The embattled American vape company Juul is pushing foreign governments to ditch strict e-cigarette regulations as it aggressively expands across the globe in an attempt to offset lost profits in the U.S. It entered Ukraine in June and ever since has been increasingly attempting to adjust local rules in its favor.
Juul, which sells sleek e-cigarettes and flavored nicotine “pods” that have become a craze among American teenagers, is planning to enter even more new markets in Europe, the Middle East, Africa, South America and Asia. As it expands, the company has spent millions of dollars lobbying politicians in an attempt to soften or remove relevant regulations on products in a number of countries.
The Kyiv Post and The Bureau of Investigative Journalism found that Juul met politicians, regulators and officials to lobby on vaping rules, putting forward health claims it cannot legally make in the United States. It has also launched glossy marketing campaigns that attempt to portray the company as a responsible alternative to smoking – a far cry from the advertisements that first landed the brand in hot water in the U.S.
The company has come under intense pressure in its home market and is facing hundreds of lawsuits as well as state and federal investigations into claims it is early advertising hooked a generation of teenagers on nicotine.
Read also: What is Juul?
Despite the mounting criticism in the U.S. – including a raid by the U.S. Food and Drug Administration on Juul’s offices – investor presentations show that Altria, one of the world’s largest producers of tobacco, is confident that international revenues can offset the predicted slump in U.S. growth. It hopes Juul’s global sales will match domestic ones within four years.
Juul is requesting private meetings with ministers and ambassadors across the world to promote its e-cigarettes, influence countries’ vaping laws and stop taxes being slapped on its products. Lobbyists have suggested Juul devices can help people quit nicotine altogether, a claim the company would be banned from making in the U.S., according to transcripts of meetings seen by the Kyiv Post and The Bureau.
Its lobbying offensive even includes offering to help governments write e-cigarette rules, despite the fact that tobacco companies are banned from interfering with public health policy under an international treaty.
Juul said it wants to work with regulators and policymakers to provide “an industry point of view on regulations.”
Experts are worried other countries could face their own teen vaping “epidemics” if Juul is not adequately regulated as it expands.
“Cigarettes are not cool in most communities. But Juul is cool with youth in a number of communities,” said Dr. Vinayak Prasad, head of tobacco control for the World Health Organization. “That’s a hugely powerful strategy for the tobacco and related industries, to let these products get in and capture significant market share, getting 6-8% of the young people addicted to nicotine. That’s a huge market for the future.”
“Apart from the known harmful effects of nicotine on the developing brain, nicotine is addictive and could lead people, particularly young people, to take up more harmful forms of nicotine or tobacco consumption.”
A recent wave of mysterious lung illnesses, causing dozens of deaths and thousands of hospitalizations in the U.S., has compounded Juul’s troubles, although the cases were linked to black market products and not Juul devices.
Juul looks similar to a USB flash memory stick and can be charged from a laptop. (Volodymyr Petrov)
However, the cases have re-ignited fears over the safety of e-cigarettes and public health debate in which the benefits of switching smokers to a less harmful product are pitted against the risk that non-smoking teens take up vaping.
‘The iPhone of e-cigarettes’
Juul was launched by Pax Labs in 2015, and within three years was America’s most popular vape. Dubbed “the iPhone of e-cigarettes,” it combined slick design with enticing flavors like “cool cucumber” and “creme brulée.”
Its first advertising campaign, Vaporized, featured young models posing and dancing against brightly colored backgrounds. Its ads appeared on huge screens in New York’s Times Square and page spreads in Vice. It threw yacht parties, hosted rooftop cinema clubs and held concerts. The brand even funded summer camps for children as young as eight and went into schools, advertising e-cigarettes as “totally safe”.
The devices, which could be used discreetly and without releasing much vapor, surged in popularity. High school students bragged of taking puffs during lessons without anyone noticing. A language evolved among teenagers: “ghost ripping” meant taking a discreet drag; “Juuling” became a verb. On YouTube and TikTok, teens shared tips on blowing rings and shapes with vapor and decorating their Juuls with stickers.
Smoking rates in America fell sharply from 2013, with e-cigarettes like Juul contributing to the decline. Yet vaping has been accused of creating a new public health problem: addictions among non-smoking teenagers. In 2011, 16% of high school students regularly smoked and just over 1% vaped; the number of smokers fell to 8% in 2018, but the number vaping soared to almost 21% – more than had smoked before e-cigarettes took off. The FDA declared it an “epidemic” and said Juul was responsible.
Juul said: “We have never marketed to youth and do not want any non-nicotine users to try our products.”
Juul has been hit with hundreds of lawsuits in which Americans claim they were not warned about the potential dangers of vaping, or that the products contained nicotine. Juul disputes this. Some allege they have suffered respiratory issues, seizures, strokes, mental health and behavioral problems as a result of their addiction to Juuling. Lisa Vail, from Florida, told the Kyiv Post and The Bureau she believes her 18-year-old son Daniel died from respiratory problems due to a heavy Juul addiction.
The company has until May next year to submit an application to the FDA to continue selling its products. It will need to prove they are “appropriate for the protection of public health”.
A host of cities and states have already tried to ban vapes like Juul or flavored nicotine, including a blanket ban in its home city, San Francisco. As it fought these measures, Juul’s bill for lobbying in Washington soared from $120,000 in 2017 to more than $3m in the year so far.
Elsewhere, it gave nearly $19 million to support PropC, a ballot measure to overturn San Francisco’s vape ban, which was unsuccessful. It set up The Switch Network, recruiting members of the public to contact state and local politicians to promote vaping. Critics accused it of “astroturfing”, dressing up a well-funded lobbying campaign as a grassroots movement.
Stefanie Miller, an investment adviser who specializes in regulatory risks, said the backlash against Juul in the U.S. will severely constrict its American market. “I would be very concerned if they weren’t simultaneously trying to grow in other markets,” she said.
Altria told investors it expects hardly any earnings from Juul this year as it expands abroad. Juul has launched in 21 countries outside the US, including Canada, Russia, Ukraine and much of Europe, but has plans to open in more markets across Europe, the Middle East and Asia-Pacific, and has advertised for jobs and lobbied governments in South America.
Amid the backlash at home, the company made extensive efforts to show it has changed and suspended all “active” lobbying in the US – but the Kyiv Post and The Bureau uncovered a very different picture across the world.
Rewriting the rules…
For decades tobacco companies lied about the lethal effects of their products and tried to subvert government policies that would harm their profits. In 2003 a landmark international treaty from the World Health Organization was ratified by more than 180 countries including Ukraine. One key clause asks governments to protect public health policies from the vested interests of tobacco and e-cigarette companies, limiting interactions and avoiding partnerships.
Yet the Kyiv Post and The Bureau have found evidence that Juul is seeking to shape how countries write the rules that will govern its products, in violation of the treaty.
…in Ukraine
In Ukraine, Juul is trying to influence the development of the country’s first legislation regulating e-cigarettes despite Ukraine’s ratification of the World Health Organization’s treaty.
In June, Juul entered Ukraine with a big event at Kyiv 18th century historic building Mystetsky Arsenal, a historic building and a national art and culture museum in Kyiv, which is dedicated to promoting arts and to “raising important social issues.”
While the official policy of Ukraine emphasizes decreasing nicotine consumption, the state-owned Arsenal found no conflict in renting the venue to Juul for an e-cigarette sales launch.
The Arsenal ignored the question why, but in an official response to the Kyiv Post’s and The Bureau’s request, it did disclose that Same and Friends PR agency, hired by Juul to organize the event, paid $10,000 to rent the hall, an average price tag for such a service.
During a presentation, moderated by Oleg Panuta, a famous Ukrainian TV personality, Juul set its aim to convert the 8.2 million adult smokers in Ukraine by “suggesting an alternative.”
A month prior to the launch, Ivan Darkov, Juul’s top manager in Ukraine, said in an interview that the company would not engage celebs and influencers in e-cigarette promotion.
Juul launched in Ukraine in June 2019 and is now battling to take over the market of e-cigarettes. (Volodymyr Petrov)
Despite such promises, Juul is being promoted on social media, including by influencers like the Kyiv model and topless DJ Alya Kalinichenko. 738 posts related to Juul appeared on Twitter and Instagram in Ukraine between Jan. 1, 2018 and Oct. 1, 2019, according to research by a Ukrainian branch of the Campaign for Tobacco-Free Kids. Juul denied promoting its products on social media.
Moreover, since its launch, Juul has been made extensive attempts in the Ukrainian parliament and Cabinet of Ministers to assist in creating e-cigarette legislation to-be.
Ukraine has no such regulation at the moment, meaning there are no excise taxes for e-cigarettes distributors. The only ban is on vaping in public places.
In July, Darkov, who previously worked for Monster Energy and Red Bull energy drinks, approached Ukraine’s Ministry of Health with his suggestions regarding their draft regulation for e-cigarettes.
The ministry is supposed to implement what EU countries did in 2016 and what is mandatory for Ukraine under its association agreement with the EU. The bill equates vaping to smoking regular cigarettes and sets the maximum level of nicotine in e-cigarettes at three times less than Juul’s 5% nicotine pods, which Juul sells in Ukraine and which are banned in the EU. This law would also ban Juul’s flavored pods like “creme brulée.”
Darkov asked the Ministry not to ban 5% pods arguing “there is no scientific reasoning for setting up such a low measure (of nicotine content),” in a letter Juul sent to the ministry seen by the Kyiv Post and The Bureau. Darkov also argued that e-cigarettes do not lead to cancer and heart disease and disputed the flavor ban.
On Nov. 19, the ministry sent the new anti-tobacco bill for approval to colleagues in other ministries and institutions. If approved it will go to a vote in parliament. In its current form, the bill does not include Juul’s suggestions, according to Andriy Skipalsky, head of the Directorate for Public Health in the ministry.
“The ministry has to work in the best interests of public health as well as with respect to the responsibility of the government to implement Directive 40 (of the EU on tobacco regulation). The suggestions of the company (Juul) did not comply with the provisions of the Directive, hence they were dismissed,” said Skipalsky.
Juul’s promotion in the U.S. made Skipalsky believe that “the company targets the youth”.
“Their marketing is very aggressive and while we waste our time, the addiction to nicotine develops quite quickly and would lead us to have the generation of nicotine addicts at risk of switching to tobacco smoking,” continued Skipalsky, highlighting that he is hopeful the law would pass the parliament.
In October, Darkov went to parliament. He sent a letter – seen by the Kyiv Post and The Bureau – to Mihail Radutsky, the head of the Ukrainian parliamentary committee of health, to “inform about the desire to take an active part in discussing the law bills on (…) e-cigarettes.” Darkov asked the committee to involve his representative Dmytro Rafael in its work. He said that Rafael would “provide consultancy” to lawmakers.
An assistant of Radutsky said that the committee has a month to address Juul’s inquiry and added that committee meetings are open to the public, meaning Juul’s representative can attend.
However, the Ukrainian legislation says the parliamentary committee can be attended by journalists and NGO representatives – no mention of e-cigarettes producers’ employees.
In theory, Ukraine can’t allow Juul representatives in the committee or accept the company’s suggestions for the legislation because Ukraine ratified the WHO treaty.
Rafael told the Kyiv Post and The Bureau that he is not engaged in the work for the committee.
Regarding their desire to collaborate with the Ukrainian parliament, Juul responded that its “consultancy and information support for comprehensive regulation will accelerate legislation development for e-cigarettes in Ukraine, at least, we know the market from inside, we have valuable data and experience.”
Ukrainian online shops aggressively advertise the product with claims Juul cannot scientifically back – like that it helps to quit smoking.
“Juul is a style, a quality and a real way to quit smoking,” says the website of Alishop.
“Juul does not have a bad smell, your clothes would not absorb it. It is light and tiny – ladies would definitely like it,” says the website for Dr. Smoke, a shop that offers free Juul trials for all customers.
Juul said that these shops don’t have a license for selling its products.
…and elsewhere
The approach is similar to Juul’s strategy in other countries.
In a private meeting with a government minister in Vietnam in August this year, lobbyists said Juul was working with a “number of ministries” formulating the country’s new decree on vaping. They offered to consult with the Ministry of Health on the new law, according to a transcript of the meeting seen by the Kyiv Post and The Bureau. Vietnam is a signatory of the WHO treaty. Juul said the interaction did not violate the treaty.
“Juul clearly has a systematic global strategy to meet with government officials in private behind closed doors,” said Matt Myers, president of the Campaign for Tobacco-Free Kids based in Washington, D.C. He added that in his opinion the strategy violated the WHO treaty and repeated methods the tobacco industry has used to undermine reasonable regulation. “(It) is exactly what the tobacco industry did: replace good science and good evidence with well-paid lobbying and PR firms which operate in secrecy.”
Illustration by Rebecca Hendin
Juul lobbyists have also been telling officials the company’s products can help people quit smoking, a claim the company cannot make in America because the FDA has not approved e-cigarettes for smoking cessation. To do so, the FDA would have to review the evidence, only some of which backs the claim; other studies have shown people continue to smoke and vape.
“When Juul tells government officials outside the United States that its products have been shown to help people quit using nicotine altogether it is inconsistent with the evidence, it is inconsistent with their internal documents, and it reflects a willingness to say things that they know aren’t true,” Myers said.
In the meeting in Vietnam, a Juul lobbyist claimed its products could help wean people off nicotine entirely. He said: “What you can do, is when someone transits from a cigarette to Juul you can eliminate the combustion and you can offer them lower strength pods over time (…) Over time with our technology we can then address the second phase and migrate people down nicotine to zero consumption.”
An ambassador from a southern African country, who wanted to remain anonymous, told the Kyiv Post and The Bureau that Juul lobbyists gave him the same pitch. He said: “They said they had success stories of people heavily addicted to smoking who switched to Juul and then quit nicotine altogether.”
The lobbying is as persistent as it is pervasive. Juul approached the Mexican government repeatedly, but its representatives were told they would get no further meetings, as there are strict controls on ministers’ contact with tobacco companies.
In Indonesia, campaigners are concerned about Juul’s rise. At Cilandak Town Square, a shopping center in Jakarta, the Juul shop – its largest in Asia – sits near a Baskin Robbins and a Starbucks. Experts fear the brand is targeting young people.
Dr. Rafendi Djamin of the Indonesian National Civil Society Coalition on Tobacco Control said that the company was aggressively expanding, while e-cigarette regulations had been in limbo for two years. He said: “It has set up kiosks in places that teenagers hang out.” He fears a rise in teen vaping on top of the country’s soaring teen smoking rate. “Vaping in public has become stylish for young people. They idolize vaping.”
Move fast and break things
Juul has been fighting restrictions on its products since its global expansion began. Its first international market was in Israel, where it launched in May 2018. Within three months, it had been banned by the government because officials believed Juul’s stronger nicotine pods were “a grave risk to public health.”. Juul launched legal action, with the case to be heard this month, and began a pro-vaping PR campaign.
In India, Juul was said to have captured a third of the booming e-cigarette market before it had formally launched. In preparation, the company hired PR companies and thinktanks to seed the media with messages about the benefits of e-cigarettes. However, just as Juul was set to start selling there officially, the central Indian government banned vapes, fearing e-cigarettes were a growing health risk to young people.
Soon Plume Vapours and another local e-cigarette importing company, filed petitions against the ban. When the case was opened at a Calcutta court in October, two Juul officials were said to be sat beside Plume’s founder. Defending the ban, the Indian solicitor general Aman Lekhi told the court this was a “proxy case for Juul”. Juul told the Kyiv Post and The Bureau it has “supported Plume Vapours in the past” but is not part of the legal case.
After launching in the Philippines in June this year, Juul is now fighting the government’s proposal to raise taxes on e-cigarettes. Juul’s stronger 5% pods would be badly hit.
During hearings in the Philippine senate in September, Kenneth Bishop, President of Juul Labs Asia-Pacific, claimed that Juul’s products should be taxed less because they were less harmful. He also told legislators that the company was now acting responsibly. He said: “We have done some things that we are not proud of in the past but we have taken aggressive and industry leading actions to mitigate any risks of exposing our products to youth or appealing to youth.”
Yet, fearing a surge of vaping-related illnesses as the US has seen, the Philippines’ Department of Health has now asked all hospitals to formally report any cases.
Shane MacGuill, an analyst at Euromonitor, told the Kyiv Post and The Bureau Juul’s rapid expansion and “move fast and break things” mentality could harm its perception among regulators and the public.
“I think people, in general, don’t really feel comfortable with where (Juul) think nicotine should be used and shouldn’t,” he said, “They sort of drove a cart and horses through all of that. And I think it’s really a time for reflection for them.”
Juul’s founders Adam Bowen and James Monsees met over smoking breaks at Stanford University, where they studied product design. Intrigued by the idea of making smoking less harmful and more socially acceptable, they turned their final thesis into an e-cigarette company, Ploom, in 2007, which became Pax Labs in 2015, and Juul Labs in 2017.
The Juul device has gone through many iterations since the prototype. It now looks like a high-end USB stick, its sleek design a far cry from some clunkier competitors, earning it the title of “the iPhone of e-cigarettes.” A puff delivers a vaporized dose of nicotine, the addictive substance in tobacco.
The company also sells pre-filled nicotine pods that click into the device and act as a mouthpiece, which come in flavors like “apple orchard,” “mango nectar” and “alpine berry.”
Juul borrowed a process developed by the tobacco company RJ Reynolds to make its cigarettes more palatable when developing its nicotine formula; the company uses benzoic acid, a common food preservative, to produce “nicotine salts.” This prevents the throat irritation that normally occurs when smoking.
It also means a higher dose of nicotine can be inhaled directly into the lungs, entering the bloodstream more quickly. Researchers say this combination allows users to get a puff that matches the addictiveness of a Pall Mall cigarette.
Juul’s stronger pods contain 59mg/ml of nicotine, meaning one pod is the equivalent to a pack of 20 cigarettes. The stronger pods are banned in the UK and Europe under EU regulations, where nicotine strength is capped at 20mg/ml.
In the UK, at £10.99 for a set of four pods, Juul costs roughly the same price as the average pack of cigarettes while delivering more nicotine. And unlike cigarettes, which burn out, users can keep vaping on until the device runs out of battery, which takes about a day of use.
Although Juul’s influencer-led early marketing would later prove a problem, it created a trend that propelled the company from a small start-up to a market leader. In late 2017 it held 32% of the market; by November 2018, it had 76%. As it grew, Altria, one of the “big six” tobacco businesses, invested $12.8 million for a 35% stake. Juul forecast revenues of $3.4 billion for 2019, triple what it generated in 2018, according to Bloomberg.
Juul’s meteoric rise ended when concerns over the teen vaping “epidemic” in the US-led to congressional hearings and multiple investigations into its early marketing practices. While e-cigarettes expose users to fewer carcinogens than traditional ones, scientists are still learning about the health effects of vaping, especially on young people. The damaging effect of nicotine on teenagers – harming the part of the brain responsible for memory, attention and learning – is well known, but the long-term effects of inhaling the vapor are unknown.
In October 2019, as the outcry raged in the U.S., Altria wrote down $4.5 billion of its investment in Juul, and adjusted its predictions about the company’s international sales.
Additional reporting: Sharon Kelly, Rahul Meesaraganda
