With the non-compete agreement between Altria and Juul now over, Altria is planning to buy another vape maker or create its very own.
👉 Background: Altria is one of the world's largest producers and marketers of tobacco and cigarettes. It owns Malboro cigarettes, Benson & Hedges and a range of cigar brands, amongst many others.
👉 What happened: Back in 2018, Altria invested nearly $13 billion USD in vaping brand Juul in exchange for a 35% stake. As part of this deal, Altria agreed to cut its own vaping business.
👉 What else: Shortly after, Juul was accused of marketing its addictive products to kids. And forced to remove its products from the US. But last week, Altria revealed it had ended its non-compete agreement with Juul, the company it part-owns. And now, Altria will either buy another vape maker or create its own vape product line.
💡A non-compete agreement is all about protecting a company’s sensitive and confidential information. Think: customer insights, marketing plans and pricing strategies.
💡Whenever sensitive info is shared between two parties, like Altria and Juul, there is potential for that info to be exploited to gain a competitive advantage. And since Altria only owned 35% of Juul, it had potential to take this knowledge elsewhere.
💡So now Altria is free from the shackles of Juul, it has a newfound appetite to grow and compete in the vape space itself.
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