NATO Show 2015: From Acquisitions to Zeller

NEW YORK -- One week from today, the 2015 NATO Show will be well under way, offering attendees a glimpse at the latest tobacco products on the show floor and insightful educational sessions on everything from regulatory affairs to new-product trends. 

 

It’s never a dull affair: news of Lorillard Tobacco Inc.’s acquisition of blu eCigs and Mitch Zeller’s appointment as the new head of the U.S. Food and Drug Administration's (FDA) Center for Tobacco Products (CTP) broke just before the 2012 and 2013 shows, respectively, and the landmark announcement of the FDA’s proposed deeming regulations come just after the 2014 conference wrapped up. And although predicting what the big story of the 2015 NATO Show could be an exercise in futility, there are plenty of hot topics CSP will be keeping an eye on next week in Las Vegas.

 

Since the NATO Show tends to coincide with big news for the tobacco industry, 2015 might bring not one, but two massive announcements. First, the industry is currently waiting to see whether or not the U.S. Federal Trade Commission (FTC) will approve or block the acquisition of Lorillard by Reynolds American Inc. Darren Tucker, a former advisor to the FTC commissioner, told RBC Capital Markets that announcement could come in a matter of days.  

 

The merger of the No. 2 and No. 3 tobacco companies is certainly newsworthy: but the public has also been patiently waiting for the FDA to issue an update to last April’s proposed deeming regulations. Some fear stricter regulations on flavors or open systems will be included, others hope a more realistic new-product pathway than the cumbersome and costly pre-market tobacco applications (PMTA) will be added. With the comment period last August, the time has come for the FDA to respond: will that response coincide with the conference?

 

Though Reynolds and Lorillard are at the center of the potential deal, Imperial Tobacco Group PLC also stands to play a big role: the British company is set to become the third-largest player in the U.S. market by acquiring blu eCigs, Winston and a number of brand divestitures and other assets from Reynolds and Lorillard. Because the deal has not been finalized, Imperial (and its U.S. subsidiary Commonwealth-Altadis) won’t be including those brands in its NATO Show booth—but we’re excited all the same to see what the soon-to-be Big Tobacco player has in store.

 

Mitch Zeller last appeared at the NATO Show very shortly after taking over the CTP in 2013. While there were plenty of “no comments” during that general session, Zeller did provide a glimpse into his top priorities: menthol, deeming and substantial equivalence (SE). Within one year, the FDA requested public comments on menthol, issued its first-ever SE approvals and announced proposed deeming regulations on cigars, electronic cigarettes and other previously un-deemed tobacco products. 

 

Nobody is expecting Zeller to make a blockbuster announcement on deeming during his 2015 appearance, but maybe he’ll shed light on the agency’s priorities moving forward.

 

In the ever-evolving world of e-vapor, today’s hot product is tomorrow’s old news. Events like the NATO Show not only serve as a launching pad for new products, but a glimpse at what trends the future might hold. In 2012, it was cig-alikes; 2013 saw vaporizers and e-liquids; 2014 marked the birth of the heat-not-burn trend. What does 2015 have in store?

 

Some have argued that heat-not-burn vaporizers aren’t just used for loose tobacco, but marijuana. Though most manufacturers are adamant that these products are intended for legal substances only, the definition of “legal substances” is changing. Soon, Colorado and Washington won’t be the only states where consumers can legally purchase recreational marijuana—Time magazine predicts 18 states will have legalized pot by 2020. It will be interesting to see if this year’s NATO Show floor reflects the changing regulatory environment with products aimed not for tobacco smokers, but marijuana smokers in legalized states.