As their popularity soars in convenience stores, e-cigs are becoming the target of new smoking bans and tax regulations.
By Erin Rigik, Associate Editor.
Once speculated to be a passing fad, e-cigarettes are increasing in sales and popularity and pushing their way toward becoming a mainstream product. Celebrities from Leonardo DiCaprio to Britney Spears have been spotted “vaping,” attracting further public attention to the e-cig trend. As the trend takes hold, government regulators at both the local and federal levels are lying in the weeds waiting to pounce on the good times.
The market for e-cigarettes is expected to quadruple between now and mid-2014, according to Thomas Kiklas, co-founder of the Tobacco Vapor Electronic Cigarette Association. “In 2010 there were 750,000 units sold and that jumped to 2.5 million units sold in 2011. In the U.S., close to 20 million cartridges and about 10 million disposables are sold on a weekly basis.”
A survey by the Centers for Disease Control and Prevention indicated 2.7% of U.S. adults had tried e-cigarettes by 2010, up from 0.6% a year earlier. Annual sales of e-cigarettes in the U.S. have grown to between $250 million and $500 million since arriving from China five years ago, according to a Wall Street Journal report.
If e-cigs aren’t lighting up across bars and restaurants near you, it could have to do with your location—but rest assured they’re on the way. Research shows the product appears to be catching on fastest in the South, with 33% of e-cigarette users living in Southern states compared to 19% of e-cigarette users living in Northeast states, according to ECH Research in conjunction with Opinionnaire, June 2011.
There is even a World Vaping Day—March 22—to celebrate the success of the electronic cigarette, and to encourage new smokers who can’t or don’t want to quit smoking to switch to e-cigs.
C-Stores Finding Room
As the product grows toward the mainstream, c-stores are getting in on the action.
Nice N Easy Grocery Shoppes in Canastota, N.Y. began offering e-cigs when they were first introduced. “These were the $60 kits and, frankly, they did not do very well,” said Matthew Paduano, vice president of category management at Nice N Easy. “Over the past several years we have brought in some of the less expensive kits as well as the disposables.”
Nice N Easy now stocks the NJOY brand, which is carried by its wholesaler. “I am worried about some of the other brands out in the market because I don’t know where they are made, and because of concern over what happens if one of those injures a customer in any way,” Paduano said, adding that he looks to his wholesaler to supply reputable brands that he can trust.
Demand for e-cigs in Nice N Easy’s markets is growing slowly, but consistently. “I think these items are still foreign to many customers even though there has been press and media around them. There is no clear No. 1 brand out there in our market right now, but there are a lot of choices,” Paduano said. “I expect that as the cost comes down further, more customers will try them. This is a niche item that will gain acceptance slowly, but will not be replacing real tobacco any time in the foreseeable future.”
Couche-Tard became the first Canadian c-store chain to push electronic tobacco when it rolled out the blu e-cigarette brand, which it now offers in more than 500 stores in Quebec. It plans to roll out the tobacco line to its other stores across Canada later in 2012. Couche-Tard is selling blu’s zero-nicotine disposable e-cigarettes—a budget-friendly alternative to traditional cigarettes, with one disposable equaling approximately 20-30 cigarettes.
In the U.S., Couche-Tard’s Circle K Stores Inc. is offering FIN e-cigarettes in each of the chain’s eight regions. In addition to carrying the disposable FIN e-cigarettes, which are equivalent to more than two packs of traditional cigarettes, Circle K stores are also offering rechargeable FIN accessories.
Because e-cigarettes deliver nicotine without the tar and 5,300 other chemicals and carcinogens found in regular cigarettes, they are often reported to be safer. The American Association of Public Health Physicians (AAPHP) has defended the product.
“If we get all tobacco smokers to switch from regular cigarettes to electronic cigarettes, we would eventually reduce the U.S. death toll from more than 400,000 a year to less than 4,000, maybe as low as 400,” said Joel L. Nitzkin, chairman of the AAPHP’s Tobacco Control Task Force. “AAPHP favors a permissive approach to e-cigarettes because the possibility exists to save the lives of four million of the eight million current adult American smokers who will otherwise die of a tobacco-related illness over the next 20 years.”
Nitzkin also noted that cigarette smokers could reduce their risk of future tobacco-related death by 99.9% or better by switching to a nicotine-only delivery product like e-cigarettes.
While c-store retailers report it’s too soon to determine if smokers are gravitating toward e-cigs for health reasons, ECH Research in conjunction with Opinionnaire found in its June 2011 survey of 200 respondents from 70,000 households that 62% of e-cigarette smokers reported they have stopped smoking traditional cigarettes or smoke fewer cigarettes since starting e-cigarettes.
Barriers to Success
As with other forms of cigarettes, anti-smoking groups are arguing that flavored e-cigarettes could attract teens that could use the device as a gateway into cigarette smoking. As a result, state lawmakers are cracking down on the devices with proposals that would ban everything from the purchase of the devices to vaping in public. Among the measures that have been recently proposed include:
Hawaii. Lawmakers in Hawaii had debated e-cigarette bill, SB2233, which aimed to limit sales of e-cigs to minors and to tax e-cigs at the same price as traditional cigarettes (70%). But after receiving more than 1,000 written submissions, many from e-cigarette users opposing the measure, the Hawaii Senate Ways and Means Committee voted to delete language that would require the 70% tax before passing the bill. Meanwhile the main portion of the bill, restricting sales of e-cigarettes to minors, remains intact.
Vermont. Vermont State Rep. Bill Frank introduced a bill that would ban the sale of e-cigarettes to those under 18 years of age and ban the purchase, sales and delivery of e-cigarettes via the Internet, phone and mail order, with penalties for each violation of up to five years imprisonment, a $5,000 criminal fine and a $5,000 civil fine. In March, however, the Vermont Human Services Committee announced they would be removing the section of H. 747 that would have banned sales of e-cigarettes through the Internet, phone and mail order.
Utah. A bill has been passed by the Utah state legislature, which adds the use of electronic cigarettes to the definition of smoking in the Utah Clean Indoor Air Act, which before had banned only “igniting tobacco.” The bill exempts e-cigarette shops from the ban for five years. After passing the House and Senate, it has gone to Utah Gov. Gary Herbert who is expected to sign it into law.
New Jersey. Like cities Seattle and Boston, New Jersey already has banned e-cigarette smoking in public and is also considering a law that would ban smoking and the use of e-cigarettes in cars if children 16 or under are present. A violation would carry a $100 fine.
Alabama. The Alabama Smoke-free Air Amendment of 2012 would ban the use of e-cigarettes in any public place where smoking is prohibited.
Wisconsin. A bill seeks to specify the term “smoking” in an effort to exempt electronic cigarettes from the state’s indoor smoking ban. The bill’s sponsor, Sen. Glenn Grothman, is currently seeking co-sponsorship. There is an identical bill that was introduced in the Wisconsin House. Groups such as the American Lung Association are contacting legislators in opposition of the bill.