Walmart Ban Shows Vaping’s Fall From Smoking Fix to Health Scare
U.S. regulators have described vaping as an epidemic of underage use.
(Bloomberg) -- Walmart Inc. will stop selling e-cigarettes in its U.S. locations as the country grapples with a string of vaping-related deaths that have stirred regulators globally to take action against the nascent industry.
The retail giant’s decision comes after a mysterious spate of vaping-related lung disease across the U.S. that has now affected 530 people and killed seven.
While there have been no reported cases outside of North America, regulators worldwide are taking pre-emptive action: India moved to ban e-cigarettes last week, while China is also likely to hand down stricter regulation of e-cigarette usage.
India joins about 27 other countries, including Australia and Singapore, in cutting off access completely to e-cigarettes, which up until recently was being touted by makers like Juul Labs Inc. as a safer alternative to cigarettes. In the U.K., vaping’s biggest market in Europe, public health officials still endorse e-cigarettes as a way to quit smoking.
“Given the growing federal, state and local regulatory complexity and uncertainty regarding e-cigarettes, we plan to discontinue the sale of electronic nicotine delivery products at all Walmart and Sam’s Club U.S. locations,” Walmart in a statement Friday. “We will complete our exit after selling through current inventory.”
Though Walmart is the largest retailer in the U.S., its decision to cut off sales of e-cigarettes may not be as severe a blow to the vaping industry as any potential sales halt by federal regulators. Juul and other brands draw much of their sales from independent vaping shops and convenience stores.
Vaping has also been at the center of a growing controversy over what U.S. regulators have described as an epidemic of underage use. Last week, the Trump administration said it would take steps to remove almost all flavored e-cigarette products from the market, pending their approval by the Food and Drug Administration.
Juul, which debuted its nicotine vaporizers this month in China, the world’s biggest tobacco market, saw its online stores disappear on Alibaba Group Holding Ltd.’s Tmall and JD.com Inc. days after their launch without explanation -- prompting speculation that official action may be on the way.
U.S. officials still haven’t determined a cause of the ailment as the vaping mystery deepens, but the illness has been reported most often in patients with THC, the key psychoactive ingredient in cannabis. Cases have been identified in 38 American states, prompting the U.S. Surgeon General to called it an “epidemic.”
Walmart, which had been up less than 1%, erased gains on the news. Shares of Altria Group Inc., the Marlboro maker that invested nearly $13 billion investment in America’s top-selling e-cigarette brand Juul last year --briefly pared gains, but bounced back.
Reuters reported news of the decision earlier.
The e-cigarette removal marks at least the third time this year that Walmart Chief Executive Officer Doug McMillon has thrown his company’s considerable heft behind a big issue. In June, he urged Congress to boost the national minimum wage, and he recently promised to stop selling bullets for assault-style weapons, while also requesting that customers not openly carry firearms in its more than 4,700 U.S. stores.
Earlier this year, Walmart stopped selling cigarettes, including electronic ones, to buyers under the age of 21. A spokesperson for the company told Bloomberg that e-cigarettes are a “relatively small category overall” for the retailer.
908 Cases
There are signs the number of cases in the U.S. is climbing. On Friday, the New England Journal of Medicine published a letter from researchers at Boston Children’s Hospital who identified 908 confirmed and suspected vaping-related lung injury cases as of Sept. 20. The U.S. Centers for Disease Control and Prevention relies on a more conservative count of 530.
A vaping health scare that ends up in a clampdown on e-cigarettes, however, risks serving a perverse purpose: cause a jump in the sales of tobacco giants’ most important products. Shares of cigarette makers in India, for instance, gained on news of the local ban.
Canadian convenience store operator Alimentation Couche-Tard Inc. said earlier this week that if policy makers take draconian measures against e-cigarettes, they could lose control over the quality of the supply chain and end up feeding the black market.
(Michael R. Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP, has campaigned and given money in support of a ban on flavored e-cigarettes and tobacco.)
--With assistance from Sandrine Rastello.
To contact the reporters on this story: Matthew Boyle in New York at mboyle20@bloomberg.net;Timothy Annett in New York at tannett@bloomberg.net
To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Lisa Wolfson, Bhuma Shrivastava
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