E-cig­a­rettes to face new sales lim­its from FDA

FDA look­ing to re­strict sales of pop­u­lar fruit flavours amid youth va­p­ing ‘epi­demic’

Waterloo Region Record - - Business - DREW ARM­STRONG, ANNA ED­NEY AND OLIVIA ZALESKI

E-cig­a­rettes will face strict new lim­its im­posed by the U.S. Food and Drug Ad­min­is­tra­tion, ac­cord­ing to a se­nior FDA of­fi­cial, restrict­ing sales of many pop­u­lar fruit flavours amid what the agency has called an epi­demic of youth use.

Sales of pop­u­lar e-cig­a­rette fruit flavours will be lim­ited to adult-only es­tab­lish­ments, such as va­p­ing stores. The re­stric­tions will ap­ply only to car­tridgestyle de­vices, such as a pop­u­lar prod­uct from startup Juul Labs Inc., ac­cord­ing to the of­fi­cial.

On­line sales will be al­lowed but only by re­tail­ers who take steps to ver­ify the buyer’s age, just as al­co­hol can be sold on the web as long as there’s some­one 21 or older to sign for the pack­age, said the of­fi­cial. The reg­u­la­tions, set to be an­nounced next week, will take ef­fect in the com­ing months.

Spokes­peo­ple for the FDA and Juul de­clined to com­ment. Plans for the new reg­u­la­tions were re­ported Thurs­day by the Wash­ing­ton Post.

British Amer­i­can To­bacco Plc shares jumped as much as 2.3 per cent in early Lon­don trad­ing on Fri­day, while Im­pe­rial Brands Plc climbed as much as 2.5 per cent. An­a­lysts said the FDA’s plans are pos­i­tive for big to­bacco com­pa­nies be­cause it will be more dif­fi­cult for con­sumers to buy Juul’s pods.

“Any ac­tion that slows down the growth tra­jec­tory of Juul will be a pos­i­tive for to­bacco sen­ti­ment,” Jef­feries In­ter­na­tional Ltd. an­a­lyst Owen Ben­nett wrote. He added that it will have a lim­ited im­pact on the ma­jor to­bacco com­pa­nies, as the vape mar­ket is a “tiny part” of their sales.

‘An Epi­demic’

The FDA has talked for months about ways to re­duce youth use, cit­ing ris­ing con­cern that e-cig­a­rettes are cre­at­ing a new class of nico­tine users, rather than pri­mar­ily help­ing peo­ple tran­si­tion off reg­u­lar cig­a­rettes. The FDA has called youth use of the de­vices “an epi­demic” and said it would con­sider sig­nif­i­cant ac­tion to stop it. Va­p­ing surged 77 per cent among high school-age chil­dren and about 50 per cent among mid­dle-school­ers in 2018, ac­cord­ing to gov­ern­ment data.

As al­ter­na­tives surge, the U.S. adult smok­ing rate plunged to 14 per cent in 2017, the low­est mea­sure on record and down 67 per cent from 1965, ac­cord­ing to the Cen­ters for Dis­ease Con­trol and Pre­ven­tion. About 10 per cent of adults 18 to 24 years old lit up in 2017, down from 13 per cent the year ear­lier.

Juul’s de­vice has be­come wildly pop­u­lar, ac­count­ing for al­most one in three e-cig­a­rette sales as of the end of 2017, ac­cord­ing to the U.S. Cen­ters for Dis­ease Con­trol and Pre­ven­tion. The com­pany is backed by high-pro­file in­vestors, in­clud­ing Tiger Global Man­age­ment and Tao Cap­i­tal Part­ners. Fundrais­ing ne­go­ti­a­tions this year pegged a $15 bil­lion val­u­a­tion on the busi­ness.

To­bacco ac­tivists said the FDA should im­pose even greater re­stric­tions, in­clud­ing ban­ning on­line sales. “It’s not enough,” said Mered­ith Berk­man, co­founder of Par­ents Against Va­p­ing ECi­garettes. “There has to be a com­plete ban on flavours ev­ery­where.”

Over­seas Bans

The long-ex­pected move by the U.S. comes amid sim­i­lar con­cerns over­seas. At least 27 re­gions in­clud­ing Sin­ga­pore and Hong Kong have banned the al­ter­na­tive de­vices, heed­ing ad­vice from the World Health Or­ga­ni­za­tion. Oth­ers such as the U.K. and New Zealand have taken a more ac­com­mo­dat­ing stance.

An­dre Calant­zopou­los, chief ex­ec­u­tive of­fi­cer of Philip Mor­ris In­ter­na­tional Inc., said last month he ex­pected reg­u­la­tors across the globe to be­come more open to cig­a­rette al­ter­na­tives and re­verse their bans. Yet he said the pos­si­bil­ity of FDA over­sight of e-cig­a­rettes was a fair move, as the agency lacked the au­thor­ity to reg­u­late those de­vices be­fore they went on sale.

“It’s ac­tu­ally a pos­i­tive thing that the FDA is act­ing,” Calant­zopou­los said in Oc­to­ber.

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