Amongst other restrictions, a new bill going into effect on May 1st, will ban 122 flavours as proposed by the State Tobacco Monopoly Administration, including numerous fruit and alcohol flavours. The draft rules amend the country’s tobacco monopoly, extending it to e-cigarettes, forcing local businesses to register with the tobacco authority. Moreover local manufacturers must obtain an additional license to prove they are in possession of sufficient funds for production, and for a facility and equipment that meet the set standards.
The tobacco authority added that it will establish a “unified national electronic cigarette transaction management platform” that all licensed e-cigarette wholesalers and retailers must sell products through.” This would facilitate tax collection and payment of e-cigarettes, which “shall be implemented in accordance with national taxation laws and regulations.”
Market research firm Forward Industrial Research Institute, recently reported that in China, there are approximately 1,500 vape manufacturers and brand enterprises and over 100,000 e-cigarette supply chains and related service enterprises, providing employment to an estimated 5.5 million people. The research firm also found that in 2021, the domestic e-cigarette sales totaled about 19.7 billion yuan ($3 billion), with an annual growth of 36%.
The industry’s reactions to the new vape laws
Naturally, the local vape industry is not optimistic. Similarly, John Dunne, Director general of the UK Vaping Industry Association (UKVIA) believes the industry will be affected negatively. “I think in its current form the legislation will have a massive influence on the industry both domestically and internationally, but not all in a good way.”
While Wang Ning, the President of China’s Electronic Chamber of Commerce said that these laws should benefit the whole industry. “Soliciting opinions on revisions to the Tobacco Monopoly Law and regulating the e-cigarette market should be beneficial to the entire industry.”
The China National Tobacco Corporation (CNTC), which sells about 40% of the world’s cigarettes is the world’s largest tobacco company and is fully owned by the Chinese government. Filter has recently explained that this means that the government has a lot to gain from expanding the market of vaping and heated tobacco products, especially given that 90% of the world’s vape products are manufactured in China.
Chairman of Shenzhen Shikai Technology Wang Shenyi reiterated that done right the regulations could lead to better market. “We can look at the next management measures or national standards in a way that won’t restrict the industry’s development, but in a way that better supervises and regulates the market to make it healthier and better in the long run.”
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