Boots & Sabers

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0739, 06 Jan 17

FDA Regs Designed to Protect Big Business

This is what it looks like when big business partners with government to kill competitors.

If the rules take effect, the vast majority of companies in the e-vapor industry will be forced to endure the same massively expensive and complex FDA approval process as Johnson Creek Vapor for every product they sell. That’s because the 2009 law enabling the rules sets February 15, 2007 as the “predicate date” for the rules.

To translate from bureaucrat-speak: Products that entered the market after the 2007 predicate date will be subject to the stringent new approval process. However, products that were already on the market on that date will get a pass – tar-causing traditional cigarettes, for example.

Since the e-vapor industry was still in its infancy at the predicate date – and since most of the industry’s advancements have taken place since then – nearly all e-vapor businesses will be subjected to the costly new process if they want a permission slip from the federal government to keep selling their products.

In practical terms, that means most e-vapor businesses like Johnson Creek Vapor will likely collapse under the weight of the new rules within three years.

The FDA’s draconian and arbitrary new rules don’t sit well with Congressman James Sensenbrenner, who represents the area where Johnson Creek Vapor is located.

“Over-regulation is a pervasive problem in Washington,” Sensenbrenner previously told the MacIver Institute. “I have concerns this new rule will hurt the burgeoning vapor and e-cigarette industry, as well as the businesses supported by it.”

You see? The old tobacco companies still have a solid customer base. Even as smoking has declined a bit in the U.S., there are still tens of millions of smokers and billions of people outside of the U.S. who smoke. E-cigarettes have become increasingly popular, but was largely unregulated. This allowed hundreds of small shops to start up to serve the new market.

Big tobacco can’t have that… so they work with the FDA to create these new regulations under the guise of “protecting public health.” The result is that small companies now face millions of dollars of regulatory compliance costs that they can’t afford. Most of them will close. The companies that can afford the new regulations are, of course, big tobacco. So the real effect of the FDA regulations is to squeeze out new entrants into the market to allow the existing large market players to continue their dominance.

Let’s hope that this is one of the regulations that the Trump administration scraps immediately. Government agencies shouldn’t be roving around the nation looking for new things to regulate.


0739, 06 January 2017


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