Will US vaping sector woes affect the UK market?

Once viewed as a healthy alternative to cigarettes and the digital future of the analogue smoking industry, vaping is facing more scrutiny and regulation than ever before.

The centre of this storm is the US, where 18 deaths and 1,080 lung injury cases have been linked to using e-cigarettes or vaping devices.

The US situation has become so grave that government agency Centers for Disease Control & Prevention (CDC) has issued fresh guidelines advising people to refrain from vaping.

Lung injury cases appear linked to the black market, with most patients reporting using THC-containing products, according to CDC, but this isn’t dispelling the clouds forming over the $19.3bn industry.

Understandably, the business most impacted in the US is Juul Labs. Its rapid growth since launching in 2015 - cornering over 70% of the US market - means the term Juul is almost a byword for vaping. Its valuation has tumbled from $45bn to $34bn in recent weeks.

Stats: US vs UK

US deaths: 18

UK deaths: 1

US health problems: 1,080

UK health problems: 200

US nicotine strength level: 50 mg/ml

UK nicotine strength level: 20mg/ml

US smokers aged 18-plus: 34.3m

UK smokers aged 18-plus: 7.1m

US vapers aged 18-plus: 9 million

UK vapers aged 18-plus: 3.2 million

On top of the health scare, the US Food & Drug Administration wrote to Juul CEO and co-founder Kevin Burns on 9 September outlining its ‘deep concern’ that Juul was failing to take responsibility for the epidemic of teenagers using its devices. The FDA says 20% of US high school students vape.

Amid mounting furore, Burns stepped down on 25 September as Juul suspended all digital, print and broadcast product ads - and pledged not to lobby against a proposed Trump administration ban on flavoured vaping products beyond tobacco and menthol.

Nevertheless, Massachusetts and San Francisco have already banned all vaping products ahead of a wider government review, while elsewhere, India, Brazil, Singapore and Thailand have also imposed vaping bans.

Yet no such crackdown appears on the horizon in the UK, despite reports emerging of illness - and indeed one death being linked to vaping.

So why is there such divergence between the UK and US over vaping? And is the vape industry here worried that the US represents a sign of things to come?

Regulatory differences

A fundamental difference between the US and UK is the level of regulation in place in the two countries. The US government has called on the FDA to undertake a review of previously unregulated vape companies. Until 2016, the FDA had no regulatory control over the sector. Companies launched before that date were free to do so without explicit FDA authorisation.

The agency has now given all vape manufacturers until May 2020 to prove their products are “appropriate for the protection of public health” and apply for retrospective authorisation. By contrast, the UK Medicines & Healthcare Products Regulatory Agency has been at the forefront of regulating vape companies since the category emerged around a decade ago.

It continues to operate the Yellow Card Scheme, encouraging vapers to report bad experiences. There are also tighter restrictions around advertising and marketing vape products and, in line with EU law, there are much tighter limits on the concentration of nicotine manufacturers are allowed.

As a result, Public Health England continues to promote vaping as a useful tool in helping smokers quit.

“We are monitoring developments in the US closely and PHE has been liaising closely with our expert advisors on respiratory health,” says a PHE spokesman. “Our advice remains that e-cigarettes are a fraction of the risk of smoking, and using one makes it much more likely you’ll quit successfully than relying on willpower alone.”

E-cigarette players in the UK are still hopeful that vaping can prevail. A spokeswoman for Blu, which is owned by Imperial Brands, says there is still ample growth opportunity in the UK vaping sector. “Recent research has shown a third of smokers have still never tried vaping, highlighting further opportunities,” she says.

Philip Morris International UK MD Peter Nixon is calling on the government to do more to reassure consumers over the safety of vaping or risk vapers reverting back to traditional tobacco products.

“Our advice remains that e-cigarettes are a fraction of the risk of smoking”

“Governments should give consumers confidence in the quality and safety of the products they use, and manufacturers develop evidence that their products are better than cigarettes for adult users and for public health,” he argues.

“It is very important that men and women who would otherwise continue to smoke have access to - and factual information about - smoke-free products that are scientifically substantiated to be better choices than cigarettes.”

As for Juul, which has made a major splash in the UK since launching in summer 2018, it seems so far that its problems in the US are not affecting its plans over here. It’s perhaps no coincidence that it has also taken a much more conservative approach to marketing, sales and ranging in the UK, from more sober names and flavour choices to a strict Challenge 25 policy for retailers and wholesalers.

“At Juul Labs, we are proud to be industry-leading in responsible practice, to ensure our products are only accessed by adult smokers looking to switch. We aim to continue to lead the category to prevent youth uptake, access and appeal,” says a spokesman.

To put vaping linked illnesses into perspective, smoking-related deaths in the UK currently stand at 25,000 per year and 450,000 in US.

But developments in the US show such figures do not guarantee the vaping industry immunity. Should pressure mount on UK government to look again, the UK sector will need to show it is part of the solution, not the problem.