E-cigarette Success Could Hurt Tobacco Settlement ABS
The annual MSA payment is determined based on inflation and the amount of traditional tobacco products shipped within the U.S. E-cigarettes and smokeless tobacco products are excluded from the shipment amount. We would expect this shift to stress tobacco settlement ABS, not tobacco manufacturers, as the largest three are expanding into the e-cigarette market.
Any sizable shift in consumer behavior away from traditional tobacco products in favor of e-cigarettes could lead to a decline in traditional tobacco shipments and thus reduce the MSA payments received by tobacco settlements trusts. In recent years, high shipment declines due to the increases in the federal excise tax and some state taxes have put stress on the cash flows to tobacco settlement bonds, and we would expect a shift in market share to further exacerbate the strain on the payment streams. Since Fitch's approach to rating tobacco settlement bonds is based on the amount of MSA payment decline the bond could withstand, a smaller payment amount could cause downgrades across the sector.
They are marketed as a safe alternative to cigarettes. Local law enforcement has a warning about how electronic cigarettes are being used and abused.
Some believe E-cigarettes could be part of South Florida's next big drug problem. Go on YouTube and you will be able to find exactly what many in law enforcement are worried about.
"There's no telling how far this will go," said Lantana Police Officer Nelson Berrios, who is among those concerned about potential misuse of electronic cigarettes.
Some say E-cigarettes are a safer alternative to typical cigarettes. Berrios says that would only be true if the E-cigarette is used the way it was intended. "Parents might see it as a safe product where we don't know what they're going to be smoking out of it," he said. "This is going to become a growing trend."
"There's no telling how far this will go," said Lantana Police Officer Nelson Berrios, who is among those concerned about potential misuse of electronic cigarettes.
Some say E-cigarettes are a safer alternative to typical cigarettes. Berrios says that would only be true if the E-cigarette is used the way it was intended. "Parents might see it as a safe product where we don't know what they're going to be smoking out of it," he said. "This is going to become a growing trend."
Corrections & Amplifications
This article has been changed from its original version to reflect that the Food and Drug Administration did not initiate the idea of a proposed ban on online sales of e-cigarettes. It also clarifies that the FDA did not make nonpublic information available in its discussions with e-cigarette makers.
ASH is a small political lobby group. None of its staff are scientists or have any relevant experience in toxicology. I can see no reason why the MHRA would seek the advice of a private interest group to this extent, nor why it should be arranging its press conferences.
At the very least, there are questions for the MHRA to answer about why they were sharing confidential information with an outside lobby group like ASH. Who is pulling the strings at this organisation?
But the e-cigarettes are being closely scrutinized. At least one Pennsylvania lawmaker has proposed legislation to expand the state's Clean Indoor Air Act targeting smoking cigarettes and their electronic cousins in more public places.
In New York City, mayor Michael Bloomberg is seeking to regulate the tobacco-less e-cigarettes.
According to a Professor at the Boston University of Public Health, as noted in the story, the move would be a “de facto ban” on electronic cigarettes. He believes it would encourage users to return to traditional cigarettes, resulting in a “public health disaster.”
And, if he’s right, they’ll pay a bit more for a pack of smokes. Gothamist reports the Bloomberg administration is seeking a $10.50 price floor per pack.
In taking any action, the FDA must assume people do not want to become addicts to nicotine. Government already takes that approach inherently with increasing restrictions on the sale and use of tobacco products. The result has been a welcome decline in public smoking and smoking in general. People tempted to take up smoking now face difficult choices – in costs, inconvenience, and social stigma.
Here we have a junior minister single-handedly deciding the fate of a controversial piece of legislation that will affect hundreds of millions of people.
In her own mind, the fact that the EU vote was finely poised made it imperative for her to cast the deciding vote without bothering with parliamentary scrutiny or democratic mandates. In fact, it makes her behaviour all the more scandalous. She made herself judge, jury and executioner despite not even understanding what she was voting for (see video below).
From past experience, the Risk-Monger knows that this type of activist legislation against benign developments doesn’t just happen. There is some serious, and seriously unethical, lobbying going on with people passionately driven by personal agendas. This cannot simply be the pharma industry worried about the loss of sales from anti-smoking products presently marketed (although bashing big pharma seems to be the flavour of the month). Although blogs and comment files are full of testimonials of grateful ex-smokers who have been able to quit smoking with the help of e-cigarettes, I see a trend of health gurus (those leading the “denormalisation of smoking” drives) teaming up with ex-smokers who lead or volunteer at local anti-smoking organisations to campaign against the threat of nicotine addiction.
CDC apparently did not actually measure e-cigarette use. They could have, of course. Presumably they knew that the results would contradict the alarmist prohibitionist message they wanted to deliver, and so avoided the truth intentionally. Actual use is clearly trivial. If you actually wade though their breathless rhetoric to find information, you learn that 2.8% of high school students reporting trying an e-cigarette in the last month. How many are actually using them? If it is even as high as 1/10th of that, we are talking 0.3%. But, hey, if you report something like that people will not be worried. And worrying people is the goal. So stick with “doubled!!!!!”.
Identifying the other important lies requires a bit of knowledge rather just the level of math that we can hope every subject of the studies learned many years ago. (Am I being too optimistic about the quality of our schools? Perhaps. But that is off-topic.) It turns out that almost all the e-cigarette triers had also tried cigarettes and indeed that almost 80% of them were “current smokers” (which, given CDC’s misuse of terms may be an overstatement of how much they actually smoke, though we do know that — unlike with e-cigarette trying (“hey, what is that? can I try a puff?”) — a large portion of those who puff a cigarette in a month are genuinely current smokers). So this means that it is quite conceivable that most of those kids who tried an e-cigarette were pursuing THR! That is, they consider themselves to be hooked on smoking and are seeking a low-risk alternative. But we can’t have that, can we?
This is just part of what brings us here today.
It doesn't matter that kids using e-cigs is not a significant danger to worry about anyway (recommended read), nor that the e-cig industry is being more responsible and scrupulous than those who pretend they hold the moral high ground. The job is done; a smear story has been manufactured; and is working exactly as planned - just as the tobacco control industry has been doing successfully for decades.
About health, is it? Think again.
