How the European legislation is expected to affect the Electronic Cigarette business
You have probably heard that the bureaucratic machine in Brussels has finally decided to lump e-cigarettes (e-cigs) into its latest Tobacco Products Directive (TPD), thus regulating them officially for the first time. So what does this mean for the ecig industry? Is it an opportunity or a threat? Sadly rather more of the latter than the former, unless you are part of Big Tobacco, so here is some background and an outline of the proposals and how and when they may be implemented.
Until now ecigs have been regulated by general trading standards regulation as they are not medicines, despite the attempts to have them classified as such, or a tobacco product, or at least not in a way that such a classification has always meant to apply. However the commercial interests of the pharmaceutical industry and the tobacco industry, with their enormous resources for political lobbying and PR, have prevailed in Brussels to include ecigs in EU tobacco legislation so that they will be specifically regulated for the first time.
A ‘Directive’ is a method of controlling legislation across the EU by laying down certain end results that must be achieved in every Member State; it is effectively a pan-EU law that all countries must obey. Once in place each EU country must duplicate the legislation; a country may introduce stricter laws in this process, but not laws that are more lax or more permissive.
All sales and marketing of tobacco in the EU are controlled by the Tobacco Products Directive, which is the core regulatory instrument for these products. This directive controls what products may be sold, how they may be sold, and how they may be marketed in the EU. No EU country can sell or market tobacco-related products unless as regulated by the TPD.
The TPD, as it pertains to ecigs, is an unfortunate mish-mash of ill-thought-out, illogical and irrelevant measures, the end result of which, should they be fully implemented, would effectively be to restrict the ecig market to pre-filled cartridges on cig-a-like batteries.
The main proposals in essence are:
- E-liquid to be supplied in refill containers not exceeding 10ml, disposable ecigs or in single use cartridges;
- Electronic cigarettes and the refill containers must be protected against breakage and leakage and have a mechanism ensuring leakage free refilling;
- Cartridges or tanks shall not exceed a volume of 2ml;
- E-liquid not to contain nicotine in excess of 20mg/ml;
- Various regulations on quality control and permitted ingredients in e-liquid;
- Various regulations on labelling and the like;
- No advertising permitted, as with tobacco cigarettes;
- No cross-border sales – ie you cannot sell from one EU country to consumers in another;
- Manufacturers and importers of ecigs to submit full sales data and information on which consumer groups use their products.
In practice, the following will be banned or probably banned:
- All currently available refillable products (just about every tank, clearomizer, cartomizer etc)
- Rebuildable mods and replaceable heads
- Vari-volt and vari-watt products would be either banned or reduced to a very few models indeed as the testing regime would be enormously expensive.
E-liquid flavours as such are not banned but the high cost of complying with the regulatory framework under which they must be produced will greatly restrict the number of possible suppliers and the range available.
It does rather seem that the TPD is designed to protect Big Tobacco’s entry into the ecig market and negate the competition from smaller and innovative newcomers, competition which is severely eroding the conventional tobacco market. The pharmaceutical industry aren’t too worried either, as they make their money from the illnesses caused and exacerbated by smoking, and the largely ineffective smoking cessation products they sell. And who will most likely be looking after the UK’s implementation of the TPD? None other than the Medicines and Healthcare Products Regulatory Agency (MHRA), a QUANGO largely funded by …. the pharmaceutical industry!
Finally, each national government must pass laws which implement the detail of the Directive, but can be stricter if they wish to, as with the various countries that straightforwardly ban ecigs. Of course in the UK we like to do things properly and then actually abide by the laws which are properly enforced, which is not always the case elsewhere in the EU.
What is the timetable for all of this? The TPD was passed by the European Parliament in April 2014, came into force on the 20th May 2014, and must now be implemented by law in all of the individual EU countries by the 20th May 2016. There is however a provision for ecigs which delays the relevant articles by six months to the 20th November 2016. And then any ecig products on sale at that date (but not new products introduced afterwards) may continue to be sold until the 20th May 2017.
Is there any good news? Well not much if this all proceeds as it stands, but I am somewhat sceptical that it will. Regulation of the quality of hardware and e-liquid can only improve the standing of our business and consumer confidence in it, which must be a good thing. But can the detail of the TPD really be implemented? Take the clause specifying the necessity that “Electronic cigarettes and the refill containers are protected against breakage and leakage and have a mechanism ensuring leakage free refilling”; can that really be drafted in any realistically enforceable way?
We can but hope that when it actually comes down to drafting enforceable legislation, the difficulties of reconciling the TPD, much of which conflicts with other EU laws and directives, which in reality may well prove a stumbling block. There is every chance that legal challenges will be made to the legislation, although the pockets of those defending the TPD, ie Tobacco and Pharma, are effectively a bottomless pit of money and those who might oppose have limited resources; and in law, of course, money talks. And then our relationship with the EU and its legislative process is not exactly an immovable feast as it currently stands.
What can you do? Lobby your MPs and MEPs like crazy, because this legislation is crazy, and sign up to the European Free Vaping Initiative ( http://www.efvi.eu/ ) – and get all of your friends and family to do likewise. Look out for and support Trade Associations, and if there is a credible request for crowdfunding of legal action then please donate.
So watch out for what’s happening, and make sure you are able to give your opinion on what’s happening in the future of your E-Cigarettes.
Written by Tony Price, Managing Director of Volcano EU