Why Are Tobacco Companies So Positive About E-Cig Regulation?

Apr 24, 2014

Credit dikiy via Flickr, Creative Commons

Shortly after the F.D.A. announced newly proposed regulations of the exploding E-Cigarette market, Greensboro-based Lorillard released  a statement on the matter:

Lorillard applauds the Agency's initial efforts to establish a reasonable regulatory framework for the electronic cigarette category.  Lorillard has long-supported reasonable science-based regulation of electronic cigarettes such as establishing minimum age-of-purchase requirements, setting product quality and safety standards, and listing of ingredients and other relevant consumer information.

Richard Smith, Communications Manager at Reynolds American in Winston-Salem, echoed the applause for "science-based" regulations from the F.D.A.

"We believe the F.D.A. will regulate the  e-cigarette category based on sound science," Smith said.

In the past, lots of players in the e-cig market have referred to it as the "Wild West," noting that without some form of regulation, virtually anybody could be making their own vaporizers and selling them (so long as they didn't make any health claims).

In most cases, business frown upon regulation, saying it stifles innovation.

But, for Reynolds and Lorillard (the 2nd and 3rd largest tobacco companies in the U.S.), the regulations play to another strength: Their expertise in dealing with regulation.

In a market that has grown by leaps and bounds in the last 5 years into a multi-billion dollar industry (with use among teenagers doubling from 2011 to 2012), there are an estimated 200+ producers of e-cigs. And with the legacy players like Lorillard and Reynolds getting into the market, there's suggestion that they would either like to overtake those smaller competitors, or bring them into the fold.

WUNC's Catherine Brand talked with Richard Smith from Reynolds about the regulations and the company's shifting resources to the e-cig category.