Tobacco's Surprising Partners in Stubbing Out Vaping
Under increasing pressure, big tobacco companies are doing everything possible to keep electronic cigarettes, which offer a safer nicotine alternative, from intruding upon their shelf space. You might be surprised by their allies in these efforts: regulators and politicians. But the decision to vape or not should be left to adults, not policymakers controlled by Big Tobacco.
Electronic cigarettes, like many other products we consume, such as whiskey and ribeye steaks, have potential health risks. But evidence shows they’re a much safer alternative to traditional cigarettes. One study shows that, even under pessimistic assumptions about smoking cessation and the relative harm of smoking alternatives, the switch to vaping still could save smokers millions of life years.
It is easy to see why vaping, which offers a safer product with reportedly better taste and smell due to its wider availability of flavors, is edging out traditional cigarettes in the marketplace. So much shelf-space is turning over to vaping products that it's becoming hard to find a tobacco retailer that hasn’t put a reference to vaping products in its store name. In a free market, most investors would see the writing on the wall and shift resources away from tobacco and into e-cigs to better serve the changing needs of customers.
But tobacco companies aren’t competing in a free market. Tobacco is a heavily regulated industry. And Big Tobacco learned long ago how to use their financial clout to make sure the regulatory process works in their favor. Now the puppeteers are dumping money into the political system to ensure that regulators help protect the tobacco industry from the preferences of their own customers. Cigarette companies spent over $20 million lobbying in 2021 and registered almost $3 million in campaign donations. Meanwhile, tobacco worker unions have been exerting immense pressure on policymakers.
What protection is Big Tobacco getting in return? In 2014, the FDA classified electronic cigarettes as a “tobacco product,” bringing them under the regulatory purview of the FDA’s Center for Tobacco Products. This gives Big Tobacco two major advantages over its competitors.
The first involves the unique way in which the Center for Tobacco Products (CTP) is funded. The CTP receives over $700 million annually from a tax on traditional cigarettes. But realize, this means that if consumption of tobacco cigarettes declines due to vaping, the CTP’s research budget, and the jobs it provides, are at stake!
The second advantage that Big Tobacco has under the CTP is the fact that regulators are biased against approving new products, even if they are safer than products already approved. This is because CTP leaders, under the “precautionary principle,” are far more likely to be punished for approving a product that hurts even a few people than they are for delaying and preventing the approval of a product that could save far more lives.
These two advantages have made the approval of vaping products at the CTP difficult if not impossible. The CTP now considers vaping to be harmful by default and puts the burden of proof on the industry to demonstrate that electronic cigarettes are harmless before consumers are allowed to put out their traditional cigarettes, which are far more dangerous by any objective measure. The onerous new approval process for tobacco products is, unsurprisingly, plagued by long delays and ad hoc changes in approval requirements.
One might be tempted to disregard this argument simply because Big Tobacco has hedged its bets by also investing in some vaping companies, such as Juul and Vuse. But, unsurprisingly, these companies appear to be getting preferential treatment in the CTP regulatory process.
And Big Tobacco isn’t stopping there. They’ve developed a deep political playbook at the federal and state level as well. At the federal level politicians with links to tobacco companies are promoting federal taxes on electronic cigarettes and even tax cuts on traditional cigarettes. At the state level, there are campaigns to ban flavored electronic cigarettes and to divert some Master Settlement Agreement funds from anti-tobacco advertising to anti-vaping advertising.
Big Tobacco, with little regard for the preferences or health of their consumers, is doing everything possible to protect their shelf-space from the competition coming from upstart electronic cigarette companies. And they are using their long experience massaging the political process to motivate regulators and policymakers to work in their favor. Maybe it is time to cut them out of the process and let adults decide whether to smoke or vape.
Daniel J. Smith is the director of the Political Economy Research Institute at Middle Tennessee State University and professor of economics at the Jones College of Business. Twitter: @smithdanj1.
