responded by shutting down its social media presence and limiting the sales of some flavours it offers including mango, cucumber and crème brulee.

Australians who want to quit smoking with the aid of a nicotine replacement are limited to buying nicotine replacement therapies over the counter from a chemist.

These products are regulated by the Therapeutic Goods Administration, which is overseen by the Department of Health.

Health warnings

In January the TGA issued a warning to consumers about the health risks posed by e-cigarette liquid saying no e-cigarette had been approved in Australia as a method for stopping smoking.

“Since the TGA does not regulate these products, their quality and safety is not known,” the TGA said.

The TGA quoted a study of 10 e-cigarette liquid varieties published in the Medical Journal of Australia that found traces of a substance used in insecticides, herbicides and disinfectant.

It found some products promoted as nicotine free contained nicotine and also found evidence in others of 2‐amino‐octanoic acid, which is found in blood, urine and faeces of mammals.