Two US e-cigarette makers moving production from China

Updated: 2014-05-29 08:59

By JACK FREIFELDER in New York (China Daily USA)

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Two US-based electronic cigarette makers plan to shift assembly of their product to the United States from China to improve quality control and profitability, and, according to one of the company CEOs, to also remove"the stigma of working in China".

Mistic Electronic Cigarettes in Charlotte, North Carolina, and White Cloud Electronic Cigarettes in Tarpon Springs, Florida, announced their moves last month.

Most e-cigarettes are made in China, where the battery-powered cartridge used in them was invented.

Mistic makes the liquid for its e-cigarettes in the US and then outsources it to China where the product is assembled.

John Wiesehan Jr, CEO of Mistic, said eliminating the product’s assembly in China would help Mistic improve"supply-chain efficiency" and profitability.

"There are a lot of business factors at play for what we’re doing," Wiesehan said Wednesday in an interview with China Daily."We’re very happy with the factory we use and we’re still going to be doing business with China, but we’ll just end up finishing the product here."

"The stigma of working in China was not a main reason, but it was one of many factors," he said.

The general manager of a US-based manufacturer of the liquid used in e-cigarettes that works with e-cigarette manufacturers in China, who asked that neither his name nor the name of his company be used, told China Daily that his company also plans to move from China because of what he said is a bias in the US against"made in China" products.

"When people think about something made in China, they do think about … less than high-quality products," he said."It couldn’t be further from the truth, but it’s hard to convince the consumer."

"Even though we control the production, there’s still a stigma since some of our products are made in China," he said."That’s what we want to do away with."

In a story last month about Mistic and White Cloud moving assembly of their e-cigarettes out of China, Reuters said"many companies are pleased with production in China and have no plans to move their operations."

Mistic’s CEO said the company will continue to import materials for its e-cigarettes from its partners in China, including the cartridges and battery components.

Mistic’s e-cigarettes are sold in close to 40,000 locations in the US, including Wal-Mart and Dollar General stores.

White Cloud, which also makes its e-cigarette liquid in the US, has indicated interest in moving the cartridge-filling process to the US from China.

"By moving our cartridge filling to the US, we’re better able to ensure every one of our cartridges meets standards for flavor, vapor and longevity," White Cloud co-founder Matthew Steingraber said in a statement."White Cloud is known for its product quality and … this move will only help us build on that reputation."

Neither e-cigarettes nor e-liquids are regulated by the US Food and Drug Administration (FDA).

Supporters of e-cigarettes say they are a safer alternative to tobacco-laden cigarettes, due to the lack of tar, but there is little data on the long-term health effects of the products.

On April 24, the FDA issued a proposal calling for more authority to police tobacco products, including a number of now unregulated items like e-cigarettes. The FDA already monitors cigarettes, cigarette tobacco and smokeless tobacco.

Jennifer Haliski, a tobacco product regulation spokeswoman and public affairs specialist for the FDA, said there would be no regulation of e-cigarettes by the agency until the proposal is finalized.