By Chris Morran
If you go into a convenience store to buy cigarettes, you might have a wide variety of smokes to choose from, but most of those brands are made by three or four huge tobacco companies. But if you’re one of the growing number of consumers who choose vaping over traditional cigarettes, there are seemingly countless small companies willing to sell you liquid nicotine. Some of those startups say that pending FDA regulation of e-cigarettes could put them out of business, leaving only big tobacco.
The FDA is currently deciding whether or not to consider liquid nicotine a tobacco product. If it does, the makers of the vaping liquids would be subject to a rigorous review process that would include providing the FDA with detailed information about ingredients, manufacturing processes, and potential health effects.
Some small companies believe the additional cost of complying with the new rules would be too much for them to take on.
The president of the American Vaping Association tells the L.A. Times he predicts that 99% of small vaping businesses would shutter as a result.
It’s not just the makers of these products that are concerned. Those who sell and distribute them worry that FDA requirements favor the large tobacco companies that have the resources to deal with the red tape, and who are already competing in the e-cig market.
Lorillard, maker of Newport, Kent, and Maverick cigarettes, is behind the Blu brand of e-cigs. The smallest of the big U.S. tobacco companies, it has a market cap of around $26 billion. Altria, the folks behind Marlboro, Virginia Slims, and others, has the MarkTen brand (and a market cap of more than $100 billion), while Reynolds America (market cap: $61 billion) produces the Vuse brand of e-cig, along with Camel, Kool, Lucky Strike and other cigarettes.
“Making the claim that they are proposing the regulations the way they are written to make a safer product, knowing that the only people who are going to be able to compete is big tobacco, is ludicrous,” the president of a liquid nicotine wholesaler tells the Times.
If the FDA does extend tobacco regulation to cover liquid nicotine, manufacturers would have two years to comply with the new rules. It’s hoped that this will give them sufficient time and not drain resources needed to stay in business.