NZ Govt Signs $500K Vape Contract with Former Legal Rival Alt NZ

Health NZ Vape Contract, Alt NZ Limited, Vapo New Zealand

Health NZ has partnered with Alt NZ Limited to supply free vapes for smoking cessation, despite the company having sued the Ministry of Health five times over nicotine limits.

Health NZ has awarded a $500,000 contract to Alt NZ Limited to supply over 7,000 vape kits for a national smoking cessation program. The partnership is highly controversial, as Alt NZ spent the past two years locked in a bitter, five-part legal battle with the Ministry of Health over the government’s decision to drastically lower maximum nicotine limits. Despite criticism from anti-vaping groups, Health NZ maintains the procurement process was open and compliant.

The $500,000 Procurement and Vetting Process

In December of last year, Health NZ finalized a half-million-dollar contract with New Zealand-owned vape company Alt NZ Limited (Alt). The initiative is designed to distribute free, compliant closed-pod vape kits to 29 national stop-smoking services to help adult smokers transition away from combustible tobacco.

The contract award has drawn intense scrutiny due to the adversarial history between the two parties. Health NZ defended the decision, stating that an open procurement process was conducted. The core requirements for the supplier included:

  • Supplying devices compliant with the government’s set nicotine strengths (maximum 28.5 mg/mL).
  • Having no conflicts of interest with existing tobacco control policies.
  • Demonstrating a history of good compliance over the past four years under the Smokefree Environments and Regulated Products Act 1990.

Associate Health Minister Casey Costello distanced herself from the specific contracting process but expressed support for utilizing a domestic supplier, noting that “the latest international research has reiterated that vaping is an effective quit tool for adult smokers.”

The controversy stems from a prolonged legal dispute that began when the Ministry of Health moved to rewrite the law to lower the maximum allowable nicotine level in vaping products from 50 mg/mL to 28.5 mg/mL. Prior to this, a misinterpretation of the law regarding nicotine salts allowed retailers to sell products nearly twice the intended strength.

Between 2023 and 2025, Alt took the Ministry to court five separate times. Alt director Jonathan Devery argued that their best-selling products (which accounted for 85% of their revenue) were stronger than 28.5mg/mL, and that evidence showed higher strengths were more effective for smoking cessation. He cited a University of New South Wales clinical trial indicating that a 40mg/mL variant was three times more effective than traditional nicotine replacement therapy.

The Ministry fundamentally disagreed, arguing that significantly higher levels of nicotine increased the risk of addiction, and that 28.5 mg/mL was sufficient to help smokers quit. Ultimately, the courts dismissed Alt’s attempts to block the new regulations, though costs were awarded back and forth during the proceedings.

Compliance Concerns and “Skirting the Law”

Adding to the controversy are compliance issues surrounding Vapo, a sister company owned by the same founders as Alt. Vapo has faced regulatory scrutiny for allegedly skirting advertising rules. Incidents include:

  • Promoting vape sales via delivery apps on window frontages (which was removed after Ministry intervention).
  • Selling ambiguously named flavors like “sweet mint” and “sweet tobacco” that may violate limitations imposed on general retailers.
  • Operating “VapeCycle” recycling and phone charging stations at festivals, which the Ministry warned could be perceived as prohibited product promotion.

Calvin Cochran from the lobby group Vape Free Kids criticized the government’s choice of partner, stating it seemed “odd” to award a contract to a company that fought so aggressively to keep “extremely high” nicotine levels on the market.

Expert Verdict: A Pragmatic but Politically Risky Alliance

The partnership between Health NZ and Alt NZ Limited highlights the complex reality of tobacco harm reduction policy. From an operational standpoint, Health NZ secured a domestic supplier capable of delivering compliant devices for a vital public health initiative. However, from a political and optics perspective, awarding a $500,000 contract to a company that repeatedly sued the government—and whose sister company has skirted advertising regulations—exposes the Ministry to significant criticism from anti-vaping advocates. The success of this program will depend heavily on Alt’s strict adherence to the 28.5 mg/mL step-down protocol and flawless future compliance.

Matthew Ma
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