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SAN FRANCISCO-BASED e-cigarette company, Juul Labs INC. partnered with the subsidiary of JG Summit Holdings, Inc. to enter the Philippine market, as a part of its plans to expand operations within the Asia-Pacific region.
“The company’s entry into the Asia Pacific market is the next step in the company’s mission to help improve the lives of the world’s one billion adult smokers by offering a viable alternative to combustible cigarettes,” Juul Labs said in a statement.
Juul entered the South Korean market before and is set to introduce its products in Indonesia in the next few weeks.
For its Philippine venture, the company partnered with Better For You Corp., a subsidiary of Gokongwei-led JG Summit.
A Juul device kit, which includes a Juul and a USB charging dock, is priced at P1,600. A two-pod refill kit is priced at P350. Pods come in two nicotine strengths: 3% and 5% and in four flavors: Virginia tobacco, mango, mint, and creme. An extra charging dock is priced at P500.
The device is pegged as an alternative to traditional combustible cigarettes with a regional executive noting that Juul use has led to a decline in cigarette sales.
“In the US, we are seeing a major disruption of the tobacco industry largely driven by Juul. Cigarette pack volumes are now declining at an unprecedented 11.2% year on year as of May 18. Smokers switch to less harmful alternatives,” Ken Bishop, president of Juul Labs APAC South, said during his presentation during the launch on June 20 at the Blue Leaf Events Place in Taguig City.
The Philippines is home to 16 million smokers, according to the company.
Juul e-cigarettes use an internal, regulated heating mechanism that creates an easily inhaled aerosol sans smoke, ash, and odor. The product uses a non-refillable pod that contains the liquid nicotine formula. It uses a mix of nicotine salts that masked the bitter flavor of nicotine.
During his presentation, Mr. Bishop quoted the American Cancer Society, among others, to support Juul’s claim that e-cigarettes are less harmful than combustible cigarettes.
“Research has found that e-cigarette use is likely to be significantly less harmful than smoking regular cigarettes. This is because e-cigarettes do not contain or burn tobacco — a process that produces an estimated 7,000 chemicals, including at least 70 chemicals that cause cancer,” the American Cancer Society posted on its website in 2018.
But despite being less harmful, the American Cancer Society pointed out that “health effects of long term use are not known”.
“E-cigarettes are still fairly new, and more research is needed over a longer period of time to know what the long-term effects may be. The American Cancer Society is closely watching for new research about the effects of using e-cigarettes and other new tobacco products,” it said.
Washington-based non-profit organization National Center for Health Research noted on its website that “the increased harm of Juuls compared to other e-cigarettes is due to the concentration and contents of its Juul pods.”
The center claimed a Juul pod contains 5% nicotine by volume (equivalent to a pack of cigarettes) which is “twice the concentration of nicotine in similar devices” like the Blu e-cig cartridge which contains 2.4% nicotine.
“This increases the risk of addiction,” it said.
On its website, the Philippine Department of Health (DoH) echoed the World Health Organization’s (WHO) stance that there is “no specific evidence to confirm the product’s safety and efficacy” and that e-cigarettes are not “proven nicotine replacement therapy.”
The DoH said in May that they — through the Philippine Food and Drug Administration — are drafting an administrative order regulating sales of electronic nicotine delivery systems and non-nicotine delivery systems.
Juul is facing regulatory threats in the United States, amid concerns that its vaping products are targeting teenagers.
The company has said it is keeping its vaping products away from under-21 customers by pulling their flavored nicotine pods off store shelves and shutting down their social media accounts though they still have a Twitter account. In the US, the smoking age is 21 years old, while in the Philippines, it is 18.
Juul’s entry in the Philippines comes as Congress recently approved a higher levy on heated tobacco and vapor products. The measure is awaiting President Rodrigo R. Duterte’s signature.
Heated tobacco products like e-cigarettes will be taxed P10 per pack beginning January 2020, which will be followed by yearly hikes of 5% starting 2021.
Also in 2020, vapor products, pods, cartridges, and refills will be taxed P10 per 10 ml but those with volumes higher than 50 ml will be taxed P50 on top of the P10 per additional 10 ml. Excise for these vapor products will also increase annually by 5% starting 2021.
The excise taxes are on top of the existing 12% value-added tax.
“Juul is committed to being an ethical and responsible company in the Philippines,” Mr. Bishop said before adding the company is “compliant with local laws and regulations” as the packaging follows strict local requirements, including visible warning labels.
The company also has a “strict marketing and advertising code of conduct” which includes no social media presence, although they do have a Twitter account.
“We place our kiosks in places where children do not linger and we actually discourage teenagers from lingering in front of our kiosks. We are very mindful where we put our products,” Cornelio S. Mapa, Jr., president of Better for You Corp., said during the event.
He added that Juul packaging clearly states that it is not for sale to minors and that customers are required to present a valid government ID before purchasing any product.
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