AMERICA’S FLOURISHING e-cigarette industry is braced. Scott Gottlieb, head of the Food and Drug Administration (FDA), a regulatory agency, has made it clear that he holds the sector responsible for an “epidemic” of youthful vaping. Manufacturers, he tweeted not long ago, have no idea how much they sell to teenagers: “We’re finding out for them.” As The Economist went to press, the FDA was expected to announce restrictions on the sale of vaping products in an effort to combat under-age use.
One company in particular is in its cross-hairs: Juul, based in San Francisco. FDA staff even turned up unannounced at its headquarters in September and carted off more than 1,000 pages of documents on the firm’s sales and marketing practices. Its growth has been spectacular. Sales increased from 2.2m devices in 2016 to 16.2m last year. It has captured the largest share of America’s e-cigarette market—around 75%—and in its last round of fundraising was valued at $15bn. Its sleek products are popular with teenagers: youngsters often pose with them on social media.
Juul this week tried to get ahead of a crackdown. Its chief executive, Kevin Burns, on November 13th admitted that under-age use had become a serious problem for the company. He said it would pull its flavoured nicotine liquids off shop shelves and restrict its own use of social media in America. Juul still plans to sell its flavours online, but with age restrictions. It also wants to continue to offer menthol flavour in shops. It remains to be seen whether the FDA will judge these actions to be sufficient. The agency could ban Juul from selling any fruit flavours, even online.
The risks to Juul, and to its peers such as Vuse, MarkTen, blu e-cigs and Logic, of much more stringent rules go beyond the hit from selling fewer products to minors in America. The FDA is watched around the world. A severe crackdown may serve as a warning to other countries of the potential for misuse of their devices by the young, and as an encouragement to follow suit. That could spell trouble for Juul’s expansion plans. It opened offices in London in July, and wants outposts in France, Israel and Singapore. Israel has already said it is not welcome because the high levels of nicotine in its e-cigarettes pose a “grave danger to public health” (an odd decision for any country that allows the sales of conventional tobacco cigarettes).
Flavours are also an appealing part of the product for adult smokers as well as adolescent ones—it is not only under-age consumers who enjoy the taste of mango or fruit vape fluid. A study published earlier this year in a scientific journal, Harm Reduction, concluded that restricting access to e-cigarette flavours might discourage adult smokers from attempting to switch to vaping products.
That puts regulators in a difficult spot. On the one hand, innovation in e-cigarettes has created a product that is good enough to wean smokers from far more toxic products. But an e-cigarette can also be used to hook an entirely new generation of consumers on nicotine. Juul is not the only one with hard choices to make.