Retailers Give E-OK on FDA's E-Cig Proposal

See agency's recommendations as balanced, reasonable

Mitch Morrison, Vice President of Retailer Relations

Mary Szarmach Smoker Friendly (CSP Daily News / Convenience Store)

Mary Szarmach

OAKBROOK TERRACE, Ill. -- It could have been worse. Much worse.

That was the prevailing sentiment circulating among tobacco retailers in response to the proposed deeming regulations released Thursday by the U.S. Food & Drug Administration (FDA) for electronic cigarettes and other tobacco products (OTP).Mitch

"Overall, I do not feel the FDA overreached. In fact, I expected a lot worse, especially regarding the flavors," Steve Monaco, category manager director at Tedeschi Food Shops, told CSP Daily News. "The blocking sales to minors was a given. We already had that provision in place."

Monaco was referring to the FDA's proposal at this time not to ban flavors within the electronic nicotine segment. Also, the agency opted for the time being to permit online sales of e-products to adults only--a move that displeased Monaco.

"I do wish the Internet sales were addressed because we are definitely losing sales, and the state is losing tax revenue. But, I now understand this does not fall under the FDA's authority," he said.

An operator of about 190 stores, the Rockland, Mass.-based convenience chain embarked on e-cigarettes about a year ago and currently stock the top three selling brands--blu, Logic and NJOY. While Tedeschi is not yet selling vaping products, the company sees great growth potential in the rapidly expanding electronic nicotine segment.

"[Our] growth projection for e-cigs in 2014 is about 50%. We are still implementing a merchandising fixture that increases e cig product space in 2014," Monaco said. Asked what effect the FDA's proposal might have on the company's e-cigarette strategies, Monaco replied, "[It] will have no negative impact on our plan-o-gramming or category investment. Still very optimistic on category growth."

At Boulder, Colo.-based Smoker Friendly, the largest tobacco-outlet chain in the country, FDA's proposed regulations, which could take as long as two years to implement as formal policy, were positively received.

"It was a measured response on making sure these other tobacco and nicotine products are not sold to minors," said Mary Szarmach, Smoker Friendly's vice president of trade marketing and government relations. "At this point, I think the FDA has been reasonable and fairly moderate especially in the e-device category."

Szarmach was less positive about a proposal FDA floated that would treat premium cigars much more gently than nonpremium on the premise that minors are not drawn to more expensive stogies.

"The option on premium cigars that included a minimum retail of $10 doesn't make much sense. There was no thought put into the different tax rates at the state level that make up retail pricing; and there are literally thousands of excellent hand-rolled cigars that are below that retail price, and they are used by adult consumers," she said. "We need to work with the FDA on the definition of premium cigars for sure."

Overall, though, Szarmach was pleased with FDA's tone and optimistic that the governmental body's foray into establishing jurisdiction over OTP would not stifle growth in the electronic-delivery sector.

"We have carried e-cigs and vaping devices since 2009," she said. "We have a very large set for both the traditional e-cigs and for the open system vapor products. We think based on the first quarter we will see about a 5% increase in the e-cig category and the vapor/liquid/open systems look to grow upwards of 30% this year."

Mitch Morrison Winsight CSP By Mitch Morrison, Vice President of Retailer Relations
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