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Imperial Brands, Juul to limit e-cigarette sales ahead of expected FDA action

Juul Labs Inc. and Imperial Brands PLC plan to restrict online sales of e-cigarette flavors in response to an ongoing crackdown by the U.S. Food Drug and Administration aimed at reducing illegal use by minors, the companies announced Nov. 13.

The moves come ahead of an expected FDA announcement this week possibly banning online e-cigarette sales and restricting physical sales to vape and tobacco shops. The agency in September ordered Juul, Imperial Brands, Altria Group Inc., British American Tobacco PLC and Japan Tobacco Inc. to tell it by mid-November how they intended to address illegal use of their products to teens.

An FDA spokesman would not confirm the timing of the agency's expected announcement to S&P Global Market Intelligence.

The San Francisco-based Juul stopped accepting orders Nov. 13 from retailers for its fruit and creme-flavored e-cigarette pods and will instead only sell them to adults ages 21 and over on its website, Juul CEO Kevin Burns said in a statement. The pods contain nicotine salts that are heated by a Juul device to produce flavored vapor.

Retailers can still order tobacco, mint and menthol-flavored pods from Juul, a privately owned startup that leads the U.S. e-cigarette industry in retail sales.

Juul is also adding age-verification to its website, requiring users to submit name, date of birth, permanent address and the last four digits of their social security number. The information will be verified by a third-party, Burns said.

"We don't want anyone who doesn't smoke or already use nicotine, to use Juul products. We certainly don't want youth using the product. It is bad for public health, and it is bad for our mission," Burns said.

The company will also shut down some of its social media feeds and limit activity on others, though Burns noted that "more than 99%" of social media content about Juul is generated by third parties.

The U.K.-based Imperial Brands, through its subsidiary Fontem Ventures, also will raise the age limit for online e-cigarette sales to 21, require online retailers that sell its products to implement age-verification technology, review packaging and descriptions for its flavors and explore connected e-cigarette devices that could include child locks or other limits based on a device's location, Fontem Ventures Communications Manager James Campbell said in an email to S&P Global Market Intelligence.

Fontem's blu e-cigarette devices heat a nicotine-infused liquid and come in fruit, mint and tobacco flavors, among others. The company will continue to sell flavored pods to adults 21 and older, Campbell said.

"We will also institute a company-funded hotline where consumers can report underage sales of blu products, terminate immediately contracts with retailers found to sell to minors and appoint a youth access prevention officer to closely monitor violations across all media," Campbell said.

The actions follow Altria's announcement Oct. 25 that it will pull MarkTen Elite and Apex by MarkTen pod-based products from retail shelves until the FDA signs off on their sales. About 80% of the company's e-cigarette volume in the third quarter will remain on the market, and Altria executives said they expect little impact to revenue from the move.

Japan Tobacco and British American Tobacco have yet to publicly announce plans in response to the FDA's order.