Big Tobacco: planning the vaping future
What’s Big Tobacco up to these days? The two tobacco companies that dominate the US cigarette business are making plans to comply with the new regulatory pathway for vapor after the FDA asserts its authority on August 8 to treat e-cigs as tobacco products.
Both Reynolds American, Inc. (RAI — usually called RJ Reynolds) and Altria Group, owner of Philip Morris USA, are planning their post-deeming strategies for the vaping market. According to Richard Craver’s story last week in the Winston-Salem Journal, “Philip Morris and Reynolds said they have been in talks with FDA officials about how to enter their existing products and planned innovations into the regulatory pipeline.”
“With the deeming regulations as a backdrop, our team has been hard at work on new product formats for the Vuse portfolio that will allow R.J. Reynolds Vapor to be fully prepared for the newly regulated environment,” RAI’s chief executive Susan Cameron told market analysts last week, according to Craver.
Who likes strict regulations? We do!
Altria is on record opposing the deeming regulations’ 2007 predicate date for vapor products, and is engaged in a lawsuit (by its John Middleton Cigar Company subsidiary) challenging the FDA. Reynolds hasn’t stated its opposition publicly, but has supported the Cole-Bishop amendment in the House agriculture appropriations bill that would change the predicate date.
But neither company has exactly fought the FDA tooth and nail. Both have benefitted from the strict regulatory environment “imposed” on the tobacco industry by the 2009 Family Smoking Protection and Tobacco Control Act (TCA). “Imposed” gets quotes because the TCA was actually created partly by Philip Morris (Altria) lawyers, in collaboration with Matt Myers of the Campaign for Tobacco-Free Kids.
Altria now controls 50 percent of the American cigarette business, and Reynolds 34 percent. Since tobacco companies are prevented from advertising or introducing new products, the Big Two have used their financial and distribution power to buy up competitors and dominate the marketplace since the TCA became law.
Encouraging a ban and throwing vapers under the bus
However, neither company seems overly fearful that more FDA oversight will hurt them. “We have long supported reasonable regulation that recognizes the risk continuum, and we are committed to working with the agency to establish a regulatory framework that offers the greatest potential to improve public health,” Susan Cameron of Reynolds said.
No shock there. In 2014, Reynolds absolutely threw the independent vapor industry under the bus, issuing comments about the proposed deeming regulations that asked the FDA to wipe out the open-system products that almost all regular vapers count on to stay off combustible cigarettes.
By design, closed-system cartridges cannot be altered or tampered with by consumers. In contrast, there are a growing number of open-system manufacturersnamely, aerosol tank manufacturers (which are typically located in China) and retail “vape shops” in the United States that sell, mix, and compound flavored liquid nicotine solutions that can be used across or within other aerosol tank products. By their very nature, open-system vapor products present a unique
risk for adulteration, tampering, and quality control not exhibited by any other class of tobacco products. Moreover, due to their variability and use with any number of components, it is unclear if or how these products could gain clearance from the Agency, regardless of the pathway prescribed. For this reason, FDA should, in its final rule, ban the sale of open-system e-cigarettes, including all component parts.
The two US Big Tobacco companies have leveraged their corporate weight and political muscle to dominate the cigarette industry since the FDA was given the power to regulate them. Will they use their might to clear the field of competition in the battle over the vapor industry? If there is no strong independent vaping business, they’ll effectively control both the poison and the antidote. Hey, what gigantic corporation wouldn’t like that?