Traditional cigarette sales remain on a steady decline, though how deep of a descent appears up for debate.

According to the latest four-week data from Nielsen that ended June 15, cigarette industry volume fell 10.7%.

Wells Fargo Securities analyst Bonnie Herzog said Tuesday that the decline “suggests more pressure on industry cigarette volumes than what manufacturers and our retailer and wholesale contacts are seeing.”

Herzog said British American Tobacco Plc — parent company of Reynolds American Inc. — and Imperial Brands Plc — parent company of ITG Brands — “have forcefully disputed Nielsen’s data, which Nielsen addressed in a June 10 statement in which it acknowledged flaws in its methodology.

Herzog said she believes the 10.7% volume decline to be “seriously flawed,” though the volume decline could be as much as 6% this year.

BAT and Altria Group Inc., parent company of Philip Morris USA, has said the decline could be between 4% and 5%, while Imperial has said between 4.5% and 5%.

“Our contacts certainly agree there is more pressure on volumes,” Herzog said.

The decline is partially caused by a recent 11-cent per pack price increase and by electronic cigarettes being increasingly adopted as a viable nicotine alternative.

Part of the decline also can be attributed to wholesalers and retailers stocking up on inventory ahead of the pack price increase in February. Those groups typically pass along list price increases to consumers.

Meanwhile, e-cig industry volume was up 51.4% year over year even after Juul Labs Inc. removed in November its creme, cucumber, fruit and mango flavors from convenience stores to address Food and Drug Administration regulatory concerns.

“There is on-going debate about how accurate these numbers are, given the rapid (and possibly increasing) rate of decline in cigarette sales,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette and health studies.

“There is a reluctance to accept that Nielsen data showing sales falling by around 10% could be correct, even when the rapid rise in the sale of vaping and other non-combustible alternatives lends credence to the idea that cigarette sales are, in the historic sense of the term, being decimated.”

Sweanor said the Nielsen data may be more accurate than the manufacturers want to acknowledge, based on U.S. Treasury data for the first quarter of 2019 showing “a decline in the cigarette market of 9.35% compared to the same period last year.”

In traditional cigarettes, Philip Morris held steady in first place at 54.1% market share, of which 47.3% is the top-selling Marlboro.

Reynolds held steady at 33.6%, led by 13.1% from Newport, 8.7% Camel, 6.4% Pall Mall and 3.5% Natural American Spirit.

ITG was at 7.1%, including 2.1% from Winston and 1.6% each from Kool and Maverick. ITG has said its market share is closer to 10%.

Juul holds a 74.4% market share, compared with 12.6% from No. 2 Vuse of R.J. Reynolds Vapor Co. Similar flavored e-cigs have not been pulled from retail by Reynolds Vapor.

Herzog has projected $9 billion in e-cig sales this year, up from $7 billion in 2018.

Herzog cautioned, however, that e-cigs are just the third largest tobacco product with 5% of retail sales, compared with 82% for traditional cigarettes and 8% for chewing and smokeless tobacco.

Njoy was third at 6.2%, followed by Imperial Brands Plc’s Blu e-cig at 3.5% and Japan Tobacco’s Logic at 2.1%.

Those products likely gained sales from Altria Group Inc. choosing to stop production of e-cigs MarkTen XL and Green Smoke as part of its $12.8 billion investment in December for a 35% ownership stake in Juul.

Juul entered the mainstream retail marketplace in 2015 and is sold in the form of a pen or a USB device.

That design makes it easy to hide, which former FDA Commissioner Dr. Scott Gottlieb said has contributed to “an epidemic” of teenage use, albeit based on a small sample size nationally.

Gottlieb recommended Nov. 15 banning or tightening regulations on the sale and marketing of traditional menthol cigarettes, as well as limiting e-cigs to traditional tobacco, mint and menthol.

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