WASHINGTON, Oct 31 — US tobacco merchant Altria said today it was writing down its stake in e-cigarette start-up Juul Labs by a third, or US$4.5 billion (RM18.8 billion), as that company contends with a regulatory backlash.
Altria booked the charge in its third-quarter results.
The company said no one “determinative event or factor” prompted the change. Juul instead faces a host of problems, including mounting chances US regulators could provisionally block the sale of all flavoured e-vapour products.
Altria in late 2018 took US$13 billion stake in the San Francisco-based Juul.
The slender electronic devices proved popular, particularly with teenagers, and offered alluring candy flavours.
With dozens dead and hundreds sickened from causes potentially tied to some vaping products, the regulatory landscape for e-cigarettes has sharply deteriorated this year.
State and federal authorities have brought litigation and reportedly at least one criminal investigation.
The company announced this month it had suspended sales of un-mentholated flavoured Juul pods in the United States.
However, in nearly 80 per cent of cases, those sickened had used pods containing THC, the psychoactive ingredient in cannabis, which were not manufactured by the company. — AFP