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Industry Watch: E-Cigarettes on the Rise

What does the industry have up its sleeve? 
Counter Tobacco brings you exclusive updates on industry developments that effect the point-of-sale. Visit
CounterTobacco.org for more.
E-Cigarette Display; photo credit Kathryn Stein
Industry expects E-cigs to 'grow exponentially' in the next year
E-Cigarettes have been dominating the industry news lately.
A product once viewed as a fad is now projected to develop into a $1 billion category within the year. This product category is catapulting into retail stores with the proliferation of new brands and marketing tactics coupled with the current lack of regulatory action. Take a look below for more about the rise of e-cigarettes.  
E-cig prices drop, but profit margins stay high
While many cigarette prices are set to rise, retailers are seeing a drop in e-cig prices.  Industry analysts indicate that these lower prices along with the 'terrific eye-appeal' of new packaging (that mimics the packaging of traditional cigarettes) are helping the category grow. According to Wells Fargo, retail sales of e-cigarettes produced about $300 million in 2012 and strong growth is projected for 2013. Cheap and profitable-- seems like a story we've seen before...
New product, same old marketing
Big brands and new-comers alike are rolling out e-cigarette options. Lorillard was the first of the big three to introduce their product, Blu. Now R.J. Reynolds and Altria have followed suit along with a plethora of other manufacturers. Looking for ways to distinguish themselves, companies are using many of the same marketing tricks the tobacco industry relied on before the Master Settlement Agreement. For example, e-Swisher and blu eCigs are both sponsoring racing cars.  
Have you seen E-Cigarettes in your community? Share your story with us! Upload a photo to the Counter Tobacco Gallery.
Research and Regulation
 
A study published earlier this year by the CDC found that, in 2011, about 1 in five adult cigarette smokers in the U.S. had tried an e-cigarette, a 10% increase from 2010. Despite this rapid increase in use, much remains unknown about the long-term health impacts of e-cigarette use and how these products might effect traditional cigarette use, particularly among youth. 

Tim McAfee, director of the Office on Smoking and Health at the CDC noted that, “If large numbers of adult smokers become users of both traditional cigarettes and e-cigarettes — rather than using e-cigarettes to quit cigarettes completely — the net public health effect could be quite negative.”

Major concerns also exist around the lack of regulation.  Though the FDA indicated that they would regulate e-cigarettes as tobacco products in April 2011,  to date no regulation has been enacted at the Federal Level. Some states and localities have tired to fill this gap with a variety of regulatory options.  

More research is needed to inform the public and regulators to ensure that e-cigarettes do not open a door to negative public health consequences.  

Visit Counter Tobacco for more information and to find policy solutions and tools to counteract retail tobacco product sales and marketing.
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