Global E-Cigarette Industry Weekly Report (4.10-4.16)

In this report, we bring you the most recent developments in the global vaping industry. We cover the latest news on electronic cigarettes, the ban on nicotine, and the investment plans of major players such as PMI and Altria. Our article provides valuable insights into regulatory changes across different regions, including Europe and Asia.

GLOBLE MARKET:

Russia

• On April 6, 2023, Zhao Tong and Xu Minghao, CEOs of Shuangzishang, along with Shuangzishang’s Russian Regional Vice President, met with Russian Academy of Sciences Senior Researcher Men Shaofu Valery and Alexei V. Trofimov, Deputy Director of the Emanuel Biochemical Physics Research Institute in Moscow, to discuss scientific research on e-cigarettes.
• On April 6, the “China-Russia E-cigarette Trade Compliance and Development Exchange Meeting” was held in Moscow. Representatives from the China Council for the Promotion of International Trade – China Chamber of International Commerce, Russian State Duma, Russian Nicotine Alliance, Russian Chinese Entrepreneurs General Chamber of Commerce, and Shuangzishang participated. The participants had in-depth discussions on topics such as China-Russia e-cigarette compliance cooperation, trade promotion, and industrial synergy.
• Consumer electronics information platform Igeekphone reported that as European and American tobacco companies withdraw, Chinese e-cigarettes are gaining a competitive advantage in the Russian market. In 2021, China’s exports to Russia reached 82.5 billion rubles, and it is expected to grow by 35% in 2022, reaching 111 billion rubles.
• On April 13, during an online live broadcast of “Interpretation of Russian E-cigarette Additive Ban Policy” hosted by Shuangzishang, Igor Samborskiy, CEO of BABYLON, one of Russia’s largest compliant distributors, said that he will cautiously observe the situation until September. He said the additive ban has a relatively small impact on the legal market, but it will be more difficult for gray-area Chinese e-cigarette manufacturers after September 1.

• Read more: Russian Parliament Bans Vape Sales to Minors – New Regulations Explained 

United States

• PMI accused Reynolds Tobacco of infringing on its patent and requested the court to permanently ban Reynolds from selling Vuse e-cigarettes. The request was rejected by a federal judge in Virginia on April 10, but Reynolds was ordered to pay patent fees to PMI.

United Kingdom

• On April 6, according to a report by foreign media Express, a survey by the UK Vaping Industry Association (UKVIA) showed that banning flavored e-cigarettes would lead to nearly 1.5 million quitting users returning to smoking cigarettes.
• On April 12, Booker, one of the UK’s largest consumer goods wholesalers, announced the recall of six disposable e-cigarette products under the Elux brand due to manufacturing quality issues.
• Last month, Fimo International launched its first disposable e-cigarette VEEBA in the UK, priced at £5. However, according to Shuangzishang’s observation, VEEBA is being sold at a discount on many e-commerce platforms, with discounts ranging from 30% to 50%. In comparison, the price of Elfbar600 with the same puffs still remains around £5 per piece.
• On April 13, citing betterretailing news, due to “manufacturing quality issues,” after the recall of the related Elux disposable e-cigarette products, another news confirmed that Booker has also issued a recall notice for SKE Crystal and IVG disposable e-cigarette series products.

• Read more: Swap to Stop： UK Government Encouraging Smokers to Swap Cigarettes for Vapes

Other Regions

• On April 7, according to South Korea’s official media Chosun Ilbo, the global e-cigarette market is expected to grow from 1.179 trillion KRW (about 615.4 billion RMB) in 2020 to 2.5 trillion KRW (about 1.3 trillion RMB) in 2024.
• Egypt’s Chamber of Commerce Tobacco Division announced that from April 6, the prices of 10 cigarette brands

VAPE REGULATION:

Russia

• On April 3rd, according to Russian media reports, the Russian State Duma Committee decided on April 3rd to postpone the review of the Tobacco Circulation Bill to April 11th.
• On April 11th, Russia will discuss e-cigarette regulation proposals at the State Duma meeting. The proposals include: banning the addition of flavorings to e-cigarettes; raising the minimum price of e-cigarette liquid; and prohibiting the use of “fancy” packaging for e-cigarette products. Continuous follow-up reporting will be provided.
• On April 11th, the Russian State Duma, with over 99% approval, supported the “Proposal to Amend Certain Legislative Regulations of the Russian Federation.” The proposal aims to tighten Russia’s e-cigarette regulations, including banning e-cigarette flavor additives. Russian market experts provided in-depth analysis of this event.
• Experts in the Russian e-cigarette field were interviewed, stating that the law does not explicitly ban “e-cigarette flavors”; if Russia bans e-cigarettes, the market will become completely illegal and shrink by about half. However, there is still room for maneuver, and industry experts will discuss the specifics of the ban with the Russian government.
• Russian State Duma Chairman Volodin stated on the e-cigarette regulation circulation bill: criminal penalties for illegal sales of e-cigarettes will be increased, and relevant tax laws will be amended to curb e-cigarette consumption.
• On April 12th, Russia plans to implement a national regulatory policy for the circulation of tobacco and nicotine-containing products. The State Duma has passed the relevant bill in its first reading, which clearly includes HNB products represented by IQOS in the licensing regulation. Production licenses will be in place by March 1st, 2024.
• On April 12th, according to Russian media pnp, the Russian government proposed that the production, storage, and supply of cigarettes, tobacco, and electronic nicotine products must obtain national permission. The State Duma passed the bill (No. 310882-8 and No. 310820-8) in its first reading at a plenary session on the same day.

United States

• Since the beginning of this year, officials from the United States Postal Service have stated that they have seized and destroyed about 3,000 packages of smuggled cigarettes, which were originally destined for Connecticut, New York, and other states.
• Hawaii’s new tax bill has been passed by the Hawaii Finance Committee, proposing to amend the tobacco tax law to include e-cigarette products and e-cigarette liquids, and to increase license fees for distributors and retailers. A previous bill aimed at addressing the increase in youth e-cigarette use failed to pass.
• West Virginia has reached a settlement with e-cigarette manufacturer Juul Labs Inc. in a lawsuit, as the company was accused of violating the state’s consumer credit and protection laws. Juul has agreed to pay the state $7.9 million in settlement funds.
• On April 12th, U.S. e-cigarette giant Juul Labs Inc. agreed to pay $462 million in settlement funds to six states, including New York and California, as well as Washington D.C., to assume the allegations of promoting products to minors without authorization.
• On April 12th, at 9:30 AM Eastern Time, the U.S. FDA will hold a public oral hearing on the “Proposed Requirements for Tobacco Product Manufacturing Practices (TPMP).” The hearing will cover requirements and regulations for tobacco production, including e-cigarettes.
• On April 11th, Texas Representative Suleman Lalani introduced a bill requiring all higher education institutions to ban tobacco products and e-cigarettes by August 1, 2024.
• On April 12th, the U.S. FDA Center for Tobacco Products (CTP) posted forms and video resources on its official website, aimed at helping companies prepare and submit their pre-market tobacco product applications (PMTA).
• On April 12th, the U.S. Food and Drug Administration (FDA) Center for Tobacco Products held a public hearing to gather suggestions and opinions on the “Proposed Requirements for Tobacco Product Manufacturing Practices (TPMP).” A total of 18 participants expressed their views, and key points related to e-cigarette manufacturing were summarized.

United Kingdom

• UK Public Health Minister Neil O’Brien will propose a series of measures aimed at combating illegal e-cigarettes and sales to minors. The Independent British Vape Trade Association (IBVTA) welcomed the statement.
• On April 11th, Reuters reported that the UK government plans to encourage millions of smokers to switch to e-cigarettes. According to the plan, nearly one-fifth of smokers will receive free e-cigarette starter kits and smoking cessation support. The government’s goal is to reduce the smoking population from 13% to 5% or less.

• Read more: UK to Distribute 1 Million Free Vapes Aiming for Smokefree by 2030

Asia-Pacific Region

• On April 4th, according to The New Straits Times, the Malaysian government decided to approve amendments to the “1952 Poison Act,” allowing the legalization of products containing nicotine. Prime Minister Anwar Ibrahim promised that the “2022 Tobacco Products and Smoking Pipe Control Act” (“GEG” Act) will be submitted to the House of Representatives in May to ensure comprehensive regulation of products containing nicotine.
• The New Straits Times reported that the Johor state government in Malaysia will maintain its decision to ban e-cigarette products and e-cigarette liquids since 2016.
• On April 11th, Australian Treasurer Jim Chalmers fiercely criticized the “explosive growth” of e-cigarettes among teenagers, hinting to the media that stricter taxes might be imposed on them soon; politicians’ calls for loosening e-cigarette regulations were also opposed by health experts.
• According to local media reports, on April 10th, the Malaysian E-Cigarette Chamber of Commerce expressed concern about the upcoming e-cigarette industry regulatory laws, stating that the association was unaware of the impending regulations. The association also urged the Ministry of Health to discuss the matter with industry participants.
• The South Australian government is considering new laws that would ban the use of e-cigarettes in more outdoor public places and increase fines for selling or supplying tobacco to minors. State officials believe these measures will curb young people’s use of e-cigarettes.

COMPANY NEWS:

• On April 7th, British American Tobacco (BAT) invested $10 million to collaborate with CBD company Charlotte’s Web in developing a drug for treating neurological disorders. This marks the first attempt by a tobacco company to venture into drug development.
• On April 11th, e-cigarette hardware supplier Blinc Group and CBD manufacturer Growpacker jointly released a memorandum of understanding to establish a strategic partnership. This move aims to accelerate their joint development in California.
• On April 13th, tobacco and e-cigarette manufacturer Imperial Brands announced that, over the next three years, the company expects its operating profit growth to accelerate, reaching a median compound annual growth rate. Revenue from new tobacco products in the first half of the year is expected to surpass that of the same period last year.

• Read more: Juul Settles for $462 Million in Youth Vaping Claims – Six States and D.C. Reach Agreement