Big tobacco companies are voluntarily placing very strong warning labels on their newest products - electronic cigarettes. This comes as a surprise since they are not federally mandated to do so.
Sales of electronic cigarettes are increasing rapidly. Wells Fargo estimated the annual sales of electronic cigarettes, and it said that it will probably reached over a billion U.S. dollars. If the growing sales figures continue to hold, tobacco companies now have a product that can provide more income than the conventional cigarette.
A lot of critics are questioning the motive of tobacco companies placing strong worded labels that discourages people from using their latest and most popular product. It is their belief that the voluntary warning labels are simply another way for tobacco companies to shield themselves from lawsuits.
Tobacco companies have faced lawsuits in the past and have paid damages worth billions of dollars. This is probably the reason why the cigarette makers are putting a lot of effort in placing warning labels on their newest, but very lucrative, electronic product.
Chantico Global founder Gina Sanchez said, "I'm pretty skeptical that the reason behind this is just good-hearted concern for Americans...they do sell probably one of the worst products for human health out there." She adds that the tobacco companies will be raking in huge profits and that the labels are just a way to shield them to any possible repercussions arising from the use of their product.
However, investors in tobacco companies are seeing very sharp rises in the value of its stocks. One of the tobacco companies, Altria saw its share grew by almost 20 percent within the year. That is a very high growth considering that the S&P 500 index only manage to increase less than 7 percent in the same period.
Tobacco companies will continue to profit on their electronic cigarettes regardless of the wordings on the warning labels put on their products. The cigarette makers are probably hoping that the very strong warnings are enough to avoid another possible round of lawsuits.
