New ‘cig’ on the block
MARKET DISRUPTION Both the traditional tobacco sector and the smoking cessation market are being challenged by the e-cigarette, while regulators are struggling to define this fast growing new product and develop controls, as Simon Brooke discovers
Against the background of a declining number of consumers, ever tightening regulations and a growing intolerance to cigarette smoking, the large tobacco groups are clearly unnerved by the growth in popularity of e-smoking.
The pharmaceutical industry has been hit too, as the effectiveness of its nicotine replacement therapy (NRT) products has been questioned. According to a Harvard School of Public Health study, published in January, NRT products “do not appear to be effective in helping smokers quit long-term”, although it should be said that, according to the NHS, NRT doubles the chances of quitting.
In the US, where electronic smoking is further advanced than in the UK and elsewhere in Europe, Johnson Creek Enterprises, manufacturer of Johnson Creek Original Smoke Juice and Red Oak Smoke Juice, recently reported growth of 40 per cent in the first quarter of 2011, compared with the fourth quarter of 2010.
Although the first electronic smoking products only became widely available around five years ago, already the value of the global market for e-cigarettes has been estimated at between US$100-200 million, according to Euromonitor International.
This strong growth must be set against the long-term decline in tobacco smoking. Research by Kantar Media’s TGI shows that just under 25 per cent of adults now report having smoked in the last 12 months and only 4.36 per cent could be considered to be “heavy smokers”, consuming more than 25 cigarettes or more a day.
The public is also, it seems, more tolerant of e-smoking. More than 33 per cent of people believe that electronic cigarettes should be made more widely available to smokers, according to a survey commissioned last month by the E-Lites brand.
Although 43 per cent agreed in principle that the recent introduction of electronic smoking products represented good news for smokers, some 47 per cent said they didn’t know enough about e-cigarettes to give an opinion. This suggests that there are significant opportunities to persuade consumers.
“We’re watching with interest,” says a source within one of the major cigarette companies. “This could just be a fad but, if there’s something in it, then we might well invest.”
Some large tobacco companies have already taken the view that, if you can’t beat them, you might as well join them. Recently Lorillard, the third-largest US tobacco company, acquired an electronic cigarette company called blu ecigs.
So how can e-cigarettes continue to grab market share from the big tobacco and pharmaceutical companies? Richard Coggin, a director at London creative agency ais, believes they should move away from being seen as a smoking cessation device.
“The real market for e-cigarettes is those smokers who don’t want to give up the habit, but instead want to find a healthier way to carry on doing what they’re doing,” he says. “They know their habit is bad for them. But they don’t want to give up the ritualistic or social side of it. So there’s a clear gap –a cigarette that’s feels like it’s bad for you, but without the bad stuff.” Tobacco companies take note.
The tobacco sector is one of the most controversial, tightly regulated and closely monitored areas of business in the world.
It’s hardly surprising, therefore, that the growth of electronic smoking is being so carefully watched by regulators and health campaigners. Regulators have been caught on the back foot because of the increasing popularity of e-cigarettes and the lack of solid scientific data about the impact on long-term health of this fledgling technology.
Meanwhile, regulations around conventional smoking continue to be tightened. In April tobacco displays were banned in large shops in an attempt to reduce the temptation to smoke among young people. These changes in the rules on traditional tobacco sales are putting further pressure on regulators to recognise a code for the new e-cigarette sector.
Because they don’t contain tobacco, e-cigarettes do not fall under the Tobacco Product Regulations. Neither are they classed as medical devices so cannot be regulated in the same way as other nicotine replacement products. For the Electronic Cigarette Industry Trade Association the wide variety of designs of electronic cigarettes make it impossible to regulate them as medicinal items. “But fortunately,” it says, “there is robust and appropriate regulation in the General Product Safety Regulations.”
There are already calls to tighten e-cigarette regulations. Professor John Britton, chair of the Tobacco Advisory Group of the Royal College of Physicians, has recently argued that regulating e-cigarettes as medicinal products would establish a “guaranteed standard” for consumers. Currently, electronic cigarettes are classified as general consumer products. But are they a consumer product or a smoking cessation device?
The distinction is an important one for the Medicines and Healthcare products Regulatory Authority (MHRA). “We believe that some products designed to help you beat the addiction to nicotine can fall within the definition of a medicinal product,” says a spokesperson. “We would regard any e-cigarette presented as an aid to quitting smoking as being a medicinal product. In the UK, it is illegal to sell e-cigarettes as a ‘quit smoking’ aid unless they are licensed as a medicine by the MHRA.”
However, the government’s Behavioural Insight Team, the “nudge unit” that aims to encourage people to make better choices in their behaviour, says in its Annual Update 2010-11: “Products that deliver nicotine quickly in a fine vapour instead of as harmful smoke could prove an effective substitute for ‘conventional smoking’. It will be important to get the regulatory framework for these products right, to encourage new products, which smokers can use as safer nicotine alternatives, to be made available in the UK.”
This would seem to contrast with the view of the Royal Pharmaceutical Society, which last year issued professional guidance recommending e-cigarettes should not be sold in UK pharmacies.
As the often bitter struggle between health campaigners and the tobacco libertarians reaches its end game, a new front is just opening up.
E-smoking regulations around the world vary greatly and are changing fast
The Food and Drug Administration (FDA) is concerned about variations in the design and function of e-cigarettes, and as yet it has received insufficient information from clinical studies about product safety. However, it intends to develop regulations for electronic cigarettes “in a manner consistent with its mission of protecting the public health”.
“No specific EU legislation is in place for electronic cigarettes,” according to a European Commission spokesman. The Commission is currently collecting information from member states about whether and how their national regulations cover electronic cigarettes. One third have no specific regulation in place which means that the General Product Safety Directive applies.
As you would expect in a country with some of the most relaxed drug laws in the world, in the Netherlands, the use and sale of electronic cigarettes is allowed. However, the advertising of products is forbidden while the European Union considers the issue. It is currently contributing to European Commission surveys.
According to French medical regulators, e-cigarettes are consumer goods that should be subject to general product safety regulations. However, if among other things they claim to be for smoking cessation, or the amount of nicotine in the cartridge is 10mg or above, then they can be subject to medical licencing.
One of the fastest growing economies in the world, Brazil has some of the strictest attitudes towards e-smoking. Despite its laid-back image, Brazil forbids the sale, import and advertisement of any variety of e-cigarettes. The government’s health agency is not yet satisfied, it says, about the current health and safety assessments of e-smoking.