business news in context, analysis with attitude

MNB took note the other day of a New York Times report about how the US Food and Drug Administration (FDA) said that “teenage use of electronic cigarettes has reached ‘an epidemic proportion,’ and it put makers of the most popular devices on notice that they have just 60 days to prove they can keep their devices away from minors.” If they don’t comply, the FDA said, these products could be pulled from the marketplace.

Companies like Juul, as well as tobacco companies that see e-cigarettes as a sales opportunity in a declining tobacco market, have promised cooperation.

I commented, in part:

These manufacturers, as far as I am concerned, have no credibility, and believing that they will give this subject anything more than lip service - and maybe, if they have to, some token move to demonstrate minimal cooperation with regulators - is foolish.

We’re going to trust tobacco companies - which historically have proven that they only thing they do better than manufacture poisonous, addictive products is lie to legislators, regulators and customers - to cut off young customers who they hope will buy their products for the rest of their lives? I don’t think so. We’re going to trust the manufacturer of mango e-tobacco products when they say they are committed to keeping their products out of the hands and lungs of young people? Nope.

This is all a crock. And retailers should be careful about doing business in this segment, which is populated by the craven and the mercenary.

I’ve always been upfront about my opinion of these people. I hate them. I cannot imagine that there are adults working at these companies who would want their children using their products. And I believe that a special circle of hell is reserved for them.

One MNB reader had a different perspective:

I totally understand your position on big tobacco, and most people feel the same way.  Would recommend looking a little deeper on this story though.  Big tobacco would benefit from the elimination of flavors with the vape industry.  In fact their stock had their highest one day growth in 3 years yesterday after this announcement was delivered.  What does that tell you?  Even though they have vape products themselves it represents less than 2% of their profits compared to combustible  cigarettes.  They would gladly sacrifice their vape brands in favor of taking down the company that is disrupting their world, JUUL.  

JUUL is only a vape company with a mission to convert combustible smokers to a better alternative.  You like to talk about companies that disrupt older incumbent companies in categories, and that is happening here.  JUUL is now larger than Winston, American Spirit, L&M, and about to pass Pall Mall in total US sales.  That is not completed by primary teen use.  That terrifies big tobacco.  By restricting flavors as a way for adult smokers to have an alternative you are helping big tobacco.  Do adults not like flavor alternatives?  Have we not proven that we support larger assortment choices in multiple categories? 

Totally support initiatives to keep these products out of teens hands, but vape usage is no larger than alcohol by teenagers.  A heavy majority of vape use is done by someone who has smoked combustible cigarettes and it has a 35% quit rate after first use.  It also greatly reduces cigarette use by those who try and do consume both.  This is coming from a 10 year smoker who quit after starting to vape, and it was not tobacco or mint flavors that helped me.  I needed something as far away on that cigarette reminder to keep me off.  It was multiple types of flavors, and today 2 year without cigarette and down to a zero nicotine juice that I vape.  

Not saying that vape is 100% healthy, but both Canadian and UK health ministries have come out saying it is healthier than combustible cigarettes. Think about those countries have a major horse in the race too as they are public health care systems, so to convert smokers to vape will help their overall health care costs in long run.  Something very different than our FDA.

I am just saying this is not a black and white situation, and it is one where understanding and education is lacking.  Totally agree to stop the vape flavors that call out candy brands, energy drinks, or look like kid products.  That is not the case with all companies out here.  Many do produce mint, fruit, or mango as a flavor, but that is no different than flavored alcohol beverages or highly caffeinated drinks.  Research the energy drink Bang with 300mg of caffeine (almost double Monster) infused with creatine (same stuff that baseball was plagued with) and their flavors like Cotton Candy.  Any 12 year old can walk into a c-store tomorrow and purchase this without issue.  How many teens are on two Starbucks a day?  

The FDA needs to look to their neighbors to the North on Canada’s guidelines on flavors.  It somewhat amazes me that we have less scrutiny with an industry blowing up using gummies, cookies, and brownies as main growth drivers in cannabis as states legalize left and right but are restricting another due its stimulant (nicotine) being tied to a horrible past with big tobacco.  

I am a parent myself, and I of course want to keep my children safe, and I would not want them vaping at this point in their lives.  I also don’t want them drinking or using cannabis.  I am pushing them not to drink energy drinks or even Starbucks to be honest.  But they will come to an age where that could happen, and when it is legal for them to do so.  I have to respect that choice at that time, but I am not calling for the ban of major portions of these industries that adults use every day.  Where is the FDA on Monster and Red Bull and their long term effects?  

Just asking people look at the bigger picture on this one.  Something seems very odd when big tobacco gains from an action by the FDA like this.

Your point about big tobacco wanting to inhibit companies like Juul is well taken.

As far as I’m concerned, though, I can only hope for a plague on all their houses. And I see no moral equivalence between tobacco companies and Starbucks.

From another reader, on the same subject:

Recently we found out our 15 yr old son had purchased a vaporizer from a friend and had been joining his friends in learning new tricks, such as smoke rings.  There are videos all over the place depicting this, romancing the idea of vaping.  Nothing wrong with it right? They are using liquid without nicotine, but I know that is the next step.  Now I smoked as a teen and am not naïve but this is hard to combat as a parent since it’s the “safe” alternative.  I’d lump marijuana in the same category of struggle.  The pot of today is not “80s pot” as my son says and with it becoming legal across the country, it’s seen as ok, not bad like cigarettes, hasn’t killed anyone and you don’t get lung cancer. 

Awesome, because I needed more things to be concerned about as a parent.  I apologize to my mother almost weekly, it’s a tough job.

Regarding the shortage of truckers, which is creating enormous problems, MNB reader Gary Loehr wrote:

This seems like a tailor made opportunity for unemployed veterans.  Truckers make a living wage and most veterans could be trained in a matter of a few months.  It would seem that Walmart and the Vets Administration could get together and find a win-win here.

One MNB reader had a thought about Jeff Bezos’ $2 billion commitment to philanthropy:

I appreciate what Jeff Bezos is doing for children's education and homeless.  Just maybe Jeff was not opposed to the Seattle homeless project but instead opposed to the government running the project.  I think we need to more individuals and business to take on and offer solution and money to fix our problems instead of asking our government to fix them for us.  In most cases the results are better and longer lasting for a lot less money.

We recounted a Wall Street Journal story the other day about how United Parcel Service (UPS) plans to address the problem of “lower-margin packages it carries for large shippers like Amazon.” It is going to cater more to small business, and the health care segment “because small and midsize businesses may not have the bargaining power in achieving lower rates that large shippers get, while companies shipping medicine and health products have more time-sensitive commitments that cost more.”

Prompting MNB reader Tim Heyman to write:

So basically UPS is screwing the little guy, to subsidize Amazon and other large companies…..Nice they let everyone know!
KC's View: