Altria Group Inc. said Thursday its NJOY LLC operating company has filed lawsuits against 34 foreign and U.S. makers, distributors and online retailers of illicit disposable-vape products that are sold in California and other states.
The suit alleges that the companies are violating California’s flavor-ban law, unlawful under federal law and subject to action from the Food and Drug Administration. The companies are illegally competing with companies that comply with state and federal laws, according to Altria.
The suit is seeking a nationwide injunction against the import and sale of the products along with “significant” compensatory and punitive damages.
“Today there are two markets — one for those who play by the rules and one for those who flagrantly ignore them,” Murray Garnick, Altria’s executive vice president and general counsel, said in a statement. “We are taking this action because the current state of the illicit e-vapor market is intolerable, and we must see more action from FDA and others.”
The FDA began a crackdown on flavored vapes in 2018 following a spike in teenage vaping that was mostly tied to Juul Labs Inc., which Altria
MO,
partly owned at the time. The regulator first banned flavors that were deemed attractive to young people. But in 2022, it moved to a full ban on Juul products and ordered the company to remove all existing products from the market.
In March, Altria exchanged its minority stake in Juul for a global license to some of Juul’s heated-tobacco intellectual property.
Earlier this week, the FDA banned the sale of Vuse Alto menthol e-cigarettes, which had surpassed Juul as the top-selling vaping products in the United States. Vuse Alto is sold by Reynolds American.
Last week, British American Tobacco PLC
BATS,
filed a complaint with the International Trade Commission charging makers of the most popular disposable vapes with unfair imports.
“We continue to think, one way or another, there will be meaningful enforcement around removal of illegal disposables over the next 12 months,” said Jefferies analyst Owen Bennett.
All of the foreign companies in the Altria suit are based in China, while the U.S. companies are operating in Arizona, California, Delaware, Florida, Michigan, Minnesota, New Jersey, New York and Texas.
The colorfully named brands at stake include Breeze, Elf Bar, EB, EB Create, Esco Bar, Flum, Juice Box, Lava Plus, Loon, Lost Mary, Mr. Fog and Puff Bar.
The defendants have not filed or received premarket approval from the FDA, which regulates the tobacco industry. Several have received warning letters from the FDA to inform them their products are adulterated and misbranded and require a marketing authorization, said Altria.
NJOY filed the suit in the United States District Court for the Central District of California.
Altria’s stock has fallen 6% in the year to date, while the S&P 500
SPX
has fallen 12.5%.
Read the full article here