Electronic cigarette leader Juul Labs is reportedly ready to withdraw from a handful of international markets because the regulatory environment has become overly hostile to the device.
According to BuzzFeed News, Juul will soon remove its products from shelves in Austria, Belgium, Portugal, France, and Spain.
Under the glare of global spotlights
The news outlet reports the European Union's strict requirement that e-cigs contain no more than 20 milligrams of nicotine makes it difficult for Juul and other manufacturers of tobacco alternatives to do business there. In the U.S., where there is no nicotine limit for e-cig products, a Juul pod can have as much as 59 milligrams of nicotine.
Austria, Belgium, and Portugal are very small markets for Juul, but the leading e-cig manufacturer generates significant sales from France and Spain. It will exit France by the end of the year, but withdraw from the other countries in July, paring its presence in global markets to a narrow selection that includes Germany, Italy, Russia, and the U.K.
It marks another setback for Juul, which is also under increasing regulatory pressure in the U.S. for its alleged role in the growth of teenage use of electronic cigarettes. The Federal Trade Commission recently announced it was suing Altria (NYSE:MO) over its $12.8 billion investment in Juul, in an effort to force the tobacco company to unwind the deal.
As regulatory scrutiny of Juul has intensified over the past year, Altria has written off most of the investment already. Both companies are also being investigated by the SEC and the Food & Drug Administration.