Big Tobacco to Benefit from FDA Crackdown on E-Cigarettes

A Food and Drug Administration crackdown on e-cigarettes could be a boost for big tobacco.  The FDA on Wednesday ordered five brands — Juul, British American Tobacco’s Vuse, Altria’s MarkTen, Imperial Brands’ Blu E-cigs and Japan Tobacco’s Logic — to submit plans, within 60 days, to discourage teen use of their products. It is considering restricting e-cigarette manufacturers from selling flavored nicotine liquid or making the products undergo an agency review.

“E-cigarette use among youth has hit epidemic proportions,” the FDA said in a press release that also detailed “a large-scale, undercover nationwide blitz to crack down on the sale of e-cigarettes to minors at both brick-and-mortar and online retailers.”

The coming crackdown could spell trouble for companies such as Juul. Their products, available in sweet flavors, are popular with young people, who can hide the sleek devices from parents and teachers.

Big tobacco, on the other hand, could benefit in a couple of ways.

There is no industry-wide data to show how many customers vaping companies steal from tobacco, but a survey of 19,000 Juul users, conducted by the company and detailed in a Piper Jaffray note, said that about 62%  were smokers when starting to use Juul. About two-thirds of them quit after beginning to use Juul.

“The cigarette companies make all their money in cigarettes — that’s the high-margin business where they have scale. And they all have smaller vape or e-cigarette businesses, but they are still in investment mode. They make little or no money there and, in some cases, lose money,” Piper Jaffray’s Michael Lavery said.

  1. Brent Bell 4 years ago

    Stop doing big tobaccos bidding and going after the ecig industry. Using the guise of kids to attack an industry like you’re the gestapo is disgusting. @realDonaldTrump should really gut your pay to play useless agency. You’re not the ATF.

  2. Jacob Sullum 4 years ago

    Can u prove there are ZERO cancer causing agents in a juul or ecig? Nicotine is a gateway drug and is highly addictive.

Leave a Comment