E-Cigarette Sting Operation Prompts Warnings to Retailers

(Bloomberg) -- A U.S. government-led sting operation of retailers including 7-Eleven Inc. stores and Royal Dutch Shell Plc gas stations led to 40 warnings for selling Juul e-cigarettes to kids.

The Food and Drug Administration letters are part of an undercover operation the agency has been conducting this month to stop retailers from selling the newest craze in underage tobacco use. Juul e-cigarettes, made by San Francisco-based Juul Labs Inc., resemble a USB thumb drive and have worried regulators and parents because they aren’t easily identified as a tobacco product.

“This blitz, and resulting actions, should serve as notice that we will not tolerate the sale of any tobacco products to youth,” FDA Commissioner Scott Gottlieb said in a statement.

The FDA plans additional enforcement actions involving e-cigarettes in “coming weeks,” Gottlieb told a Senate Appropriations subcommittee Tuesday.

Senator Dick Durbin, an Illinois Democrat, praised the FDA for taking action.

“By taking one look at a Juul advertisement, it’s abundantly clear they have dusted off Big Tobacco’s old marketing playbook and are obviously trying to market their products to our children and teens,” Durbin said.

Juul said via a tweet that it has a program to act upon violations involving underage sales and plans to announce additional measures soon.

The FDA also demanded that Juul turn over documents relating to product marketing and research related to youth appeal.

“We don’t yet fully understand why these products are so popular among youth,” Gottlieb said in the statement. “But it’s imperative that we figure it out, and fast.”

The FDA also found some Juul products for sale on EBay Inc., which the online company quickly took down.

Juul held a 39 percent share of the electronic-device smoking market by dollars over the 13 weeks though March, according to data from IRI. That’s up 32 percent from the same period last year. Juul was more than twice the size of its next largest competitor, Vuse, which is owned by British American Tobacco Plc’s Reynolds American division.

--With assistance from Jennifer Kaplan and Erik Wasson

To contact the reporter on this story: Anna Edney in Washington at aedney@bloomberg.net.

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Mark Schoifet, Nick Turner

©2018 Bloomberg L.P.