SFATA Press Release

Apr 15, 2014

E-cigarette makers worry new regulations will snuff out emerging business

By Kevin Bogardus and Julian Hattem

Electronic cigarette makers and retailers are scrambling to escape expected new regulations that they say could wipe them out. [WATCH VIDEO]

As the $2 billion e-cigarette industry is gaining ground around the country, so is its lobbying presence in Washington. A fledgling trade group, the Smoke Free Alternatives Trade Association (SFATA), is flying members into Washington next week to meet with congressional staff and lawmakers to warn them about anticipated new rules from the Food and Drug Administration (FDA).

They will be arguing that their devices should not be subject to same rules governing tobacco products, but will have to face off with public health groups as well as tobacco giants like Altria.

“It is a concerted effort to make the business case for electronic cigarettes to Congress,” said Cynthia Cabrera, SFATA’s executive director. “It’s the perfect time for us to go and provide the faces to this industry.”

Thirty people representing 19 different companies — including electronic cigarette makers, retailers and distributors — will be coming to the capital as part of the trade group’s first fly-in visit.

SFATA members will be sharing draft legislation and looking for potential sponsors for their legislation. That draft bill says e-cigarettes, e-cigars and other vaporizing devices are not tobacco products.

“We would really like to set up a separate framework for regulation. It wouldn’t have the burdensome compliance expenses. The reporting expenses under the Tobacco Control Act are onerous,” Cabrera said. “No one is saying that there shouldn’t be regulation but that there should be appropriate regulation for this product.”

Tobacco giant Altria — the parent company for Philip Morris USA and NuMark, which markets e-cigarettes — feels differently, saying the new product warrants FDA scrutiny.

“We believe electronic cigarettes should be regulated by the Center for Tobacco Products at the Food and Drug Administration because, by definition, it is a product that is derived from tobacco,” said David Sylvia, an Altria spokesman.

Part of SFATA’s pitch to lawmakers next week will be that its members are small businesses squaring off with tobacco behemoths.

“Big tobacco companies are encouraging the federal government to exert their regulatory authority that would effectively wipe out its competition. It seems a little like the government would be leveling the market for them,” Cabrera said.

Sylvia disagreed, saying that government regulations haven’t prevented tobacco companies from developing new brands and products in the past.

“I just don’t see how additional regulation has stifled business in tobacco,” Sylvia said.

The lobbying effort to protect e-cigarettes is expected to ramp up once the FDA unveils its proposal.

Eric Criss, the head of the Electronic Cigarette Industry Group, said his organization has been targeting the FDA as well as state legislatures, where several bills are under consideration, but hasn’t yet focused on Congress.

“I think at this point it’s primarily an FDA issue,” Criss said. “Once FDA acts, I think there may be a number of reasons to be over on Capitol Hill.”

The FDA’s proposal to expand its authority to encompass e-cigarettes, cigars and other types of tobacco products is currently under review at the White House’s Office of Management and Budget (OMB). Currently, the FDA can only regulate traditional cigarettes and smokeless tobacco.

The wait for the new rules has left K Street on tenterhooks.

“It’s a big waiting game because everyone [in the tobacco industry] is trying to figure out what the hell they are going to put out. The regs are sitting at the OMB, they are doing their due diligence and they’re behind because of the shutdown,” said one Republican lobbyist representing electronic cigarettes.

The draft rules were expected out by the end of October, but the OMB has until the end of December to finish its review. That deadline could be extended into next year.

The rule might allow the FDA to subject e-cigarettes to new fees and restrictions, which public health advocates say are necessary to protect children from aggressive marketing.

“It’s critical that they get it out as quickly as possibly to put in place the sales and marketing restrictions that are on other tobacco products to keep them from appealing to kids and misleading consumers,” said Danny McGoldrick, the vice president of research at the Campaign for Tobacco Free Kids.

Public health advocates said that until e-cigarettes are proven to be safer than regular tobacco products, they should be subject to the same types of rules and regulations.

“We need FDA oversight of these products urgently,” said Erika Sward, assistant vice president of national advocacy for the American Lung Association. “From a public health perspective, they need to prove that these products are not detrimental to public health and they haven’t done that.”

In an Oct. 17 letter to OMB’s Office of Information and Regulatory Affairs, SFATA said that their products do not pose the same health risks as normal cigarettes — noting some e-cigarettes don’t even have nicotine — and shouldn’t be treated the same way. The vapor e-cigarettes emit is different than cigarette smoke, they point out.

“E-cigarettes are not analogous to tobacco cigarettes and, therefore, they should not be regulated in the same manner,” the trade group wrote.

SFATA also said in the letter that new rules could “devastate” the industry in its infancy.

E-cigarette critics nevertheless are worried about the products’ appeal to children.

A recent report from the Centers for Disease Control and Prevention (CDC), which the industry has disputed, found that the percentage of middle- and high-school students who had ever tried e-cigarettes doubled from 2011 to 2012. Close to 1.8 million students had tried the products in 2012, according to the CDC.

The percentage of U.S. middle and high school students who use electronic cigarettes, or e-cigarettes, more than doubled from 2011 to 2012

Public health advocates said that the lobbying push by e-cigarettes is just following the lead of major tobacco companies.

“They’re everywhere,” McGoldrick said. “They’re right out big tobacco’s playbook in terms of their marketing tactics, in terms of their opposition to regulation.”

http://thehill.com/blogs/regwatch/pending-regs/189030-e-cigarette-makers-ramp-up-lobbying-efforts

Apr 15, 2014

Kicking The Habit in Missouri

by Mike Ferguson

(St. Charles, MO) – Everyone knows that smoking is a bad idea. It’s unhealthy, it’s expensive and, frankly, it stinks.

So why do so many still do it and why do so many young people still start the addiction every day?

According to Matt Kuhlenbeck from the Missouri Foundation for Health, there is no one answer. The reasons people start lighting up are as individual as the people themselves.

The Missouri Department of Health and Senior Services says the Show Me State has the ninth-highest smoking rate in the nation. About a quarter of adults and 18% of high school students light up.

When it comes to convincing young people to stay away from tobacco, though, sometimes the best approach is to go beyond the health warnings. Kuhlenbeck thinks letting teens know they are a financial target for tobacco companies is a start. That’s the empowerment idea behind a program called “Smokebusters” being used in many Missouri schools.

“How are they being manipulated to look at tobacco in a way that it’s attractive? So, how are advertising documents and other things being designed to make tobacco look attractive?

“These programs are designed to empower youth to make these decisions on their own, provide them with the tools and resources and understanding to know, one, what the health issues are…but then also understand how marketing is used to influence behavior.”

In other words, at an age where telling someone not to try something often makes them want to try it out of youthful rebellion, let them in on the fact that tobacco companies are trying to tell them to start smoking. Maybe they’ll push back the same way.

Much of the Smokebusters program is youth-driven.

It’s a program for those in the eighth through eleventh grades and focuses on critical thinking skills as much as on the science of tobacco and health.

For adults already hooked on tobacco who want to quit: there’s help available.

While Kuhlenbeck recommends starting with your doctor, many free or inexpensive resources are available. Those options include the 1-800-QUIT-NOW hotline and www.BecomeAnEx.org, which is an online community of people who are trying to stop the tobacco habit.

It’s not too late to stop, no matter how long you’ve been puffing away on cigarettes or cigars. According to Kuhlenbeck, “When you quit smoking, you immediately begin to change the physical aspects of what’s happening to you. Within six months, you will be a different person physically as a result. ”

One of the newest nicotine products on the market may also be one of the most confusing ones right now.

They are called “electronic cigarettes” and they do not have any tobacco in them. The “e-cigs” deliver nicotine through heating a liquid that turns to vapor and is then inhaled the way a regular cigarette is smoked.

Cynthia Cabrera is the Executive Director of the Smoke Free Alternatives Trades Association, which represents e-cig makers and retailers. To her, the difference means they are not in the same category of products. “Vaping”, she says, is not just another way of smoking and should not be treated like a tobacco issue.

Some consumer and health advocates have expressed concern that electronic cigarettes, while not delivering the carcinogens that tobacco products contain, could lead people into a nicotine addiction that might result in smoking later.

Cabrera says that’s not what e-cigs are for.

“They’re not designed to lure nonsmokers. There’s no interest for nonsmokers. What this is, is an adult alternative for people who want to get their nicotine fix, their hit, but they don’t want to do it with a traditional tobacco, combustible cigarette.”

In fact, Cabrera says, some electronic cigarettes don’t contain nicotine at all.

While she is careful to say that e-cigs are not meant to be a smoking replacement program, she does point out what consumers are not getting when choosing them over regular cigarettes.

“Since they don’t contain tobacco they also don’t contain hundreds, up to thousands, of different chemicals that can be found in tobacco.”

She says there’s another benefit to smokers trying an electronic cigarette instead of a tobacco one: there’s no smoke smell. The vapor doesn’t have an odor and it dissipates in about 20 seconds after being breathed out.

In that sense, it’s safer than a regular cigarette because there is no secondhand smoke to impact everyone else. As far as the impact on the smoker (or person who is “vaping” in this case) goes, Cabrera points out that there’s not enough research to make claims one way or the other, other than to acknowledge that the tobacco and related carcinogens are not present in them.

Still, the health debate with e-cigs involves the same people as it does with tobacco, according to Cabrera.

“This is a product that’s marketed to current smokers. People who are non smokers are not interested in this product.”

On the web:

Missouri Foundation for Health: www.MFFH.org

Smokebusters: http://www.casemo.org/smokebusters/

http://missouriviewpoints.com/kicking-the-habit-in-missouri/

Apr 15, 2014

SFATA to Talk Regulations at Day on the Hill Event

October 29, 2013 8:00PM
WASHINGTON, D.C.- Elected officials on Capitol Hill will hear from another voice on the regulation of electronic cigarettes.

Continue reading article:
http://www.csnews.com/product-categories/tobacco/sfata-talk-regulations-day-hill-event 

Apr 15, 2014

City to Boost Purchase Age for Tobacco

City to Boost Purchase Age for Tobacco

E-Cigarettes Also Covered Under City Council Legislation

Apr 15, 2014

Awaiting FDA, states pursue their own e-cigarette rules

The decades-long battle between big tobacco companies and the health-care community has evolved from a debate over stinky bars and second-hand smoke to a debate over vapor flavored like Fruit Loops and gummy bears.

Those are just two of the flavors available to consumers of electronic cigarettes. The product looks like a cigarette, but it delivers nicotine in the form of water vapor. They are different enough from regular cigarettes that existing federal and state laws didn’t cover them, setting up a race to impose new regulations — and they’re becoming big business for tobacco companies that have seen sales flag elsewhere.

Legislators in dozens of states are facing three questions when they consider regulations: Who should be able to use the product? How should the product be taxed? And what, exactly, is it in the first place?

The last question is the most vexing, to industry advocates and health activists alike. Whether state legislatures decide they should be viewed as tobacco products or as something separate will determine how they are taxed, and if they are subject to the same indoor bans most states have imposed on regular smoking materials.

Health advocates want e-cigarettes classified in the same category as regular cigarettes. Doing so, they say, would allow states to treat e-cigarettes under existing law.

“We want them included in the definition of tobacco product. It’s really one of the easiest ways to handle them,” said Thomas Carr, director of national policy at the American Lung Association. “Nothing else has to change, really.”

But the industry says that unfairly stigmatizes their product as a tobacco product. They hope to position e-cigarettes as a safer alternative to cigarettes, even as a step toward quitting smoking altogether.

“Our goal as an industry is to distinguish ourselves from cigarettes, and there’s a very important reason that we want to be defined at the state level not as a tobacco product,” said Eric Criss, president and chief executive of the Electronic Cigarette Industry Group. “We believe the product is a good alternative, and the goal should be to move people down the risk ladder from cigarettes.”

Four states — Utah, North Dakota, Arkansas and New Jersey, plus the District — have already sided with the American Lung Association by including e-cigarettes in indoor smoking bans. California, Connecticut and Massachusetts are considering following suit. And nine other states, ranging from New York and Colorado to Tennessee and Wyoming, have lumped e-cigarettes into the tobacco product category. California also restricts e-cigarette advertising online.

Seven other states have passed measures advanced by the e-cigarette industry that defines them as something other than tobacco products. Some states have followed Alabama’s lead in labeling e-cigarettes as “alternative nicotine product.” Other states, like North Carolina, more explicitly define them as “vapor products.”

While it’s no surprise that the tobacco companies that have cornered the market on e-cigarettes are pushing bills in many states, in an odd twist of legislative strategy, the bills those companies favor impose restrictions on their own products.

Since 2009, when the first e-cigarette bills were introduced, 25 states and the District of Columbia have passed measures defining and regulating them. Those states all restrict sales of e-cigarettes to minors, and most require purchasers to provide identification for both in person and online transactions.

“This is a product intended for adult consumers. It’s marketed toward adult smokers,” said Cynthia Cabrera, executive director of the Smoke Free Alternatives Trade Association. “It’s not intended to be a gateway.”

Health advocates charge that e-cigarettes are marketed toward children, given the flavored vapors in many products.

Electronic cigarettes are becoming assets to corporate bottom lines. There are more than 200 e-cigarette companies in the U.S., according to industry analysts, but only five make up a little more than 80 percent of the market. Lorillard, the maker of the Blu line of products and the driving force behind legislation in many states, said last week that e-cigarettes accounted for $63 million in sales during the third quarter of 2013, or a little less than 4 percent of its total sales. Wells Fargo estimated the e-cigarette market stands at about $2 billion.

That market  — which the bank said will hit $10 billion by 2017 — is another driver in the push to define e-cigarettes independently of tobacco products. After all, most states tax tobacco at very high rates. New York levies a $4.35 surcharge on each pack of cigarettes, while fourteen other states charge at least $2 per pack.

Therefore, if e-cigarettes are classified as tobacco products, they will qualify for those high taxes. If they are characterized in a different category, they won’t be subject to the same taxes.

Several states that took up e-cigarette legislation have already moved to tax them in specific ways. Minnesota, which defines e-cigarettes as an “other tobacco product,” requires them to be subject to a tax equal to 95 percent of their wholesale price, making the taxes paid on an e-cigarette in Minnesota greater than the taxes on a pack of regular cigarettes, according to Darryl Jayson, an industry analyst at the Tobacco Merchants Association. Legislators in Oklahoma and Utah tried to levy a tax on e-cigarettes equal to 10 percent of cigarette taxes, but those measures failed.

“The typical rationale for tax policy in the tobacco realm is to recover the social costs of those products,” said Bryan Haynes, a lawyer who represents tobacco industry clients at Troutman Sanders in Richmond. “If anything, there should be a different category that speaks to the fact that e-cigarettes are fundamentally different from tobacco products.”

Haynes said a number of other states are expected to take up legislation dealing with e-cigarettes in 2014 — especially focusing on the tax question.

The rush to define e-cigarettes at the state level comes as the Food and Drug Administration mulls its own rules and definitions. The proposed rule, which isn’t public, has been sent to the Office of Management and Budget and the White House’s Office of Information and Regulatory Affairs for review, said Jennifer Haliski, an FDA spokeswoman.

And there’s a possibility that an adverse federal rule could create a silver lining for the industry: If e-cigarettes are defined as tobacco products by the federal government, but explicitly defined in other categories under state law, the conflict would mean states would have to pass new tax rules, or redefine e-cigarettes, before they could earn revenue off sales.

But industry insiders think the FDA rule will lump e-cigarettes in with regular tobacco products. Cabrera, of the Smoke Free Alternatives Trade Association, said her group would file a Freedom of Information Act request to see the proposed rule.

“At the federal level, the battle might be over. But at the state level, it’s not,” Criss said.

http://www.washingtonpost.com/blogs/govbeat/wp/2013/10/29/awaiting-fda-states-pursue-their-own-e-cigarette-rules/

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