A surge of illegal vaping products originating from China is negatively impacting the sales of legal alternatives to cigarettes in the U.S., according to the CEO of British American Tobacco.
Tadeu Marroco advocated for stricter penalties for individuals importing unauthorized vapes into the U.S. “What we are seeing with the lack of enforcement is a reduction of the legal market of vapor,” the CEO said.
BAT is one of the tobacco producers waiting for the U.S. Food and Drug Administration’s long-delayed completion of its review of marketing applications for vaping products. BAT is a major player in the vaping industry worldwide and in the U.S. with its Vuse brand.
The delay is leading manufacturers of illicit products to take advantage of the uncertainty by continuing to sell them, Marroco said. The FDA needs to “decide publicly what are the products that are allowed to stay in the market and the products that need to be taken out of the market,” he added, according to Bloomberg.
The FDA and the U.S. Department of Justice have formed a federal task force spanning multiple agencies to stop the distribution of illegal e-cigarettes. As of early June, the FDA had issued 1,100 warning letters to makers, importers and distributors of unauthorized new tobacco products, including e-cigarettes, and fined more than 55 manufacturers and 140 retailers.
BAT has launched two claims with the International Trade Commission, one related to patent infringement and another about the importation and marketing practices of illegal vapes.
The company reported first-half results earlier Thursday, in which it said it’s unlikely to hit a £5 billion ($6.4 billion) revenue target in 2025 for vapes, heated tobacco and nicotine pouches, blaming the lack of a U.S. clampdown on illicit products.