The company announced Wednesday that CEO Kevin Burns will be replaced by KC Crosthwaite, who currently serves as senior vice president for chief strategy and growth at tobacco giant Altria, according to the Washington Post.
Crosthwaite oversaw “commercial and regulatory efforts” related to the launch in the United States of IQOS, a “heat-not-burn” alternative to cigarettes, Juul said in a news release, according to CNBC. IQOS is made by Philip Morris International and marketed in the United States by Altria.
Juul is shutting down broadcast, print and digital advertising and ending lobbying efforts on behalf of the e-cigarette in Washington as safety concerns intensify. September 25, 2019
The press release went on to say that Crosthwaite will “continue a broad review of the company’s practices and policies to ensure alignment with its aim of responsible leadership within the industry.” The company also said it was suspending all digital-product advertising in the United States and will not lobby the Trump administration on its proposed ban of all flavored e-cigarettes.
“I have long believed in a future where adult smokers overwhelmingly choose alternative products like Juul,” said Crosthwaite. “Unfortunately, today that future is at risk due to unacceptable levels of youth usage and eroding public confidence in our industry. Against that backdrop, we must strive to work with regulators, policymakers and other stakeholders, and earn the trust of the societies in which we operate.”
Altria took a big chance on Juul last year, investing $12.8 billion for a 35 percent stake in the company. So far this year, Altria shares are down almost 18 percent.
One other outcome related to the shakeup at Juul is the unraveling of talks that could have reunited tobacco giants Altria and Philip Morris. The two companies had been considering a merger potentially worth more than $200 billion. The two companies split in 2007 but announced in August that they might combine to focus on e-cigarettes.
