MO Altria Group Inc

By Tripp Mickle 

The U.S. government on Thursday said it was assuming regulatory authority over e-cigarettes and all other tobacco products with rules that will prohibit sales to anyone under 18 and require manufacturers to submit products for approval.

The Food and Drug Administration rules have the potential to upend the $3.5 billion e-cig industry. Many of the small vape shops, device manufacturers and liquid nicotine producers won't be able to afford the FDA's approval process, which could cost anywhere from $2 million to $10 million per item, according to the regulatory consulting company SciLucent LLC.

The approval process is expected to be less damaging for major tobacco companies that have launched e-cigarette brands, such as Altria Group Inc., Reynolds American Inc., and Imperial Brands PLC. Those companies have financial resources to cover the costs that many small vape shops and liquid nicotine manufacturers lack.

In addition to product approval, the new rules prohibit sales of ecigs to anyone under 18, health warnings on packages and a ban on vending-machine sales. The health warnings will say, "WARNING: This product contains nicotine. Nicotine is an addictive chemical."

"This is going to be a grim day in the history of tobacco-harm reduction, " said Greg Conley, president of the American Vaping Association, an industry-funded advocacy group. "It will be a day where thousands of small businesses will be contemplating whether they will continue to stay in business and employ people."

In addition to e-cigs, the FDA said it would be taking regulatory authority over other unregulated tobacco products, including cigars, pipe tobacco and water pipe tobacco.

Write to Tripp Mickle at Tripp.Mickle@wsj.com

(END) Dow Jones Newswires

May 05, 2016 09:45 ET (13:45 GMT)

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