(Reuters) Philip Morris International Inc (PM.N) plans next year to enter the electronic cigarette business, a $2 billion ( 1.24 billion) plus global market identified by the maker of Marlboro cigarettes as its “greatest growth opportunity”.

Speaking to investors in New York, Philip Morris Chief Executive Andre Calantzopoulos said the company would enter the e cigarette business in the second half of 2014 to tap fast growing demand for a less harmful alternative to cigarettes.

The world’s largest listed tobacco company will launch a new range of products, called “Reduced Risk”, Calantzopoulos said at a conference. The company, which sells to countries outside the United States, will also spend more on research and development.

“2014 will be a key investment year behind our Reduced Risk products, our greatest growth opportunity in the years to come,” he said.

Market consultant Euromonitor estimates the world market for electronic cigarettes was more than $2 billion last year, with the United States accounting for a quarter of that.

The market is growing at breakneck speed. Some analysts predict e smokes could outsell conventional cigarettes within a decade, particularly as Big Tobacco grapples with declining sales due to government regulation and health aware consumers.

Yet e cigarettes battery powered metal tubes that turn nicotine laced liquid into vapour are far from universally accepted as a public health tool.

Regulators are agonizing over whether to restrict them as “gateway” products to nicotine addiction and tobacco smoking, or embrace them as treatments for would be quitters.

A big issue is the lack of long term scientific evidence to support the safety and effectiveness of e cigarettes, prompting critics like the British Medical Association (BMA) to warn of the dangers of their unregulated use.

CELEBRITY E SMOKERS

Celebrity endorsements from Courtney Love, Leonardo DiCaprio and others have provided further inducement to the makers of iconic cigarette brands to invest.

Imperial Tobacco Group (IMT.L), the world’s No. 4 international tobacco company, has announced plans to launch two electronic cigarettes in fiscal 2014.

Lorillard (LO.N), known for its Newport and Kent cigarette brands, paid $135 million to acquire Blu Ecigs in 2012 and last month acquired Britain based e cigarette maker SKYCIG.

Other leading tobacco companies, including British American Tobacco (BATS.L) and Camel cigarette maker Reynolds American (RAI.N), are also placing their bets on e smokes.

Philip Morris said on Wednesday it estimated the retail sales value of the eight largest e cigarette markets worldwide at around $2.5 billion, with nearly half outside the United States and China.

Philip Morris also raised its full year earnings forecast to $5.37 $5.42 per share from $5.35 $5.40, citing a reduced impact from unfavourable exchange rates.

Analysts on average were expecting Philip Morris to earn $5.39 per share, according to Thomson Reuters I/B/E/S.

The company’s shares were down 2.5 percent at $89.18 on Wednesday afternoon on the New York Stock Exchange.

(Writing by Robin Paxton Editing by Kirti Pandey and Saumyadeb Chakrabarty)

Men indicted for 2.3m packs of fake marlboros – abc news

: buy djarum cigarettes online – yam????

By Susanna Kim
skimm
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Apr 12, 2013 1 48pm

(Image credit Daniel Acker/Bloomberg/Getty Images)

Three men were indicted this week for shipping millions of packs of untaxed contraband Marlboro cigarettes that were part of a sting conducted by the FBI.

Jia Yongming, Yazhou Wu, and Ricky Le were indicted by the U.S. Attorney’s Office on Monday in a U.S. District Court in New Jersey. They are charged with conspiracy to transport contraband cigarettes and trafficking in goods bearing counterfeit marks.

Thomas Dunn, an attorney for Yongmin, had no comment. An attorney for Wu and Le could not be reached for comment.

Read more How to Spot Fake Luxury Goods

Last July, the U.S. Attorney’s Office arrested the three California residents in Los Angeles and charged them with conspiring to ship and distribute more than 4,600 cases of Marlboro and Marlboro Light cigarettes.

Like many other states, California requires a stamp to be placed on packs of cigarettes to show the state tax has been paid. California had a $0.87 tax on each pack of cigarettes while the illegal operation had been underway for over a year.

The cigarettes were shipped from China to ports in Newark, N.J., and New York City. From warehouses, they were headed for their final destination, California, where they were delivered by undercover FBI agents, as reported by the Philadelphia Inquirer. The agents were paid about $225,000 in commissions for delivering five loads of cigarettes.

The U.S. Attorney’s Office said the state of California lost more than $2 million in taxes from this conspiracy.

David Sutton, a spokesman for Altria, which owns the Marlboro brand, said this had the “classic elements” of a counterfeiting cigarette case.

“In this case, it shows you that this kind of activity is invariably driven by higher and higher excise taxes,” Sutton said.

This case began two months after the last Federal excise tax increase on cigarettes to 62 cents per pack in April 2009.

In the president’s budget this week, there is a proposal to raise the Federal tax again by 94 cents to $1.95 a pack. If passed, Sutton said it “will definitely create a significant incentive for additional counterfeit cigarette smuggling.”

Sutton said Altria supported this investigation.

“The counterfeit product almost always comes from China,” Sutton said. “You see it in L.A., south Florida, the port of Newark because of the New York City market. The criminals are sophisticated in counterfeit cigarette trafficking.”

Sutton said counterfeiters rely on organized crime units to distribute the products.

“You see counterfeit trafficking in dense urban centers, like New York and Chicago, because you have established criminal organizations in place for distribution of the product,” he said.

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