Illegal E-cigarettes Occupy Half Of The Country? Altria Called On The Trump Administration To Strengthen Market Regulation

Illegal e-cigarettes occupy half of the country? Altria called on the Trump administration to strengthen market regulation

Billy Gifford, CEO of Altria Group, called for stronger regulation of the e-cigarette market, unregulated e-cigarette brands have accounted for half of the market, and he suggested that the FDA should provide more safe and legal alternatives to stop illegal products from entering the market.
According to journalnow, Altria Group Inc. CEO Billy Gifford is stepping up his efforts to voice concerns about unregulated imports of e-cigarette products in hopes of getting the attention of the U.S. Food and Drug Administration (FDA) under the Trump administration.

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"The primary driver of industry and smokeless product growth continues to be the widespread availability of illegal single-use e-cigarette products," Gifford told analysts on Altria's fourth-quarter conference call. He claims these products are "jeopardizing the long-term opportunity for tobacco harm reduction that the FDA has authorized for U.S.-made e-cigarette products."

Gifford pointed out that the U.S. market has clearly divided into two: one that operates within a regulatory framework, and the other that blatantly violates and circumvents regulations. "Simply put, we believe the regulatory structure is broken and the tobacco market is not working as intended by Congress." The number of smokeless products authorized by the FDA is not sufficient to meet consumer demand with legal products."

In June 2009, the Democratic-controlled Congress passed the Tobacco Control Act, which gave the FDA oversight authority over the tobacco industry. During the Biden administration, however, anti-smoking and anti-tobacco advocacy groups accused the FDA of being slow to regulate unregulated imported e-cigarette products.

According to Altria, the three unregulated brands leading in market share are Zone, Fre and Juice Head, as well as Elf Bar, Breeze and Mr. Fog. In a September report, the Centers for Disease Control and Prevention (CDC) noted that about 87 percent of teen e-cigarette users, or 1.4 million people, prefer fruit, candy and dessert-flavored products, which are mostly sold by unregulated manufacturers.

British American Tobacco Plc and Altria have been pressing the FDA for more than a year to step up enforcement of unregulated synthetic products. The companies separately claim that these products account for about half of the current e-cigarette market in the United States.

Gifford said Altria estimates about 28 million adults use vaping and oral tobacco products, primarily Swedish Match's Zyn nicotine packs. That's almost as many adults as traditional cigarette smokers. In 2023, Altria fully acquired NJoy for $2.75 billion in cash.

At the time, Altria argued that unregulated vaping products were a small factor. However, Gifford said, "The illicit e-cigarette market has grown to a size and extent beyond our expectations... This has impacted our ability to achieve our 2028 smokeless sales and revenue targets as well as specific NJoy fiscal targets."

Smoke-free alternatives are expected to account for 45% of the overall nicotine market in 2024, up from 40% in 2023, a mixed blessing for Altria and British American Tobacco. While the tobacco industry's acceptance of smoke-free alternatives is growing, Gifford said regulators are "not holding malicious actors accountable."

A bipartisan coalition has formed in Congress to push for further restrictions on unregulated e-cigarette products. On June 11, the FDA and the U.S. Department of Justice announced the formation of a task force involving other federal agencies aimed at addressing the domestic distribution and sale of illegal e-cigarette products. The FDA has announced multiple crackdowns on unregulated e-cigarette products.

At the same time, the International Trade Commission is investigating "misconduct in the import and sale of disposable e-cigarettes and other disposable products, as well as patent infringement." Gifford believes the FDA can restore order to the market by approving more pre-market tobacco applications to establish a legal alternative market and working with other federal agencies to stop illegal products from entering the United States. According to Clive Bates of Counterfactual, a London-based public health and sustainability consultancy, the FDA's proposed tracking number is nothing more than an "unlimited whack-a-mole" approach. "The FDA is trying to convince Congress that it needs more money to solve a problem that is entirely of its own making," Bates noted.

Betts also said the only way to defeat illegal trade is to offer a wide range of legal products that people want to buy and use. The FDA's failure to create a safe enough alternative market for cigarettes is the ultimate cause of the illicit trade.