Global E-Cigarette Industry Weekly Report (3.27-4.02)

This report covers the latest updates on the global tobacco industry, including news on electronic cigarettes, nicotine bans, and investment plans by major companies such as PMI and Altria. The article provides insights into regulatory changes in various regions, such as Europe and Asia, and reports on the financial performance of industry players like Huabao International and China Botton. If you’re interested in keeping up with the latest trends and developments in the tobacco industry, this article is for you.

Global Market:

Europe

• On March 30th, Ecigator visited the electronic cigarette distribution center in Manchester, UK to learn about the impact of the ELFBAR “excessive nicotine” incident on local dealers. Some dealers stated that many specialty stores are no longer purchasing the involved products; while others claimed that ELFBAR’s sales have actually increased since the incident.
• On March 31st, two sources informed from IQIYI that ELFBAR had entered the French market for the first time in February, and plans to be stocked in 4,000 retail stores. Distributors include SPF (Fimar-Marty, Pipal, SPP, and Socopi).
• There are about 900,000 cigarette users in Finland, and the country has strict regulations on electronic cigarettes, which has led to the flourishing development of nicotine replacement therapies (NRT) such as chewing gum and nicotine patches. These products can be easily purchased nationwide without a prescription.

Asia

• On March 27th, IQOS ILUMA launched its first collaborative accessory, the IQOS ILUMA x kolor limited edition accessory, which was officially released in eight IQOS stores in Japan.

China

• On March 22nd, the Hong Kong Special Administrative Region government announced that it will publish the “2023 Import and Export (Amendment) Regulations”, allowing alternative smoking products (referring to electronic cigarettes) to be shipped overseas through sea, air, and land transportation via Hong Kong. The draft regulations will be submitted to the Legislative Council for review. Two sources will continue to report on this issue, so stay tuned.
• On March 27th, the Qinghai police cracked a series of illegal electronic cigarette sales cases, seizing over 372,000 non-standard electronic cigarette cartridges and devices, involving an amount of up to 150 million yuan.
• Recently, the Jiangjin District Public Security Bureau in Chongqing, in collaboration with the local tobacco monopoly bureau, successfully cracked down on an illegal electronic cigarette production and sales network involving 75 suspects. This is the first typical case of a comprehensive crackdown on the integrated production, supply, and sales of illegal electronic cigarettes in the Southwest region.

South America

• On March 24th, Cuban media reported that tobacco production in the province of Pinar del Río is facing huge difficulties. Due to the impact of hurricanes, it is expected that the province’s harvest in 2023 will be difficult to reach half of the planned target (11,200 hectares).
• According to statistics from the Tobacco Industry and Marketing Board (TIMB) in Zimbabwe, the rejection rate of tobacco auctions in Zimbabwe is 60.78% higher than the same period last year. According to a research report by China’s Ministry of Commerce, Zimbabwe is the largest tobacco exporting country in Africa and the second largest tobacco exporting country in the world after Brazil, with an export rate of 99% of its annual production. It is reported that the country’s tobacco is exported to 34 countries, and China is the largest consumer country.
• According to the Sounds and Colors report data, the annual growth rate of the disposable e-cigarette market in Latin America is expected to reach 5.74% in 2028.

Others

• On March 25th, the state-owned Eastern Tobacco Company in Egypt raised the average price of a pack of cigarettes, cigars, and pipe tobacco by 2-3 Egyptian pounds (about RMB 0.44-0.66) per pack.

Vape Regulation:

Americas:

• On March 23, the US Food and Drug Administration (FDA) launched a new webpage on its official website to showcase all citizen petitions related to tobacco products received by the Center for Tobacco Products (CTP) to enhance FDA review transparency.
• According to KITV, a Hawaii media outlet, the state’s ban on flavored tobacco products bill (HB511) did not schedule a hearing before March 23, indicating that the bill will not continue to be pushed in the state legislature. This means that Hawaii will not temporarily ban flavored e-cigarette products.
• According to mystateline, the Illinois State Senate passed a bill this week that aims to ban the use of e-cigarettes and other nicotine-consuming devices in public places.
• Minnesota began selecting jurors for the JUUL and Aspire lawsuits, formally launching the litigation against JUUL and Aspire, with the trial expected to conclude on April 14.
• The House Oversight and Reform Committee of the United States began an investigation into the FDA’s Center for Tobacco Products (CTP). During the investigation, the committee made six requests to the FDA and suggested that it disclose a list of products under review.
• The Vermont State Senate preliminarily approved a bill (S.18) that would ban flavored tobacco and e-cigarette products, which will be sent to the House of Representatives for further review.
• The Kansas State Senate passed a bill raising the minimum legal age for purchasing, selling, or owning tobacco products such as cigarettes and e-cigarettes from 18 to 21 years old.
• Recently, the Georgia State Senate passed bill SB47, which prohibits the use of e-cigarettes in public places.
• Canadian police have uncovered multiple cases of e-cigarette use among minors. The Canadian Vaping Association believes that the punishment for retailers who sell to minors is too lenient, which has led to an increase in underage e-cigarette use.
• Argentina’s National Ministry of Health has issued Resolution No. 565/2023 in the official gazette, stating that it will ban the import, distribution, marketing, and promotion of heated non-combustion products (PTCs). Argentina has been completely banned e-cigarettes since 2011.

United Kingdom:

• Duncan, the chairman of the UK Vaping Industry Association (UKVIA), stated that approximately 459 million e-cigarette products are sold annually in the UK, causing serious environmental pollution, so measures to reduce tobacco hazards should include the management of e-waste.
• The UK Vaping Industry Association (UKVIA) held an e-cigarette industry conference in Churchill Hall in London in April, where Adam Afriyie, a member of the UK House of Commons, and two Suprem executives, Jason, were invited to attend. Adam Afriyie stated that if the problem of underage disposable e-cigarettes and illegal sales in the UK market is not resolved, he will support the ban on disposable e-cigarettes.
• According to reports from The Sun and The Daily Mail, the UK may ban disposable e-cigarettes. The country’s Minister of Public Health, Neil O’Brien, has announced new measures to crack down on disposable e-cigarette products and counterfeit nicotine products, which may lead to a ban.
• According to derbyshiretimes, since June 2022, Derbyshire County Council’s Trading Standards Committee has seized more than 8,000 illegal e-cigarettes from about 60 local businesses. The data shows that public complaints about merchants selling non-compliant products have increased fivefold in the past year.

Russia

• On March 23, Moscow time, Russian Prime Minister Mishustin announced during a national Duma meeting that he would consider the proposal to ban e-cigarettes put forward by the Speaker of the House and representatives. In response, Russian e-cigarette industry expert Liang Jiasen stated that Russia has already implemented a strong regulatory model for the e-cigarette market using “honest labeling,” and the regulatory effect will be tested after April 1. If the regulatory measures are effective, Russia is likely to continue using “strong regulation” instead of “full prohibition”; if the illegal e-cigarette market continues to flourish, then the possibility of banning e-cigarettes in the country is very high.
• On March 29, it was reported that the Eurasian Economic Union (EAEU) had established a unique numbering structure for goods transportation using navigational seals. This includes alcoholic beverages, cigarettes, tobacco products (including e-cigarette products).

Other Regions in Europe

• Recently, Belgian Health Minister Frank Vandenbroucke officially announced a nationwide ban on nicotine pouches.
• According to the Latvian TV station on March 23, Latvia will ban flavored e-cigarettes and nicotine products that look like candy, snacks, toys, and other similar products. It is reported that Latvia is one of the countries in Europe with the highest number of smokers, with over one-third of its adult population smoking.

Asia

• Recently, the Philippines National Tobacco Administration (NTA) proposed including tobacco in the 2016 Anti-Agricultural Smuggling Act to curb tobacco smuggling in the country.
• On March 28, the Poisons Board of Malaysia announced that it would hold a meeting to discuss removing nicotine from the Poisons Act. If this proposal is approved, Malaysia will allow the legal sale of e-cigarettes.
• On March 29, the Malaysian E-Cigarette Retailers Association (MRECA) expressed support for the government’s regulatory measures for e-cigarette products and believes that removing nicotine from the Poisons Act’s controlled list is a positive signal.

Company News:

Philip Morris International (PMI)

• On March 27th, it was reported that PMI’s Korean factory, Yangsan Plant, has invested over KRW 300 billion (approximately RMB 1.6 billion) in the production of heated tobacco products since 2017, ensuring that the Korean market demand is met.
• According to Argentinian media Clarin on March 29th, due to the country’s recent ban on heated tobacco products, PMI’s subsidiary, Massalin Particulares, announced the suspension of its plan to invest $300 million in producing IQOS in Argentina.

BAT

• On March 23rd, British American Tobacco (BAT) released its annual report for 2022, showing a 2.2% increase in revenue to GBP 27.23 billion (approximately RMB 288.68 billion) and a 5.5% decrease in adjusted profit to GBP 9.9 billion (approximately RMB 105 billion). BAT’s vaping product revenue increased by 33% to GBP 1.25 billion (approximately RMB 13.25 billion) in 2022.

Huabao International

• On March 31st, Huabao International released its annual report for 2022, reporting a 1.4% YoY decrease in sales revenue to RMB 3.829 billion. The company plans to focus on producing heated tobacco products and expanding into overseas markets in the future.

Other Companies

• To ensure growth in the coming years, Korean phone accessories maker, Elentec, plans to transform its business focus to include e-cigarettes and home energy storage systems (ESS). The company’s e-cigarette business is expected to grow by 10% to KRW 319.3 billion (approximately RMB 1.7 billion) next year.