Juul cuts retail sales
Juul Labs Inc., the maker of a hot-selling vaping device that is increasingly popular with teens, will stop selling most flavored ecigarettes in retail stores, according to a person familiar with the matter.
The decision follows word that U.S. health officials are preparing to step up efforts to curtail underage use of e-cigarettes. On Thursday, a senior official at the Food and Drug Administration said the agency plans to restrict sales of many fruit- and dessert-flavored nicotine pods to adult-only stores.
The new curbs will apply only to cartridge-style devices, such as Juul, according to the FDA official. The Juul device has become popular with young people in part because its small size and resemblance to a USB drive make it easy to conceal.
Juul’s move is expected to affect 45 percent of its instore retail sales, according to the person familiar with the company’s plans. Tobacco and menthol-flavored Juuls will still be available in stores.
Under the FDA’s planned restrictions, online sales will be allowed, but only by retailers who 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 agency official. The regulations, which are expected to be announced next week, will take effect in the coming months.
E-cigarettes have created a paradox for the FDA and the companies that make them: They need to be attractive enough to lure traditional smokers to switch, but not so enticing that they create an entirely new class of nicotine users.
Action on e-cigarettes would parallel moves the FDA has already made to ban dessert flavors in traditional cigarettes. The agency has also been examining restricting menthol flavors in cigarettes. Reducing or eliminating menthol flavor in traditional cigarettes would be a separate regulatory action from the e-cigarette proposal, said the senior FDA official.
“I am fairly confident there will be a legal challenge,” said Lyle Beckwith, senior vice president of government relations at the National Association of Convenience Stores. He said there’s no data he knows of showing that vape shops do a better job of age verification than convenience stores.
Spokesmen for the FDA and Juul declined to comment.
“Any action that slows down the growth trajectory of Juul will be a positive for tobacco sentiment,” Jefferies International Ltd. analyst Owen Bennett wrote in a note.
Juul will cut retail sales of most of its flavored e-cigarettes.