PARIS - On a recent day in the shadow of the Arc de Triomphe, a line of 20 people spilled onto the sidewalk of a trendy new shop, eager to get a taste of its latest gourmet offerings.
But this was no temple of gastronomy. It was one of scores of electronic cigarette shops that have been springing up in Paris as well as in numerous cities across Europe and the United States. Inside the store, shoppers can choose from more than 60 flavors of nicotine liquid - including Marlboro and Lucky Strike flavors - all in varying strengths and arranged in color-coded rows.
What’s driving Anne Stephan, a lawyer specializing in health issues at a nearby law firm, into the store is a desire shared by many: They want to give up smoking tobacco but don’t want to kick the smoking habit.
After smoking 20 cigarettes daily for 25 years and failing to quit, Stephan said she had cut down to one a day in the three months since she began puffing on a so-called e-cig.
The device uses technology that turns nicotine-infused propylene glycol into an inhalable vapor, making e-cigarettes smoke almost like the real thing, without the ashtray odor.
While e-cigarettes are still a fraction of the $80 billion a-year market for smoking products in the United States, their growing popularity has touched off a clash between retailers and regulators in Europe.
In the United States, the Food and Drug Administration tried to block the sale of e-cigarettes, claiming that they were unapproved “drug/device combinations.” Manufacturers successfully challenged the agency’s position, but in a 2010 ruling, a federal appeals court held that e-cigarettes could be regulated by the agency as tobacco products.
An agency spokesman, Stephanie Yao, said the agency was preparing to release for public comment a proposed rule to regulate additional categories of tobacco products.
Currently, the FDA’s tobacco regulations apply to cigarettes, tobacco and smokeless tobacco.
“Further research is needed to assess the potential public health benefits and risks of electronic cigarettes and other novel tobacco products,” Yao said in a statement.
Health officials say their safety has not been medically shown and the devices could encourage children to take up smoking. Some anti-smoking advocates, who are annoyed to see the gadgets glowing in restaurants and bars, call for a ban on their use in public places, the same ban in force for tobacco products.
Global sales jumped 30 percent in each of the previous three years to around $2 billion in 2011, with the European market around $650 million, according to a recent analysis by Euromonitor International. Retail sales of e-cigs in the United States reached $500 million last year. Although that is only about 0.5 percent of the overall tobacco market, analysts expect those figures to double this year and continue climbing.
“E-cigarette consumption could surpass traditional cigarettes in the next decade,” said Katherine Devlin, president of the London-based Electronic Cigarette Industry Trade Association. “Growth is exponential and there are no signs it’s slowing down. So there is a huge amount at stake.”
E-cigs are distributed by more than 100 small and medium-size firms like NJOY and White Cloud. Most are manufactured by a Chinese company, Ruyan, which invented the gadget that heats the nicotine solution into a smokelike vapor. The device, which also can have an LED light to mimic the glow of burning ash, has been registered for patents in more than 50 countries.
But now, the makers of Marlboro and other big tobacco brands are rushing to get a piece of the action - especially to make up for lost sales as tobacco smoking declines in Western countries. Last year, Lorillard bought the e-cigarette maker Blu for $135 million. British American Tobacco, RJ Reynolds and Japan Tobacco International also have taken stakes in the new industry.
In April, as cigarette sales fell 5.2 percent in the first quarter from a year ago, Altria announced it would soon unveil its own electronic cigarette. This month, American said it would introduce a revamped e-cig with an ad campaign including television commercials, which are off-limits for tobacco cigarettes.
Certainly signs of growth are there. In 2011, the latest year for which data were available, more than 20 percent of adult smokers said they had tried e-cigarettes, double the rate in 2010, according to the Centers for Disease Control and Prevention.
Electronic cigarettes could account for nearly 5 percent of the value of all tobacco products in the next two decades, according to Euromonitor International.
Business, Pages 72 on 06/16/2013