In recent years, the disposable e-cigarette market in Europe has rapidly grown, but it has also exposed disorderly practices due to a lack of regulation. The industry's unchecked expansion has raised concerns among the public, with the focus mainly on negative issues such as attracting youth, environmental pollution, and health impacts.
To address these concerns, regulatory agencies in many European countries have begun to take strict measures. For example, Germany has heavily taxed e-liquids, the UK has taken large amounts of non-compliant products off the market, Russia has banned the use of flavor additives, and Portugal has fully prohibited flavored tobacco products. These measures have made the future of the disposable e-cigarette market uncertain.
Are disposable e-cigarettes losing their popularity? The European market manager for VOOM brand, Vincent, shared with 2FIRSTS at the electronic cigarette exhibition in Stuttgart, Germany that due to an increase in Germany's tobacco tax, the cost of disposable e-cigarette products has risen. Consequently, distributors are no longer as welcoming of these types of products as they once were.
According to estimates, a 10-milliliter bottle of e-liquid in Germany currently costs around 10 euros (including value-added tax). Once the e-cigarette tax is added, the price will increase by 1.6 euros, and with the value-added tax, it will rise a total of 1.9 euros. Germany's e-cigarette taxes will gradually increase each year, and by 2026, the price of disposable e-cigarette products in Germany will double.
Exclusive analysis of Germany's projected tax revenue from electronic cigarettes, sourced from 2FIRSTS data.
Simon Bauer, chairman of the German Association of Smoke-free Alternatives (BVRA), believes that besides the rising cost, disposable e-cigarettes face two major challenges in the European market - environmental protection and youth smoking. The constantly increasing regulatory risks further weaken the market. He suggests that Chinese manufacturers abandon disposable e-cigarettes and focus on other types of electronic cigarette products.
Single-use electronic cigarettes are not only facing criticism in Germany, but also in the UK due to concerns over environmental impact and excessive levels of e-liquid. At a Birmingham electronic cigarette trade show in the UK, 2FIRSTS spoke with several brand representatives about the market trends for electronic cigarettes. Some brands expressed that the development of single-use electronic cigarette products is facing difficulties and that there may be a shift in the dominant category within the electronic cigarette market in the future.
Who will be the next players in the e-cigarette industry after disposable e-cigarettes? And if disposable e-cigarettes are phased out of the market, where will the new opportunities lie? The answer, according to the German and British markets, is pod vape products.
The Managing Director of Aquavape, a UK-based distributor, recently stated in a report that the electronic cigarette industry is shifting towards pod vape products. He predicts that the market share of this product in the UK will surpass £500 million.
At the electronic cigarette exhibitions in Stuttgart, Germany and Birmingham, UK, 2FIRSTS interviewed various manufacturers, many of whom expressed the belief that the development of disposable e-cigarettes is approaching a turning point, with pod vapes potentially benefiting from this shift. Vincent, the responsible party for VOOM's Western European market, stated that demand for disposable e-cigarettes in Germany is decreasing and the market is shifting towards refillable products.
During a visit to retail stores in Germany, 2FIRSTS found that many store owners hold the same opinion on this matter.
Photo source: 2FIRSTS, a German e-cigarette shop.
It is worth noting that on May 12th, 2FIRSTS learned from the Moscow News Center that NICTON, a Russian company specializing in electronic cigarettes, stated at a meeting that e-cigarette users enter the market with disposable products but then gradually shift towards open systems after developing consumption habits. This perspective also confirms the development challenge faced by disposable electronic cigarettes.
Meanwhile, several well-known disposable e-cigarette brands have launched their own e-liquid lines in the European market, such as ELFBAR, ELUX, and KIWI. ELFBAR and ELUX have both stated that the purpose of introducing disposable e-liquid brands is for environmental and user experience reasons. The trend of top disposable e-cigarette brands entering the e-liquid market seems to confirm industry expectations beyond disposable e-cigarettes.
According to regulations in the European Union and the United Kingdom, the capacity of e-cigarette liquid cannot exceed 2 milliliters. This has resulted in only small e-cigarettes being sold in the European market. Some manufacturers have risked violating this regulation by injecting over-capacity liquid, while the environmental impact of disposable e-cigarettes has become more pronounced due to their small size. However, the replaceability of pod vape products can fill this gap left by disposable e-cigarettes. It is expected that pod vapes will become an important measure to curb violations and pollution in the disposable e-cigarette industry.
Could Germany become the first market in Europe to abandon disposable electronic cigarettes?
After the transitional period for e-cigarettes in Germany ended, regulatory authorities began rigorously inspecting retail stores for tax evasion issues related to the products. During the Stuttgart e-cigarette exhibition, German Customs carried out surprise inspections and took action against exhibitors who did not have tax markings on their products through fines and arrests. According to a notification from German Customs, they inspected 15 booths and found that 11 of them had violated regulations. These exhibitors avoided €46,000 in tobacco tax by engaging in commercial transactions of taxable products.
The German customs conducted an inspection at the exhibition | Image source: 2FIRSTS
The chairman of the German E-cigarette Association, Simon Bauer, has stated that if the German customs department increases its personnel to conduct searches, more exhibitors will be penalized at the trade fair. In addition, since the German customs cannot arrest and prosecute foreign nationals, they will impose substantial fines on them.
Simon Bauer told 2FIRSTS that the German government's insistence on implementing an electronic cigarette tax policy has not only led to the thriving of the black and grey market for e-cigarettes, but also caused a significant impact on the retail industry. "Currently, almost half of Germany's e-cigarette retail stores have closed down.
It's not surprising that the direction of electronic cigarette products in Germany is changing due to the high tobacco taxes and environmental pressures. However, the development trend of the electronic cigarette market in Germany still needs to be determined by market demand and consumer choice, which will ultimately decide the future of pod vape in the country.
Vincent, the person in charge of VOOM in the European market, stated that...
The electronic cigarette market in Germany is substantial. Despite increasing taxes and rising costs for electronic cigarettes in Germany, businesses in the industry are not giving up on the market and are working hard to adapt to policy changes.
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