22nd Century Group Inc (XXII)

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Next-generation products drove BAT merger

http://www.journalnow.com/business/next-generation-products-drove-bat-merger/article_8c933c17-56fc-5f38-85e3-5a5c62e18c99.html

Gottlieb also supported efforts to shift traditional cigarettes to very low nicotine levels.

“The entire tobacco/nicotine market is in a period of unparalleled change, and BAT clearly recognizes that they either help lead that change, or they are following in the footsteps of companies like Kodak, which missed the opportunity to transform as technology did,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several electronic-cigarette studies.

“Philip Morris International has seen a market value gain of roughly $60 billion attributed to its next generation products.”

Sweanor said it “must be a huge motivator for BAT, knowing that Reynolds was always seen as ahead of the rest of the industry in (heat-not-burn) technology and development, to now capitalize on the transformation of the industry to massively less hazardous non-combustion products.”

Stephen Pope, managing principal with industry research firm Starlight Ideas of London, said BAT “has no time to be left on the starting block” with next-generation products.

“It needs to take the opportunity now to close the gap with Philip Morris International, building on its existing distribution strengths, create global scale with (next generation) products and focus on being best in class at every step.”

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“Given how complex it is to introduce a combustible cigarette in the U.S. market, we may put more effort into the next-generation products,” Durante said.