Key points:
1.Japan Tobacco International (JTI) has acquired a majority stake in the largest independent e-cigarette company in the UK, Flavour Warehouse. JTI currently holds over 50% but less than 75% of Flavour Warehouse's shares.
2.This transaction aims to strengthen JTI's presence in the rapidly growing e-cigarette market as part of its harm reduction product strategy.
3.Flavour Warehouse will retain its current management team, operate independently, and continue to expand in European and global markets.
According to The Grocer's report on May 13th, Japan Tobacco International (JTI) has recently acquired a "significant controlling interest" in the UK's largest independent e-cigarette company, Flavour Warehouse, through equity investment. Documents disclosed by the UK Companies House reveal that JTI currently holds over 50% but less than 75% of Flavour Warehouse's shares.
A spokesperson from JTI told The Grocer that the investment "supports our strategic path of exploring reduced-risk products outside of heated tobacco," and noted that "the core purpose of this transaction is to increase our participation in the rapidly growing e-cigarette segment. Flavour Warehouse has a strong market position, excellent reputation, and high-quality recognition in the industry."
According to reports, Flavour Warehouse will remain independent and maintain its current management team after this transaction.
Flavour Warehouse was established in 2013 and is now one of the largest e-cigarette e-liquid manufacturing companies in Europe, employing approximately 100 employees. The company produces and distributes its own brands, including Vampire Vape, as well as white-label products for many leading brands in the industry.
In recent years, the company has rapidly expanded in the European market by acquiring e-cigarette e-liquid manufacturers Total Vapour and Premier Vaping in 2019 and 2020 respectively. In 2021, the company further expanded its presence by acquiring Trulo GmbH based in Germany and Vapouriz in Guildford, UK.
Flavour Warehouse currently has distribution centers in England, Ireland, and Germany. Through franchising, distributors, and retail networks, its products are now available in over 80 countries worldwide. Additionally, the company operates the e-cigarette e-commerce platform Vapestore.co.uk and several offline stores.
According to annual data from NIQ as of September 7, 2024, overall sales of cigarettes in the UK decreased by 5.9% year-on-year, with a 15.2% drop in sales volume. Specifically, sales of loose tobacco decreased by 7.4%, with a sharp decline of 21.6% in sales volume.
In comparison, the e-cigarette market has shown relatively stable performance. Although overall sales decreased slightly by 0.9% in 2023, it still outperformed traditional tobacco cigarettes. Imperial Tobacco's (IMB) Blu e-cigarette brand, the top-selling brand under a major tobacco company last year, saw a year-on-year increase of approximately 14.9 million units. However, British American Tobacco's (BAT) Vuse series saw a sales decline of over 10%.
The Grocer noted that the market remains dominated by Chinese e-cigarette brands.
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