Business Juul reduces overseas expansion

Juul reduces overseas expansion

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Juul Labs Inc. told staff this week that it can exit the South Korean market and has postponed its planned launch in New Zealand, as the troubled e-cigarette company reduces its expansion outside the US. UU.

The company pressed aggressively to enter new markets last year, but, in the rush to expand, took false steps that resulted in embarrassing setbacks, according to current and former employees. In China, for example, online retailers removed Juul from their sites just a few days after the company launched there.

The San Francisco startup is blamed for an increase in the vaping of minors in the US. UU. And now it is being investigated by several federal agencies. Its vaporizers and refill capsules are currently for sale in 21 countries, including the US. UU.

Trying to improve relations with national and foreign regulators, the company's new CEO, K.C. Crosthwaite is taking a more methodical approach, said a Juul official. He wants to get clarity on the policy of electronic cigarettes before launching in a country instead of after, said this official.

In anticipation of a US ban. UU. On most flavored electronic cigarette cartridges, the company suspended sales of its sweet and fruity flavors last fall. The company did the same in Canada on Tuesday, stopping the production of its mango, fruit, vanilla and cucumber filling pods.

"We must gain the trust of society by listening and working in cooperation with regulators, public health officials" and others, said a spokesman for Juul. "Therefore, we have been reviewing the best way to restore local operations and making adjustments on a case-by-case basis."

Crosthwaite has reduced distribution in Israel, where, after Juul was launched in 2018, the government imposed new regulations on the potency, packaging and marketing of nicotine from electronic cigarettes, according to a person familiar with the matter. Last year, he also stopped Juul's launch plans in the Netherlands because the regulatory environment there was not clear, this person said.

On Monday, Juul told more than a dozen New Zealand employees that they could be laid off, this person said. In New Zealand, 29% of youth ages 14 and 15 say they have tried to vape at least once, according to a survey funded by the New Zealand government. The high youth vaping rate was a factor in Juul's decision, the person said.

Juul was launched in South Korea last May and has its own retail store in Seoul. The company told employees in the country this week that it is considering reducing operations or closing that business altogether, the person said.

Juul has not been selling as well in South Korea as some of its competitors have done. And the vaping market there is relatively small due to strong restrictions on the nicotine levels that electronic cigarettes can contain. Juul refill capsules in that country have a nicotine concentration of 0.7% compared to 3% or 5% in the US. UU.

"Our performance has not met expectations" in South Korea, Juul spokesman said. "As a result, we have to adjust locally and restore the business … We remain fully committed and optimistic about our long-term future in South Korea."

Write to Jennifer Maloney at [email protected]

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