Picture credit: Evgeny Gromov/Getty
Artillery Row

Low nicotine, low profits

Well, that’s the end of ultra-low nicotine cigarettes

There is a well known scene in The Simpsons in which the CEO of Duff beer announces that he has taken all the alcohol out of his product and expects to sell more of it because “our customers buy Duff for its robust taste, not its alcoholic content”. Thirty minutes later he is hanging up an “Out Of Business” sign on the factory gates and saying “Well, that’s the end of me.”

It was impossible not to think of this when reading the news that the US-based 22nd Century Group Inc. (XXII) has “initiated a process to evaluate strategic alternatives with respect to the Company’s tobacco assets”. Beneath the corporate jargon is an admission that the company’s ultra-low nicotine cigarettes are not selling as well as expected. Some analysts think it is a prelude to a federal bankruptcy filing. The company’s share price peaked at $77 in 2021 and is currently trading at $1.25.

It is not long since XXII was a darling of public health groups and the media. The Food and Drug Administration (FDA) did everything it could to help the company. It banned the vast majority of e-cigarettes and threatened to introduce nicotine limits in cigarettes that only XXII could comply with. It officially classified two of XXII’s very low nicotine cigarette brands — VLN King and VLN Menthol King — as “modified risk tobacco products”, thereby giving the company the unique privilege of being able to market their cigarettes with health claims. The FDA also bought 28 million of their cigarettes to use in research.

As could have been easily predicted, smokers did not share the FDA’s enthusiasm for cigarettes that contain barely any of the active ingredient. There is some demand for non-alcoholic beer because people need something to drink, but cigarettes without nicotine are pointless beyond measure. Vaping has thrived because e-cigarettes deliver the addictive but otherwise benign drug nicotine without delivering the toxins, carcinogens and carbon monoxide that come from setting something on fire. De-nicotinised cigarettes do the exact opposite. If e-cigarettes offer harm reduction, de-nicotinised cigarettes offer harm maximisation: all the risk with none of the benefits.  

The idea of taking nicotine out of cigarettes has been around for decades

The idea of taking nicotine out of cigarettes has been around for decades. Every now and again, someone in “public health” proposes it as a backdoor route to prohibition but is talked out of it by a grown up. Only in recent years have they found any politicians dopey enough to seriously consider it. Last year, the New Zealand government announced a new limit on nicotine in cigarettes of 0.8 mg/g, which is around 95 per cent lower than in an average cigarette and similar to the “non-addictive” levels found in XXII’s FDA-approved products. While even the fanatics at Action on Smoking and Health have their doubts about whether this is a wise move, the UK’s the shadow health secretary Wes Streeting has expressed interest in the Kiwi approach and the FDA still intends to make cigarettes “minimally addictive or non-addictive” with legally binding ultra-low nicotine limits.

It is doubtful whether there would be a market for ultra-low nicotine cigarettes even if every other type of cigarette were banned. The smouldering crater of XXII shows that there certainly isn’t a market for them so long as consumers have a modicum of choice. Heavily assisted by the US government, the XXII experiment was supposed to prove that these products were commercially viable, thereby legitimising the FDA’s plans for a legal nicotine limit that would be close to zero. But, as the e-cigarette trade association American Vapor Manufacturers says: “The federal government wasted hundreds of millions of dollars in R&D, despite firm warnings from leading tobacco science experts, outlawed competition, fast-tracked FDA approval, all to help bring a cigarette to market that no one wants.” A company that was once worth nearly a billion dollars now has a market cap of $28 million. “Well, that’s the end of me”, indeed.

Enjoying The Critic online? It's even better in print

Try five issues of Britain’s newest magazine for £10

Critic magazine cover