Some of the leading U.S. e-cigarettes manufacturers are moving their production plants to the United States from China in response to the ever-growing concern over quality and the likelihood of tighter federal regulations. According to Reuters, some of the most popular U.S. e-cigarette companies, including Mistic and White Cloud, announced that they intend to move production to new, highly automated U.S. factories that would facilitate the tracking of ingredients and give even more control over the quality of their products. As another benefit, the companies even expect costs to be lower than in China, the country that invented these battery-powered devices.
‘People are concerned about quality,’ told Bonnie Herzog, a senior analyst at Wells Fargo Securities, who believes more manufacturing would shift to the United States. ‘There is varying quality among all these different brands, ’she added. ‘I think regulation will standardize these products because they will be forced to improve.’
The U.S. Food and Drug Administration proposed strict regulations back in April to have manufacturers looking to get into the U.S. market register with the agency and list their products’ ingredients.
‘As a general rule, the FDA regulation will require more control over the manufacturing process,’ said Bryan Haynes, an attorney at a law firm in Richmond, Virginia that represents some electronic cigarette companies. He added that more companies are looking to move production to the U.S. because it ‘could make compliance easier.’
Many of these companies already make the nicotine-based e-liquid used in e-cigarettes in the United States and then ship it to China, where the battery-powered devices are assembled. On the other hand, most batteries will continue to be made in China.
U.S. sales of e-cigarettes are believed to outpace sales of tobacco cigarettes by 2020, mostly due to the perception that they are safer to puff on. While still there is little data on the long-term effects these devices might have on human health, many supporters say electronic cigarettes are a safer alternative to smoking traditional tobacco since they do not produce any of the lung-destroying tar.
Reynolds American Inc is the only one of the nation’s three largest tobacco companies to make its e-cigarettes in the United States, at a factory in Kansas. Lorillard Inc’s ‘blu’ brand is assembled in China but the nicotine e-liquid is produced in the United States.
In May, Tarpon Springs, Florida-based White Cloud e-cigarette company said it would move manufacturing to an automated plant in the United States that would make production much faster and more precise. ‘We can deliver a much more uniform product because we’re not reliant on someone’s eye,’ said Rob Burton, director of corporate and regulatory affairs at White Cloud. The company, like many other manufacturers, has been hand filling the liquid into the devices in its Chinese facility until now.
On the other hand, Mistic officials predict to cut costs by moving production to the United States because the company will not have to ship the fluid and could reduce the number of workers necessary for the production process.