Big Tobacco back on TV featuring electronic cigarettes as FDA readies rules on ads for such products; government expected to announce its plan for regulation as early as October
September 4, 2013
– Decades after the Marlboro Man strutted his stuff on the nation's airwaves, Big Tobacco is back on TV pitching new nicotine products that look like cigarettes — and some of the ads are in-your-face defiant.
"It's time we take our freedom back," asserts actor Stephen Dorff, oozing machismo as he says "blu e-Cigs" can be smoked "at a basketball game ... in a bar with your friends ... virtually anywhere." Inhaling with swagger, he adds: "Come on, guys, rise from the ashes."
These ads for electronic cigarettes, or e-cigarettes, including new ones with former Playboymodel and upcoming co-host of The View Jenny McCarthy, hark back to an era when smoking was en vogue and people could light up on airplanes, in offices and, really, wherever they liked.
These suddenly chic offerings are sparking another round of the tortured tobacco wars. Each of the nation's top three tobacco companies has recently entered the booming, unregulated e-cigarette market (still only a fraction of total tobacco sales.) At the same time, more states are restricting the product, and the U.S. government is expected to announce -- as early as October -- its plan for regulation.
Many Americans are experimenting with e-cigarettes. About 6% of all U.S. adults and 21% of adult smokers said they tried them in 2011, double the 2010 rate, according to the most recent data from the Centers for Disease Control and Prevention. The CDC also found six in 10 were aware of them in 2011, up from four in 10 a year earlier.
Given the product's rise in popularity, public health officials are scurrying to figure out its safety. These battery-operated devices don't contain the myriad harmful chemicals of regular cigarettes, but by heating a nicotine solution into a vapor that users inhale, they still provide the addictiveness of nicotine. So there's debate over whether they're more apt to lure kids toward tobacco or help adults kick the habit.
The Food and Drug Administration will soon step into the fray. It's expected to assert its authority to regulate them as tobacco products, because their nicotine is, after all, derived from tobacco leaves.
But should e-cigarettes, used by some smokers to quit and by others to circumvent smoke-free laws, be regulated like Camels and Marlboros? Should they be taxed the same? Should Internet and underage sales be banned and sizable warning labels be required? And, as occurred with regular cigarettes in 1970 after the surgeon general warned of tobacco's dire health risks, should their ads be banned from TV?
"No one knows what will come out. The FDA has played its cards close to the vest," says Georgetown University pulmonologist Nathan Cobb, who sees e-cigarettes as nicotine replacement therapy akin to gum, patches and lozenges.
The e-cigarette market, fragmented with more than 200 companies, expects federal regulation and largely seems willing to accept some rules such as a ban on sales to minors. Yet its member say the rules shouldn't be as stringent as they are for regular cigarettes.
"It's different from a regular cigarette. ... It should be category-specific," says David Sylvia,spokesman for Altria, the parent company of Philip Morris, the nation's largest tobacco company and maker of Marlboros. Altria debuted its first e-cigarette — MarkTen — in mid-August in Indiana but declines to say whether it will advertise on TV.
R.J. Reynolds, the second-largest U.S. tobacco company and maker of Camels, started TV and print ads last month for its recently revised VUSE brand, which it began rolling out nationally in July. Aware of the public's sensitivity to TV tobacco marketing, VUSE spokesman Richard Smith says its ads won't show people inhaling as do those for blu-eCigs, a company bought last year by Lorillard, the nation's third-largest tobacco company and maker of Newports.
How these Big Three fare in the e-cigarette market is "really dependent on regulation and taxation," says Citigroup's tobacco analyst Vivien Azer, who has switched entirely to e-cigarettes after more than 20 years of smoking.
Other e-cigarette users, including David Luckie of Mobile, Ala., who smoked two packs a day for nearly 35 years but is now "100% vapor," says the device is the first that enabled him to quit cigarettes.
"The day I got my e-cigarette (four years ago) is the last day I smoked a cigarette," says Jan Johnson, a Publix cashier in Englewood, Fla., who was previously addicted to Marlboros.
WHAT'S IN AN E-CIGARETTE?
"We've had reports of them exploding. Since we don't know what's in them, we don't know why these things are happening," says FDA spokeswoman Jennifer Haliski, adding that thorough research is needed to assess potential risks and benefits. She says the government doesn't know whether e-cigarettes could lead youths to try other tobacco products.
Studies so far are mixed. Some cite potential hazards, including a secondhand effect from the vapor, and a small Greek study last year said e-cigarettes may damage the lungs. Cobb, the Georgetown pulmonologist, says because almost all are imported from China, there have quality-control issues, contamination concerns and widely varying nicotine levels.
Other research finds that they don't harm the heart and could help smokers quit. In a 2011 study co-authored by Michael Siegel of the Boston University School of Public Health, 67% of the 222 smokers queried said they smoked less after using e-cigarettes and 31% said they kicked the tobacco habit.
Given this scientific uncertainty, states are cracking down. New Jersey was the first state, in 2010, to extend indoor smoking restrictions to e-cigarettes. In the past year, four more states have followed — Indiana, Mississippi, North Dakota and Utah — and such limits are pending in California and Pennsylvania. Legislators in at least seven states have sought to tax e-cigarettes, but so far Minnesota is the only state to do so.
The inhaling of e-cigarettes — in a practice known as "vaping," not smoking — has been banned aboard U.S. planes and Amtrak trains.
Yet public acceptance and sales are soaring for a product that barely existed in the United States before 2007. E-cigarette revenue has been doubling year over year recently, and Wells Fargo's tobacco analyst Bonnie Herzog expects total annual sales to reach $1.7 billion by the end of 2013 and eclipse $10 billion by 2017. Though e-cigarettes are currently a fraction of the total $80 billion U.S. tobacco market, Herzog says, their consumption may surpass that of regular cigarettes by 2013.
Young adults view these e-devices positively, and half say they'd try them if offered by a friend, particularly because they come in flavors such as bubble gum, cherry, pink lemonade, s'mores and chocolate, according to a 2011 University of Minnesota study.
This popularity — coupled with rebelliously hip ads — worries Matt Myers, president of the Campaign for Tobacco-Free Kids, whose advocacy group has long fought Big Tobacco. He says the new ads are eerily similar to those of yore that addicted many adolescents.
"There's a very real risk that decades of work to deglamorize smoking could be undone with this kind of marketing ... and we'll see an increase in youth tobacco use," Myers says.
E-cigarette advertising, unburdened thus far by regulation, has ballooned from zero in 2008 to $3.7 million in 2011 and $19.9 million last year, according to a recent Citigroup report by Azer. TV ads accounted for 18% of the spending last year.
Arizona-based NJoy, which advertised its top-selling King brand at this year's Super Bowl, has produced some of the most provocative spots. One shows rocker Courtney Love vaping in a palace-like setting when a tiara-clad woman says: "You know you can't smoke in here." Love's response: "Relax ... it's a (expletive) NJoy."
Craig Weiss, the company's CEO, says he doesn't sell to kids or make candy flavors but would oppose FDA limits on advertising. He says there's no proof that e-cigarettes cause as much harm as regular cigarettes so regulations should differ.
"I'd respond very forcefully to any attempt to limit my free speech right to promote my product," Weiss says.
Others in the industry say they're not really part of the tobacco market. "This is a liquid vaporizer. ... It's a technology product, not a tobacco product," says Eli Alelov, co-founder of LOGIC, a New Jersey-based manufacturer. He says he only uses the term "cigarette" to sell his product.
Blu-eCigs, a brand that Lorillard purchased last year, "are not attractive to kids" despite their multiple flavors that include vanilla, "cherry crush" and "peach schnapps," says Jason Healy, the company's founder.
Azer, the tobacco analyst, says she expects the FDA to ban both flavors and Internet sales, which so far have benefited the smaller companies that don't have a brick-and-mortar sales presence. As such, she says, she expects regulation will consolidate the industry — to the benefit of major players such as NJoy and Big Tobacco.
Big Tobacco welcomes a "balanced" FDA approach. "Relevant regulation allows the business to have more certainty," says Altria spokesman Sylvia, adding that such certainty is good for the bottom line.
Others note they've dealt with tobacco rules before and can do so again. Sounding bullish on the "significant" market for e-cigarettes, R.J. Reynolds' spokesman Smith says: "This category is here to stay."
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