The shareholders of Altria grilled Howard Willard, the CEO for his bet worth $12.8 billion on the e-cigarette giant JUUL during the annual meeting of shareholders on Thursday. Investors and analysts were worried that Altria was paying much for 35% stake in Altria and had little say in its operations particularly when the e-cigarette player is going through regulatory scrutiny.
On Thursday Willard said the market of e-cigarette was not growing even before JUUL came into it. Altria’s MarkTen products were hardly gaining any traction, which had prompted Altria to not sell them before finalizing a deal with JUUL. He said that he was pleased that he came across the opportunity of investment and that he believes this would pay dividends. JUUL faced regulatory and public scrutiny from its critics who said that the company has powered the epidemic of teen vaping.
Many lawsuits have accused JUUL of doing this to the teens intentionally. The administration of food and drug is investigating JUUL’s marketing trends and the company has been sued by the attorney general of North Carolina. Josh Stein, the attorney general of North Carolina said that JUUL has targeted the youngsters as customers due to which vaping is becoming an epidemic. He added that the business practices of JUUL are illegal and they he plans to put an end to them. He said that he cannot allow youngsters to be addicted to cigarettes.
Willard said that Altria knew about the litigation when he was investing in JUUL. He added that Altria is committed towards reducing the use of e-cigarettes in youth including its support of increasing the minimum age for buying tobacco to 21. On Wednesday, a judge ruled that the administration of food and drug should begin reviewing the e-cigarettes applications. Scott Gottlieb, the former FDA Commissioner had moved the deadline in 2017 to 2020, although FDA said that it would move it to 2012.