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article imageJuul alters marketing practices after being probed by FTC

By Karen Graham     Aug 29, 2019 in Business
The Federal Trade Commission is investigating the marketing practices of e-cigarette maker Juul Labs Inc sending shares of tobacco stocks down, a person briefed on the matter said Thursday.
Shares of Henrico County, Virginia-based Altria Group, which has a 35 percent stake in Juul, fell 4.1 percent to $43.96 in afternoon trading after the Wall Street Journal earlier reported the FTC probe.
Juul's marketing practices have already been under scrutiny, with the company being blamed for contributing to the rise in teenage vaping. From 2017 through 2018, vaping among teenagers jumped 78 percent - a statistic that has drawn the interest of the FTC and other federal agencies and groups.
The U.S. House of Representatives and some state attorneys general have also launched separate investigations into Juul marketing practices that have included the use of social media influencers to promote vaping. In 2018, the Food and Drug Administration (FDA) conducted a surprise inspection of Juul's San Francisco, California headquarters and seized documents.
Vaping use among teens has jumped 78% over the last few years.
Vaping use among teens has jumped 78% over the last few years.
micadew from US (CC BY-SA 2.0)
Neither the FTC nor Altria, the tobacco giant that in December invested $12.8 billion for a 35 percent stake in Juul, has commented on the FTC report. “Without commenting on any specific investigation, we fully cooperate and are transparent with any government agency or regulator who have interest in our category,” a Juul spokesman said.
The spokesman also said the company “never marketed to youth” and has changed its advertising to feature adults 35 and over. It has also discontinued its advertising on social media. As for the influencers, the spokesman said: "Our paid influencer program, which was never formalized, was a small, short-lived pilot."
Juul's CEO defends product
Amid the growing concerns over vaping and trying to defend his company's reputation, Juul CEO Kevin Burns had a direct message targeted at non-smokers. He said: "Don't vape. Don't use Juul," in an exclusive interview with Tony Dokoupil for "CBS This Morning."
Electronic Cigarettes
Electronic Cigarettes
Chris F (CC BY 2.0)
"Don't start using nicotine if you don't have a preexisting relationship with nicotine. Don't use the product. You're not our target consumer."
Dokoupil point-blank asked about the safety and toxicity of the Juul product, and Burns said, "I'm not gonna comment about where I am in terms of that." He did concede that the long-term effects of vaping are not known. As for toxicity, Burns said if the product was toxic, they wouldn't be selling it.
The bottom line for Juul is that it markets itself as an alternative to traditional cigarettes. Juul says its mission is to "improve the lives of the world's one billion adult smokers by eliminating cigarettes," and the goal appears to be paying off.
In related news, Juul announced on Thursday that starting in May 2021, they will start requiring retailers to use an updated point-of-sale (POS) system that will require a scan of a customer's ID, according to Engadget. Anyone under the locally mandated age will be prohibited from buying Juul products.
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