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 That's much longer than the warnings on traditional cigarette packs
in the United States. Nicotine, the e-cigarette warning says, is
"addictive and habit-forming, and it is very toxic by inhalation, in
contact with the skin, or if swallowed." It is not intended for
women who are pregnant or breast-feeding, or people ... who take
medicine for depression or asthma. "Nicotine can increase your heart
rate and blood pressure and cause dizziness, nausea and stomach
pain," says MarkTen, a leading brand in the United States. The
ingredients can be "poisonous."
MarkTen's parent company Altria, maker of Marlboro cigarettes, said
the language seemed appropriate. There is no required health warning
on electronic cigarettes in the United States, so "we had to do what
we thought was right," said a spokesman for Altria Client Services.
The company's frankness about the perils of nicotine dates back to
the late 1990s, when it led a campaign for cigarettes to be
regulated by the U.S. Food and Drug Administration (FDA). Small
tobacco companies at the time said the big guys would use regulation
to seal their dominance. Today, small e-cigarette makers are saying
the same thing. Many argue that firms like Altria and Reynolds
American want hefty rules to help neutralize the threat that
e-cigarettes pose to their businesses. By accentuating the risks of
'vaping,' they say, big firms may deter smokers from trying the new
devices, even though most scientists agree they are safer.
"If you read that (warning) as a smoker, you might think 'Oh, I'll
just stick with a cigarette,'" said Oliver Kershaw, a former
15-a-day-smoker who quit through e-cigarettes and founded websites
that advocate them.
Big tobacco companies have pushed for a range of controls on
e-cigarettes. These include lengthy health warnings, reduced product
ranges, restricted sales, and scientific testing requirements.
Kershaw and others say such efforts risk squeezing small players.
Too many rules would stifle innovation and reduce the range of
products to "a very simple, utilitarian e-cigarette," said Fraser
Cropper, CEO of Totally Wicked, an independent e-cigarette company
based in the UK.
Big tobacco companies say their goal in pushing for firm control is
not to hurt smaller competitors. Regulation will benefit consumers
and e-cigarette companies alike by ensuring safety and quality
standards and boosting confidence, they say. Small companies should
not be exempt from responsible behavior.
"Our stated goal is to get to e-vapor leadership, to have the
strongest brands in the marketplace," said the Altria spokesman. He
could not predict the impact of increased regulation on smaller
firms. "I don't know how they run their businesses and what it would
cost them to meet those requirements."
Most anti-tobacco campaigners agree that e-cigarettes should be
regulated. But some believe they deserve a lighter touch than
tobacco because they can help smokers quit, and may be less harmful
than smoking.
Measures that make e-cigarettes less appealing or hard to come by
may keep people smoking, these people say. Clive Bates, a former
head of UK charity Action on Smoking and Health (ASH), thinks public
health officials who advocate tough controls end up helping Big
Tobacco's conventional brands.
"They really are all doing their utmost to protect the cigarette
trade," Bates said. "They just don't realize it." He thinks
regulations should encourage smokers to quit, or switch.
The image of e-cigarettes is already changing. The proportion of
people in Britain who think vaping is just as harmful as smoking
doubled last year to 15 percent, according to a survey by ASH. In
the United States, a similar picture is emerging. The growth in U.S.
sales of e-cigarettes slowed to 5 percent in the fourth quarter last
year from 19 percent a year earlier, according to Wells Fargo
analyst Bonnie Herzog. She attributes that partly to increased
uncertainty about the products.
Derek Yach, a director at Vitality Institute, a health research
company, doubts there is any "conspiratorial effort" to crush the
new business. But he says that "if the dominant message is one of
doubt, then the status quo gets maintained." Yach once headed
tobacco control at the World Health Organization and worked at
PepsiCo.
Japan Tobacco International, the world's third-largest tobacco
company, thinks strict regulations could hurt young firms. "If you
make it extremely hard (to comply), you would drive small companies
out of business," said Ian Jones, JTI's head of scientific and
regulatory affairs for emerging products. "You would lose the value
of the category, you would lose the spark."
"OPEN SYSTEMS"
E-cigarettes came onto the market a decade ago promising a safer
nicotine fix. The devices heat nicotine-laced liquid to create an
inhalable vapor, rather than burn tobacco. That gives smokers the
traditional hand-to-mouth ritual without the deadly smoke.
The global vaping market, which could top $7 billion this year, is
evenly split between cigarette look-alikes, often sold by tobacco
companies, and refillable "vapors, tanks and mods" - devices which
users modify to suit their needs. These are often made by smaller
firms. Demand for them is growing three times as fast as the overall
market, as users say they find them more satisfying than early
all-in-one models.
Serious devotees favor such refillable "open systems" that let them
mix and match liquids and batteries to vary their nicotine intake.
Open systems are often sold in vape shops and lend an edgy,
do-it-yourself creativity to the vaping community. According to
Wells Fargo, there are now around 8,500 vape shops in the United
States and 19,400 globally. Vape shops account for about one-third
of all U.S. sales, while the Internet accounts for another third.
In August, Reynolds – which does not produce mods - urged the FDA to
"ban open system e-cigarettes, including all component parts." Such
systems, Reynolds wrote, present a "unique risk for adulteration,
tampering and quality control."
If the FDA does not want a ban, Reynolds suggested, it should
regulate vape shops as manufacturers. That would subject them to FDA
inspection, registration, manufacturing standards and product
clearance requirements.
Vape shops often mix nicotine and flavoring, just as pharmacies
compound drugs, said Richard Smith, communications manager at
Reynolds. This means "the vape shop seller is a manufacturer under
the applicable laws and regulations."
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E-cigarette independents say such a move targets them; analysts note
that the business model of big tobacco firms depends on mass
production, not mix-and-match.
"I think they (Reynolds) probably want that snuffed out before it
gains traction," said Philip Gorham, an Amsterdam-based tobacco
analyst at Morningstar.
Reynolds says that's not true. "We fully support innovation in
tobacco products, including vapor products," said Smith. The company
wants "a level playing-field where all manufacturers are subject to
equal treatment."
DOING THEIR DUTY
Shane MacGuill, a tobacco analyst at market research firm
Euromonitor International, said Reynolds' move may seem zealous, but
companies have a duty to shareholders: "It would be remiss ... of
them not to try and push for the competitive environment that is as
favorable to them as possible."
Steven Parrish, a former Altria executive who retired in 2008, said
that as long as people are honest, there's nothing wrong with
advocating to protect their interests. And embracing regulation can
help the tobacco industry win trust.
"I think one of the things the industry would like to see ... is a
world in which the tobacco industry is much more like the
pharmaceutical industry in terms of how it operates," he said: "Very
heavily regulated and maybe not loved and admired, but at least
acknowledged as a legitimate business."
That makes young people a particularly sensitive point of tension.
Most e-cigarette companies want tighter controls on who can buy,
such as a minimum age. Altria's NuMark goes further. It says U.S.
purchases should also be "clerk-assisted or conducted in an
otherwise non-self-service environment."
Smaller e-cigarette makers say that would hand a big advantage to
tobacco companies.
U.S. convenience stores are the main outlets for tobacco products.
Tobacco firms offer the stores rich incentives to promote their
brands, and according to Morningstar, tobacco can provide more than
a third of stores' profit. Cigarettes can only be sold behind the
counter. They are displayed on heavily branded shelving which the
tobacco firms often provide.
Putting e-cigarettes behind the counter would force the products to
compete for consumer attention in space that tobacco firms
influence, small companies say.
"As long as you say it has to be 12 feet from a child's hand at the
counter, it guarantees (the e-cigarette) gets onto their wall," said
Jan Verleur, CEO and co-founder of VMR, a Miami-based e-cigarette
company.
Altria says retailers choose how and where to display products.
EARLY WARNINGS
Some small e-cig firms are pushing back. Totally Wicked is
challenging Europe's Tobacco Products Directive (TPD), which was
adopted in 2014 and comes into force in 2016.
It's up to member states to apply the EU rules in their own way, but
the directive says manufacturers must tell regulators what's in a
new product six months before launch. Producers will have to list
ingredients, emissions, toxicological data, nicotine doses and
uptake, as well as health effects. A new notification is required
for every big change.
Totally Wicked is fighting the TPD in the EU Court of Justice in
Luxembourg. Such detailed reporting is more onerous even than for
traditional cigarettes, the company argues. It says it is
disproportionate, considering that e-cigarettes are probably less
harmful. Its CEO says the six-month notification would slow
innovation in an industry where manufacturers can move from concept
to shelf in 10 weeks.
British American Tobacco's Nicoventures unit agrees with Totally
Wicked that the six-month notice period "runs the risk of stifling
innovation," according to a spokeswoman.
But global tobacco leader Philip Morris International – which used
to be part of Altria - said it thinks this kind of advance
notification is appropriate to ensure standards. Its own tests
already go beyond the TPD rules, a spokeswoman said. Robust
scientific research is "something we believe in as the core of our
work in this new product category."
In the United States, the FDA aims to deliver its final ruling on
e-cigarettes in June. E-cigarette firms there say anything that
requires lengthy and costly trials could be manageable for big
business but may hurt smaller companies. "The more science that's
required, the more expensive it becomes," said Sanjiv Desai, general
counsel of U.S. e-cigarette firm VMR.
A spokesman for the FDA said it was weighing the burden on everyone,
including small manufacturers. It plans to help small companies by
phasing in new rules. The European Union also plans to give firms
time to adapt. It has said clear rules will help smaller firms; it
plans to assess the costs of notification.
For Yach, the former WHO tobacco official, regulators should
remember that e-cigarettes are more than a new business. "A heavy
smoker has a 20 times greater risk of lung cancer," Yach said.
"Switch to e-cigarettes and that risk is virtually going to zero."
(Edited by Sara Ledwith)
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