Trends and Regulations in the UK and EU Electronic Cigarette Industry

On June 15th, 2022, the "6th standardized development promotion conference of the electronic cigarette industry and the first export service development conference" was held in Bao'an, Shenzhen. John Dunne, Chairman of the Board of Directors of the UK Vaping Industry Association (UKVIA), and Dustin Dahlmann, President of the European Electronic Cigarette Association (IEVA), were invited by the E-cigarette Professional Committee of the China Electronic Commerce Association (ECCC) to share recent industry trends and market regulation policies in the UK and Europe.

The British market is currently experiencing a rebound, but there may be a possibility of tighter policies in the future.

At present, the UK remains the second largest market for electronic vaporizers globally, with relatively favorable regulatory policies and no additional taxation on vapor products.

The electronic vaporizer industry in the UK is experiencing a rapid rebound in growth. Following an 11% decrease in market size in 2020, there has been a 20% growth in 2021, with a projected further increase of 11% in 2022. The disposable products sector has seen significant growth. The UK aims to achieve a smoke-free target by 2030, leading to an increasing number of people turning to vapor devices and new tobacco products.

Due to market saturation, prices have dropped. According to data from the global e-cigarette database ECigIntelligence tracking UK brand data, the average price of e-cigarettes has fallen from £5.79 per device to £4.95, putting pressure on wholesale profits. Additionally, with new logistics delivery companies offering late-night delivery services, traditional market channels are also under pressure. However, in this situation, how to ensure age restrictions is a problem that these new services are facing.

There are still public concerns as some disposable brands are using inappropriate marketing strategies to target children. The UK Vaping Industry Association is working with the UK Medicines and Healthcare products Regulatory Agency and law enforcement agencies to identify illegal sellers. Trade regulation officials across the country are taking action, conducting surprise inspections on shops and wholesalers, seizing illegal products and imposing fines on sellers.

The UK's Medicines and Healthcare Products Regulatory Agency (MHRA) may tighten its policies and take a tougher stance against companies that submit fake materials or products that do not meet regulations. This has led to many products being refused approval or requiring longer approval times. The UK group Action on Smoking and Health (ASH) will release a report in June, which could prompt increased scrutiny from regulatory authorities if it shows a significant increase in youth vaping.

The UK Vaping Industry Association has been actively working with numerous Chinese partners, such as Geek Bar and Elf Bar, to shut down counterfeit factories.

Ieva predicts that the revenue of the EU's electronic vaping industry will increase by approximately 20% in 2022.

IEVA is closely monitoring regulatory laws and guidelines in various countries such as Denmark, the Netherlands, and Baltic states where there are bans on flavorings, plain packaging, and advertising. The TPD will undergo at least three more years of revision, and IEVA will continue to keep a close eye on the developments.

By the end of 2023 or early 2024, the European Union will introduce battery regulations. The "New Battery Regulation" aims to achieve sustainability in electronic products, including e-cigarettes. IEVA expects the following changes: batteries will no longer be permitted to be glued to the housing; batteries must be detachable; when a device can still function properly after replacing the battery, the new battery must also be replaceable, and environmentally friendly and reusable devices will become more important in the future.

Another upcoming legislative framework is the revision of the Tobacco Excise Duty Directive. Currently, the EU's excise duty framework does not include electronic cigarettes or e-liquids. However, the review process is underway and IEVA anticipates that the European Commission will announce their position and impact assessment on e-cigarette taxation by the end of this year or early next year at the latest. IEVA is working diligently to minimize the consumer tax burden within the EU.

According to IEVA predictions, the industry revenue in the European Union market is expected to grow by approximately 20% by 2022. Product trends suggest that consumers will seek high-quality and easy-to-use portable devices. Taste and power will be important trends, thus refillable and rechargeable cartridge systems are likely to be the products that best fulfill this demand. On the other hand, disposable products may be a current trend, but they may not keep up with future trends or the emphasis on sustainability in the legal environment.

The ECCC has maintained a strong relationship with UKVIA and IEVA over the years. Going forward, the ECCC will remain in close contact with the world's leading e-cigarette trade associations, deepening exchanges and cooperation in the areas of technology, compliance, market information, and protection for minors. These efforts aim to create a more compliant and favorable development environment for the members of each association.

(Editor: Wang Siyu)