WASHINGTON -- Two comments underscore the tension permeating the tobacco world after the U.S. Food & Drug Administration (FDA) released its long-awaited proposed deeming regulations that would give it jurisdiction of other tobacco products (OTP) such as electronic cigarettes, cigars and pipe tobacco.
With little doubt, most of the commentary and media interest surrounded the burgeoning e-cig/e-vaping sector.
"It appears that the FDA is taking a science-based approach, and that the proposed rule itself defines a constructive process that recognizes that e-cigarettes are different than combustible cigarettes."
This favorable comment from Murray Kessler, head of the country's third-largest maker of combustible cigarettes, Lorillard, and No. 1 e-cig, blu, reflects the positive vibes shared among most major cigarette and e-cig players.
Then there's the pro-vaping advocates, the Smoke Free Alternatives Trade Association (SFATA). While the group backs FDA's efforts to ban underage sales of all tobacco products and to require ingredient listings and appropriate product labeling, SFATA argues that noncombustible products must be treated differently.
"The proposed regulations make clear the agency's intent to regulate all products in the same way, including vaporization and e-cigarette products that contain nicotine," the group's statement said. "While there is a need for appropriate and proportionate regulation of vaporizers and e-cigarettes, these products represent a new and unique category. They are technology products, not tobacco products. Trying to squeeze an innovative vapor product into a regulatory structure that was designed for traditional combustible and oral tobacco products is simply not appropriate."
Not Five Years Ago
Nearly five years after Congress granted the FDA regulatory authority over tobacco products, the agency released plans on Thursday to assume oversight of cigars, pipe tobacco and the rapidly burgeoning universe of electronic nicotine devices headlined by e-cigs; however, unlike the Family Smoking Prevention & Tobacco Control Act of 2009, FDA's newest initiative, the proposed deeming regulations, did not elicit the near-universal outcry across the tobacco landscape.
While Altria stood virtually alone five years ago in its support of FDA, the majority of major tobacco brands on Thursday extended cautious support of the agency's bid to provide a regulatory framework around the unwieldy e-cig world that government officials publicly described as the "wild, wild West."
Much of the mainstream opposition to both online and brick-and-mortar retail sales to minors and requirements for labeling and listing of ingredients is anchored in the need for the nascent e-cig segment to establish credibility among consumers and merchants--that these e-cig and vaping companies are responsible partners, and that their products are safe and performance is predictable.
"I would consider the deeming regulations extremely favorable for the END (electronic nicotine devices) industry as a whole," said Greg Doyle, COO of Metro e-cig maker Nicotek. "The industry is receiving immeasurable credibility and exposure from a consumer standpoint."
Two leading e-cig companies likewise praised the FDA for not overreaching.
"By resisting calls to regulate ahead of--and indeed in opposition to--the science and data, today the FDA has brought NJOY a giant step closer to achieving its corporate mission of obsoleting cigarettes," said NJOY president and CEO Craig Weiss. "There are encouraging signs that 10 years from now, this date will be remembered as the beginning of the end of the tobacco epidemic."
Tony Gaines, chief customer office at Logic, describes the FDA's proposal as "much lighter than expected."
He added, "We at Logic already have this in place so business as usual for a leading brand."
FDA Missteps
While the agency's proposal seems to give e-cigs greater latitude than its combustible counterparts, some e-cigs were in a huff over the news.
"All in all, the deeming regulations are a disaster," blogged Dr. Michael Siegel, a professor at Boston University's School of Health who previously worked at the Office on Smoking & Health at the Centers for Disease Control & Prevention (CDC).
Although he credited FDA for holding off on an e-cig assault by permitting flavors and advertising, Siegel lambasted the call mandating pre-approval (or substantial equivalence [SE] determination) for all new e-cig products.
"At the end of the day, while there are some positive aspects to these regulations, it is clear that science is not playing much of a role in the process," Siegel said. "That does not bode well for the potential of electronic cigarettes to seriously challenge the combustible tobacco market, and thus to save hundreds of thousands of lives."
Ron Tully, spokesperson at National Tobacco Co., which last year entered into a long-term distribution agreement with the V2 e-cig brand, raised another worry.
Although he too supported FDA's efforts to limit youth access of other tobacco products, Tully cited concerns that FDA's proposed measures would hurt smaller manufacturers and product innovation.
"We have concerns with the direction of some elements proposed regulations and their impact on small companies. We sincerely hope that the agency will carefully review the comments of industry stakeholders, and that FDA ultimately recognizes the need for an alternative regulatory regime for many of the transformative and progressively innovative products that came, and will continue to come to the market, post Feb. 15, 2007."
Jeff Stier, risk analysis director at the National Center for Public Policy Research, placed emphasis on the FDA's comments that its proposed regulations are "foundational."
"The devil will be in the details of future regulatory decisions," said Stier. "If the regulations are too heavy-handed, they'll have the deadly effect of preventing smokers from quitting by switching to these dramatically less harmful alternatives."
And like National Tobacco, he feared the deeming regulations would favor the deeper-pocketed manufacturers: "The expensive and burdensome requirements will heavily favor big companies at the expense of smaller innovative ones, thus slowing product improvements that would make e-cigarettes a more appealing alternative to even the most addicted smokers."
But an important silver lining, he noted, was the effect FDA's actions could have on local and state governments looking to impose harsher limits on e-cigs.
"Some city and state legislatures have been using the lack of federal regulations as an excuse to institute their own draconian regulations, from public use bans to outright bans on flavored e-liquid. It will be harder to justify those bans now that the FDA is asserting federal oversight," Stier said.
Necessary Barriers?
What some like Tully and Stier see as potentially stifling barriers, others see as more mixed for both the good and potentially the bad.
The proposed strictures "increase the barriers to entry for existing manufacturers, which is positive," said Wells Fargo tobacco analyst Bonnie Herzog. "However, our main concern remains around e-cig/e-vapor innovation which, if stifled, could dramatically slow down industry growth and conversion from combustible cigs, which would ultimately result in net negative public health impact. Clearly, this would be in direct opposition of the agency's goal."
Nik Modi, tobacco analyst at RBC Capital Markets, said he sees the proposed rules as a win for tobacco's Big Three--Altria, Reynolds and Lorillard, "particularly Lorillard, as the FDA did not mention rules on flavors and advertising."
Modi also pointed to something not raised by the FDA: "We find it interesting this statement does not mention 'vapor products' [open systems, e-liquids, tanks, mods] as we have pointed out … this is currently the fastest-growing category within tobacco."
Chuck Conner, former president of the American Lung Association and currently senior advisor at The Electronic Cigarette Industry Group (ECIG), credited FDA's action as laying a foundation for a broader nicotine policy.
"The cardinal rule moving forward," he said, "should be to recognize the distinctions between combustible cigarettes and electronic cigarettes."
How Will Regulation Change the Course of OTP Retailing?
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Mitch Morrison .
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