Juul will take most fla­vored e-cig­a­rettes off store shelves ahead of a crack­down by the FDA, a source says.


Juul Labs Inc., the maker of a hot-sell­ing va­p­ing de­vice that is in­creas­ingly pop­u­lar with teens, will stop sell­ing most fla­vored e-cig­a­rettes 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 adul­tonly 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% of its in-store re­tail sales, ac­cord­ing to the per­son fa­mil­iar with the com­pany’s plans. To­bacco and men­thol-fla­vored Juuls would 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, the agency of­fi­cial said. The reg­u­la­tions are ex­pected to be an­nounced next week and 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 for 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 reg­u­la­tory ac­tion sep­a­rate from the e-cig­a­rette pro­posal, the se­nior FDA of­fi­cial said.

“I am fairly con­fi­dent there will be a le­gal chal­lenge,” said Lyle Beck­with, se­nior vice pres­i­dent of gov­ern­ment re­la­tions at the Na­tional Assn. of Con­ve­nience Stores. He said he doesn’t know of any data show­ing that vape shops do a bet­ter job of age ver­i­fi­ca­tion than con­ve­nience stores.

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

Shares of Al­tria Group Inc., which has its own e-cig­a­rette brands and makes Marl­boro cig­a­rettes, fell $1.95, or 3%, to $63.42 on Fri­day. Bri­tish Amer­i­can To­bacco shares fell 1.7% in Lon­don. Im­pe­rial Brands shares climbed 2.1%.

“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. He added that it will have a lim­ited ef­fect on the ma­jor to­bacco com­pa­nies, as the vape mar­ket is a “tiny part” of their sales.

But re­stric­tions on men­thol fla­vor in cig­a­rettes that could come later would hurt to­bacco com­pa­nies’ sales.

The FDA has talked for months about ways to re­duce youth use of e-cig­a­rettes, cit­ing ris­ing con­cern that the de­vices 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% among high-school-age chil­dren and about 50% among mid­dle-school­ers in 2018, ac­cord­ing to pre­lim­i­nary gov­ern­ment data.

As al­ter­na­tives surge, the share of U.S. adults who smoke sank to 14% in 2017, which was the low­est mea­sure on record and down from 42% in 1965, ac­cord­ing to the Cen­ters for Dis­ease Con­trol and Pre­ven­tion. About 10% of adults ages 18 to 24 lit up in 2017, down from 13% in 2016.

Juul’s de­vice ac­counts for al­most 1 in 3 e-cig­a­rette sales as of the end of 2017, ac­cord­ing to the CDC. The San Fran­cisco start-up 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, mak­ing its founders worth more than $800 mil­lion each.

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 E-Cig­a­rettes. “There has to be a com­plete ban on fla­vors ev­ery­where.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.