Illicit nicotine pouches on the rise in US, Altria CEO says

[August 01, 2024]  (Reuters) - Marlboro maker Altria said on Wednesday it had sent data to the U.S. Food and Drug Administration on growth in illegal nicotine pouches, saying it echoed the early stages of a now massive black market for vapes in the country.

Cigarette makers like Altria and British American Tobacco have lost substantial U.S. sales to e-cigarettes that are being illegally marketed without FDA authorization, including illegal disposable vapes from China.

Altria said the supply chains supporting this market were enabling illegal activity across multiple nicotine products, and it had identified more than 350 unique illegal nicotine pouches on sale with new brands launching every month.

"This illicit market echoes the beginning of the illicit e-vapor market several years ago," Altria CEO William Gifford told analysts on a call to discuss its second-quarter results, adding the company had shared data on the issue with the FDA earlier this month.

"We believe it is critical that the FDA acts decisively to regain control of the oral nicotine pouch category to prevent another widespread illicit market from taking hold," he said.

The FDA did not immediately respond to a request for comment.

A woman poses with a cigarette in front of Altria logo in this illustration taken July 26, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Gifford said Altria had also observed an increase in illicit cigarettes, one survey of discarded packs in California finding that some 25% were non-U.S. brands, mostly originating from duty-free channels or China, he said.

Earlier this month, analysts also warned Philip Morris International's chief financial officer that they had observed sales of its nicotine pouches intended for the Scandinavian market on sale in the United States.

(Reporting by Emma Rumney in London and Juveria Tabassum in Bengaluru; Editing by David Holmes)

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