New E-cigarette Regulations Benefit Big Tobacco
The e-cigarette industry has blossomed into a $2 billion business, providing thousands of manufacturing and retail jobs while offering smokers a safer alternative. Unfortunately, this thriving market is under threat due to new rules finalized in May by the U.S. Food and Drug Administration (FDA).
The new rules expand the regulatory authority of the FDA to cover all tobacco or tobacco-related products — including e-cigarettes, many of which contain no tobacco whatsoever.
Like cigarettes, other forms of tobacco consumption can be addictive because of nicotine — which is why the FDA has asserted regulatory authority. While most e-cigarette products do not contain tobacco, they still use flavored juices that contain nicotine. Smokers can use e-cigarettes to supplement or, in some cases, replace their regular tobacco usage. The FDA worries that these products will increase nicotine addiction rates, especially among youth, and thereby lead to increased tobacco usage overall.
While it could be argued that e-cigarettes and other tobacco-related products should be regulated in a way that puts them on an even playing field with cigarettes, the rules do not limit the FDA to making regulations fair. The rules give the FDA broad authority to regulate tobacco products in whatever way the agency wants. For many of these rules, the FDA will issue “guidance” rather than spelling out the restrictions in the finalized regulations. Unlike formal rules, guidance does not need to go through a formal approval process. Thus, there is simply no oversight to ensure equitable regulation.
Most e-cigarette producers and retailers are small businesses, not multibillion-dollar corporations like Philip Morris. Many e-cig and vape shop owners produce their own juices and flavors which, according to the new rules, must soon be individually tested and approved by the FDA.
Open-ended regulations and big business do not bode well for a competitive market. As in other industries, large and powerful tobacco companies are able to engage in political rent seeking by pushing through policies that benefit them and harm their competition.
The motivation behind Big Tobacco’s e-cig scare is easy to spell out: e-cigarettes pose a threat to them. According to a study from the EU, e-cigarettes are responsible for up to 30 percent of cigarette smokers reducing their cigarette consumption or quitting altogether.
The rules finalized by the FDA will likely decimate much of the e-cigarette industry, from producers to retailers, potentially eliminating tens of thousands of jobs. Their business models are simply not equipped to absorb the regulatory costs imposed by these regulations; many shops and producers will have to shut down rather than attempt to comply with them. And less competition is good news for Big Tobacco — especially if vapers transition back to traditional cigarettes.
Some e-cigarette companies and advocacy groups are beginning to fight back, including the vaping industry’s Right to Be Smoke-Free Coalition. Five lawsuits have already been filed against the FDA over the rule. The groups argue that the FDA has no rationale for regulating non-tobacco products in the same way as cigarettes. We can only hope the judges agree.
In an attempt to promote public health, the FDA is limiting consumer choice through unnecessary and prohibitive regulations. Without the option of using safer alternatives, smokers addicted to nicotine may be left with only two choices: quit cold turkey or continue to consume traditional cigarettes — just what Big Tobacco wants.
Jonathan Nelson is a Young Voices Advocate and a graduate of Grove City College.