$2-Billion E-Cigarette Industry Unleashes Lobbying Blitz to Limit Taxes and Regulation
The Food and Drug Administration (FDA) plans to begin regulating e-cigarettes this month, and state and local governments may not be far behind in deciding how to tax or limit the use of this new nicotine-delivery technology. Manufacturers of e-cigarettes, however, aren’t in support of their products being regulated, and are trying to minimize the government’s interference in the industry.
The battle over regulating e-cigarettes is similar to the historical fight between the U.S. government and tobacco products, with many companies that made traditional smoking products now jumping into the e-cig business.
Those who made Marlboro, Newport and Camel realize e-cigarettes present tremendous profit potential, given that the fledgling industry is already approaching $2 billion in annual sales.
In fact, e-cigarette sales are projected to surpass that of traditional cigarettes within the next 10 years.
The industry claims the new version of smoking is much safer and less harmful than cigarettes that burn tobacco and other chemicals. So why should the FDA get involved, business leaders ask?
FDA officials say they need to start regulating e-cigarettes because it’s too early to know just how this new product might impact human health. They also express concern over statistics showing the rising popularity of e-cigarettes among teenagers.
Both sides, along with members of Congress, have been meeting at the FDA’s Center for Tobacco Products in Rockville, Maryland, to discuss the future of government regulation over the industry.
“The biggest e-cig manufacturers are OK with” a certain level of taxation, “as well as tighter regulation,” wrote Forbes’ Daniel Fisher. “Increased regulation of e-cigs may help reduce competition from unruly competitors selling their products on the Internet,” which is something the top e-cigarette companies desire.
Yet, if that is true, why are the industry heavyweights on the move, spending large sums of money and engaging people of influence to lobby against regulation and taxation?
Indeed, e-cigarette representatives have been fanning out across the country to convince local and state officials to avoid taxing their product or limiting where people can use them. And since the level of regulation will be the FDA’s decision, Washington has been a special focus of attention.
Lorillard Tobacco, which manufactures Newport cigarettes, spent $2.35 million last year (and more than that this year) lobbying on behalf of its blu eCigs brand, which it purchased in April for $135 million. The firm’s lobbying team includes former House speaker J. Dennis Hastert and several other former members of Congress.
Lobbyists working on behalf of e-cigarette-maker NJOY include former House Appropriations Committee aides Jeff Shockey and John Scofield, and a former top adviser to House Majority Leader Eric Cantor (R-Virginia).
“Our current approach is to make a few friends in Congress, educate them on a product they’re probably not too familiar with, lay out the industry’s best practices and relay some concerns about potential regulatory hurdles,” Scofield told The Washington Post.
The targets of e-cigarette companies’ lobbying efforts are lawmakers who sit on committees with jurisdiction over the FDA.
-Noel Brinkerhoff, Danny Biederman
To Learn More:
E-Cigarette Makers Lobbying Hard to Shape Rules for Fast-Growing Industry (by Holly Yeager and Brady Dennis, Washington Post)
Will Taxes And Regulation Rein In The Booming E-Cigarette Market? (by Daniel Fisher, Forbes)
E-Cigarettes May be Less Harmful, but Also Lure More Kids into Smoking (by Noel Brinkerhoff, AllGov)
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