A long-time magnet for governmental regulation and unyielding taxes, tobacco remains a vital category for convenience retailers. Under a new administration, should retailers expect any lessening of federal controls of tobacco products such as e-cigarettes?
By CSD Staff
Tobacco products have been a darling of sin taxes and anti-smoking advocates for decades. Despite tobacco manufacturers’ lobbying efforts in city halls and state capitols, the industry has been rebuffed at many turns.
For instance, in the state of California—which many states tend to follow when it come tobacco regulation—Gov. Jerry Brown last summer signed sweeping tobacco control bills that will raise the smoking age in California from 18 to 21 and treats electronic cigarettes as tobacco products.
Such rulings and laws have greatly impacted the c-store industry. In fact, the last segment mentioned above—e-cigarettes—faces a long up-hill battle due to the FDA’s deeming regulations, which among other mandates, bans the sale of deemed products to anyone under 18. This covers electronic nicotine delivery systems (ENDS), also called e-cigarettes, personal vaporizers and vape pens.
The FDA’s deeming regulations also call for any vaping products created after Feb. 15, 2007 to be subjected to extensive testing before companies can sell them to consumers. Because the FDA considers virtually any change in a product to constitute a new product, this means that the deeming regulations will essentially freeze the vaping market. Not only will ENDS manufacturers not be able to introduce new products, but they will also be unable to make changes in existing products without approval.
This results in nearly 99% of all current products on the market falling under this new regulation.
That’s where the administration of President-elect Donald Trump and the Cole-Bishop Amendment come into play, said Don Burke, senior vice president with Management Science Associates Inc., a diversified information management company. The Cole-Bishop Amendment would move this predicate date forward nine years, allowing for products that have been created through Aug. 8, 2016, to be grandfathered.
Though it’s all speculative until formal action is taken by the new administration, Burke said, early clues from the administration could be construed as positive signs for retailers.
“It’s encouraging. I think with the results of the election and the orientation of less regulation on the part of Trump and Pence; more likely the Cole-Bishop Amendment going through Congress is more likely to pass. And, that would be a better opportunity for vape,” said Burke.
At the time of writing this article, President-elect Trump had not selected the finalist to head the FDA. Bloomberg News reported that President-elect Donald Trump could nominate Jim O’Neill, a Silicon Valley investor. O’ Neill previously has commented publicly about overhauling the agency.
Other comments to which convenience retailers may be paying attention are attributed to Vice President-elect Mike Pence, who has condemned the feds’ staunch concern with safeguarding against public health issues like tobacco use.
Mary Szarmach, vice president of trade marketing and government relations for Smoker Friendly International LLC, is the immediate past president of the National Association of Tobacco Outlets (NATO). She said while Pence’s comments must be taken in context, it is revealing for retailers that have been stricken by the overabundance of tobacco legislation.
“I have read that he has questioned secondhand smoke studies and vaping studies, basically aligning himself with the group that believes there is junk science and inaccurate numbers in these studies,” said Szarmach. “He has always been against government regulation, and seems to stand with our industry on that. I think he will be an ally for us, fighting against additional taxation, and working on the FDA Center for Tobacco Products—holding them accountable and policing their arbitrary decisions.”
In the end, responsible actions regarding tobacco will still rest prominently with retailers.
“I think if we continue to do good work keeping tobacco out of the hands of youth, this administration will probably let us do business as usual, I hope,” said Szarmach.
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