British American Tobacco (BAT) sought to acquire leading disposable vape brand ElfBar late last year, according to a senior source close to the matter.
After months of emails and meetings, ElfBar ultimately turned down the tobacco giant’s offer.
According to the source, a supply chain manager from BAT first contacted ElfBar in August last year, telling the vape brand BAT had discussed a potential acquisition internally. In late September, a video conference was held during which ElfBar’s leadership team were asked by BAT whether they would sell the brand to BAT. In early December a BAT executive, who said they were speaking on behalf of the company’s board members, sought clarification from ElfBar that it would be willing to sell a majority of its brand shares.
Later that month, ElfBar communicated to BAT it had no intention to sell any stake.
An ElfBar spokesman confirmed to The Grocer it was approached by BAT to acquire the brand. A BAT spokesman declined to comment.
Earlier this month, BAT supplied local Trading Standards teams with laboratory tests of 71 batches of ElfBar 600 and sister brand Lost Mary SKUs, which the company said “demonstrated consistent and widespread overfilling”.
“These results cast significant doubts on the reliability of ElfBar’s recent statements that this issue relates only to ‘some’ batches of its ElfBar 600 products,” wrote BAT’s UKI head of external affairs Sam Millicheap in a letter seen by The Grocer.
The letter followed a Daily Mail report last month claiming ElfBar devices containing 50% more than the legal limit of liquid nicotine were being sold in major supermarkets. ElfBar claimed oversized tanks had been “inadvertently fitted” to UK-bound product, and commenced a voluntary withdrawal of the product.
Last week, BAT alerted wholesalers and retailers to further test results of ElfBar 600 and Lost Mary products – as well as numerous disposable brands including SKE Crystal, Smok Mbar, IVG, Found Mary, Klik Klak, Solo and Solo+ – bought at retailers including Asda, Morrisons, Sainsbury’s, Nisa Local, Booker and One Stop.
In the latest letter, seen by The Grocer, the company’s UK MD Fredrik Svensson urged recipients to take “appropriate steps to ensure you are not supplying non-compliant products”.
“You will of course be fully alive to the risks of corporate and personal liability arising from the sale of non-compliant products,” he added.
BAT’s presence in the vaping category has chiefly been won through acquisitions. Its first vaping product Vype, which launched in 2013, was developed by British startup CN Creative, which BAT acquired in 2012.
The tobacco firm acquired RJ Reynolds Vapour Company – owner of Vuse vapes – as part of its purchase of Reynolds American Incorporated (RAI) in 2017. Vype products rebranded to Vuse in 2021.
In 2015, BAT bought Polish e-cigarette business Chic, and a year later acquired Ten Motives. In 2017 it acquired UK vape company VIP and announced its intention to buy South African vape company Twisp – a sale initially blocked by the nation’s competition commission but later permitted.
Its vaping products until last year were chiefly refillable pod devices. However, in May last year it launched disposable product Vuse Go in the UK, in what it called BAT’s “fastest speed to market launch yet”.
In its half year results in July, BAT CEO Jack Bowles said Vuse Go was “fast approaching number two in the UK disposables category just three months after launch”.
Overall vaping sales more than doubled in the year to September 2022, according to NIQ, rising by 120.9% to £793m.
ElfBar is the category leader by a long margin, now accounting for two-fifths of vaping’s value with £322m in sales. Vuse also grew in value last year, by 458% versus ElfBar’s 8,527%.
Additional reporting by Jimmy Nicholls
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