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Read the House Oversight Committee’s letters calling on top e-cigarette brands to stop advertising their products

Read the House Oversight Committee’s letters calling on top e-cigarette brands to stop advertising their products

The US House of Representatives continued its crackdown on e-cigarette brands and their advertising efforts this week.

On Wednesday, Rep. Raja Krishnamoorthi of Illinois, who is the Chairman of the Subcommittee on Economic and Consumer Policy, sent letters to four major e-cigarette producers, including Njoy and Fontem Ventures, as well as tobacco giants Reynolds American and Japan Tobacco International.

Rep. Krishnamoorthi noted this week's decision by Juul Labs to suspend all US print, broadcast, and digital advertising for its e-cigarette products and added, "I am writing today to respectfully, but strongly, request your company to do the same." (The letters are embedded in full at the bottom of this story.)

Read more: E-cigarette company Juul raised billions to pursue global domination, but a rash of challenges is raising questions about its strategy

Altria, which owns Marlboro maker Philip Morris, acquired a 35% stake in Juul late last year for $12.8 billion in an apparent attempt to counter declining numbers of smokers in the US and beyond. Since then, the latter company has faced a variety of inquiries, many of which focus on its marketing efforts.

Advertising holding company Omnicom and its agency DDB Worldwide won Juul's US marketing business in a 2018 review. Spokespeople for both companies declined to comment, and it is unclear how the Juul news will affect the relationship between these parties.

Subcommittee Chairman ties e-cigarette 'epidemic' to unapproved claims made in advertising campaigns

Juul confirmed on Wednesday that its CEO Kevin Burns had stepped down and that he would be immediately succeeded by KC Crosthwaite, an executive at tobacco conglomerate Altria. That news came one day after The Wall Street Journal reported that federal prosecutors in California had launched a criminal investigation into Juul.

"As Chair of the Subcommittee on Economic and Consumer Policy, I have led an aggressive investigation into the youth e-cigarette epidemic," Krishnamoorthi wrote after referencing FDA findings that vaping has increased by 135% among high-school students over the past two years.

Earlier this month, the Subcommittee found that Juul's attempts to market its e-cigarettes as smoking cessation aids violated FDA regulations. Krishnamoorthi described products that make such claims without FDA review as "unapproved drugs or devices being marketed illegally under the [Food, Drug, and Cosmetic] Act." He went on to state that no e-cigarette or vaping company had been approved to make cessation claims, including the four that received the letters.

These communications came one day after a Congressional hearing on the outbreak of vaping-related lung disease. Rep. Krishnamoorthi referenced testimony from that hearing in which Centers for Disease Control and Prevention Deputy Director Dr. Anne Schuchat said the process of vaping "may be risky."

Rep. Krishnamoorthi ended the letters by asking the CEOs of the four e-cigarette companies to let him know whether they planned to follow Juul in suspending all advertising efforts.

E-Cigarette makers respond to Rep. Krishnamoorthi's request that they suspend all marketing efforts immediately

"We received the Chairman's letter yesterday, and are giving it careful consideration," a spokesperson for Reynolds American wrote.

A Fontem US representative confirmed the company had received the letter and said its leadership would "respond in a timely manner."

"We agree with Chairman Krishnamoorthi that youth should not use or have access to electronic vaping products," the Fontem representative wrote. "We believe that vaping products should be used by adult smokers and EVP (electronic vaping products) users only. We strongly support initiatives to prevent youth access to vaping products and efforts to ensure advertising reaches only our intended adult audience. As both a manufacturer and retailer of vaping products, we take our responsibility in this respect very seriously."

Fontem Ventures is a division of British tobacco conglomerate Imperial Brands.

Rep. Krishnamoorthi's Press Secretary declined to comment. Njoy and Japan International Tobacco did not immediately respond to requests for comment.

Juul sent Business Insider a link to yesterday's press release announcing the changes but declined to elaborate.

None of the companies said whether they would suspend or even reduce marketing. According to numbers from market intelligence firm Kantar Media reported by Adweek, Juul increased its paid media budget from $1.4 million in the first half of 2018 to $104 million during the same period this year.

2019 09 25 RK to Four E Cigarette Companies Re Ad Ban Request (PDF)
2019 09 25 RK to Four E Cigarette Companies Re Ad Ban Request (Text)