Many leading US ecigarette producers are moving their ecigarette production from China to the US as a response to the increasing concerns over product quality as well as in view of the deeming tighter ecigarette regulations.
White Cloud And Mistic
In the past weeks, some top selling ecig companies including White Cloud and Mistic, have announced that their ecigarette production will be moved to their latest and highly automated factories in the US. This way, they could track the ingredients used in their products more closely and ensure that their products adhere to their specifically set standards. The costs, the companies estimated, would even be lower compared to manufacturing the products in China.
Bonnie Herzog is an experienced tobacco analyst from Wells Fargo Securities. She said that people are now growing more and more concerned about product quality. She is also expecting that more companies will shift their ecigarette manufacturing to the US.
Herzog explains that different brands have varying qualities. She believes that regulations will set a standard for these products and will force some to enforce improvements.
Eversince the FDA released its proposed ecig rules; the shift has already gained momentum. Manufacturers who wish to access the US market should register their products to the agency and submit their complete list of ingredients.
Attorney Bryan Haynes of Troutman Sanders law firm in Richmond, Virginia said that as a general rule, the FDA policies will require additional control over the ecigarette’s manufacturing process. Troutman Sanders is a law firm representing ecig companies.
Haynes remarked that more companies are already planning to move production to the US so that compliance would be made easier.
Many electronic cigarette companies already produce their eliquids in the US. They ship it to China where the devices are assembled. Most ecig batteries still come from China.
Big Tobacco Involvement
A crucial business is how the three major tobacco companies consider electronic cigarettes. These Big Tobacco companies either purchased or developed their own ecigarette brands. They hope that this will help offset whatever losses they have been enduring from the decreasing cigarette sales. They also prioritize compliance with the regulations.
Of the three giant tobacco firms, only Reynolds American produces the Vuse electronic cigarettes in the US in its Kansas factory. Right now, Vuse is sold in Colorado and Utah. In June, it is said that company is up and ready for its national roll out for Vuse. Blu Ecigs by Lorillard is made in China, but they contain smoke juice made in the USA.
It has been featured in the news that the two tobacco firms are actively making discussions regarding a possible tie-up. Reynolds is said to be buying Lorillard and thus, Blu Cigs, the most dominant ecig brand in the convenience store channel would possibly be acquired by Reynolds.
MarkTen from Altria contains eliquid made in Richmond, Virginia. Like Blu Cigs, the hardware is also made in China. Like Reynolds, Altria is also set on nationally rolling out MarkTen this summer.
Other companies also follow this trend of mixing eliquids locally while devices are made and assembled in China. One of them is NJOY. Chief Executive Craig Weiss stated that they adhere to their own gold standard for quality control practices and tests.
Sales of ecigarette kits in the US are expected as well to continue growing that by 2020, they will outpace tobacco cigarette sales. This popularity is brought upon by the perception that ecigs are safer than cigarettes.
Advocates claim that electronic cigarettes are safer to use than conventional cigarettes because they do not produce tar that destroys the lungs. Data on ecigarette safety, however, are limited according to the critics.