Effects of E-Cigarette Regulation on the US Tobacco Industry

E-Cigarette Regulation and US Tobacco Industry

As the maker of the best selling cigarette brand in the USA, Marlboro cigarettes, namely the Altria Group has forecast, the traditional cigarette market and other smokeable tobacco products in the USA, which has been shrinking for some time now, will continue to do so and the number of smokers will keep going down at a rate of 2-3% per year. This is a result the anti smoking campaign being run by authorities, as well as the fact that many smokers decide to cut down or quit due to the associated social stigma.

In order to stop their revenues from falling dramatically within the challenging environment of a market that keeps shrinking in size, cigarette manufacturers have resorted to the short-term solution of price hikes. However, because they know that this not sustainable, their longer term strategy has focused on the development and marketing of e-cigarettes, in order to give a boost to their market share and revenues and this is why all the tobacco giants have either acquired smaller e-cigarette manufacturers or launched their own vaping products.

Sadly for them however, these expansion plans by tobacco manufacturers could be foiled due to recently proposed regulations on the use of e-cigarettes, coupled by reports on the health impacts of e-cigarettes and especially their use by teenagers.

Surveys conducted in 2014 among teenagers have revealed that the number of teens using tobacco has fallen markedly, hitting all time low levels, while there has at the same time been a huge increase in the number of middle and high school students using e-cigarettes, since over 263,000 teenagers who have never used a tobacco cigarette are reported to be using e-cigarettes.

The high levels of acceptance of e-cigarettes among teenagers in the USA is viewed as very alarming, not only because some research suggests that e-cigarettes could act as a gateway to picking up the smoking of traditional cigarettes, but mostly because the  health consequences of e-cigarette usage are still not particularly well-understood. Indeed, there are conflicting reports on this issue, some suggesting that the health concerns are not as severe as those of regular cigarettes, while others contradicting this argument and even claiming that e-cigarettes may actually contain ten times the level of cancer-causing agents present in regular cigarettes.

The growth of the e-cigarettes market would be greatly impacted by new regulations of cigarettes. Currently, in the USA, only four states implement regulation of e-cigarettes that is on par with that of traditional cigarettes. Moreover, 14 states have already banned the use of e-cigarettes in specific venues, such as state agency buildings and public educational facilities. The trend towards regulating e-cigarettes continues, since several other states are currently mulling similar regulations, a prime example being the case of New York, where the Governor has submitted a proposal to ban e-cigarettes everywhere traditional cigarettes are banned.