| Section | Link to Section |
|---|---|
| Altria Supports The PMTA | Altria Supports The PMTA Registration |
| The FDA does its share to preserve smoke | The FDA does its share to preserve smoke |
According to a report published last week by Barclays Research—the international bank's investment research arm—U.S. tobacco giant Altria Group would fall short of its fiscal year 2024 earnings predictions unless plummeting cigarette sales are revived by a crackdown on disposable vapes.
Barclays expects Altria's cigarette shipment volumes to fall by 10% in fiscal year 2024, as well as a 2% drop in EBIT.
"It is feasible," argues Barclays, "that US cigarette volumes will improve if the FDA/DOJ successfully curb disposable e-cigarette growth. If this occurs, US cigarette volumes would rise, and Altria will be able to fulfill its [earnings per share] target of $5.00 to $5.15."
The FDA has not approved the sale of contemporary disposable vapes, which have gained popularity in recent years and compete directly with cigarettes in convenience shops and petrol stations.
Altria Supports The PMTA Registration
Barclays' findings explain Altria's support for state measures that would establish so-called PMTA registries (or directories) and prohibit the sale of vaping devices that have not been approved by the FDA or have premarket tobacco applications (PMTAs) that are currently being reviewed by the agency. Some of the laws also permit the sale of items that have been rejected by the FDA but remain on the market owing to federal court orders (such as R.J. Reynolds' Vuse menthol refills).
Since January, state legislatures have introduced more than two dozen PMTA registry measures. The Consumer Advocates for Smoke-free Alternatives Association (CASAA) has issued calls to action for 21 registry initiatives, suggesting that they are gathering support among legislators or that hearings have been planned. New legislation is proposed virtually every day.
According to Gregory Conley, legislative and external relations director for the American Vapor Manufacturers Association (AVM), Altria officials have spoken in support of registry laws during legislative hearings in many states.
The proposals aim to reduce sales of popular disposable vapes and bottled e-liquid, which compete with Altria's combustible cigarettes, including the Marlboro brand. Disposable vapes compete with Altria's NJOY e-cigarettes, although NJOY is a minor participant in the vape business (and Altria's profits forecast). (R.J. Reynolds, the producer of Vuse, Newport, and Camel cigarettes, favors PMTA registration regulations.)
Alabama, Louisiana, and Oklahoma have previously approved registration laws and are presently maintaining registers of items for sale. This year, lawmakers in Alabama and Oklahoma submitted proposals to strengthen police enforcement.
Both Altria and R.J. Reynolds have taken legal steps to eliminate the vape competitors. Last October, Altria subsidiary NJOY filed a federal district court lawsuit against hundreds of disposable vape makers, distributors, and retailers, including the Breeze, Elf Bar, Esco Bar, Flum, Juice Box, Lava Plus, Loon, Lost Mary, Mr. Fog, and Puff Bar brands. NJOY requested that the court block the firms' importation and stated that it would "consider further litigation activity." (In January, the court dismissed the majority of the claim.)
The FDA does its share to preserve smoke
For years, the FDA Center for Tobacco Products (CTP) has waged a whack-a-mole fight with independent vaping companies, the majority of which produce and sell e-liquid and disposable vaping devices.
The government has issued hundreds of warning letters, directing makers and merchants to withdraw items from the US market, and has followed up by pursuing high-dollar "civil money penalties" (fines) against repeat violators. In certain cases, the FDA has sought assistance from the Department of Justice to close minor vape shops.
The FDA has confiscated products at airports and directed import inspectors to delay shipments of Elf Bar and Esco Bar disposables without first checking them.
The FDA has approved just seven vape devices, all of which are made by firms controlled by Altria (NJOY), Reynolds (Vuse), or Japan Tobacco (Logic). The FDA has not approved the marketing of any open-system (refillable) items, including bottled e-liquid, or any vape product with a non-tobacco taste.
