Vapers hold their breath as EU finalises onslaught on e-cigarette industry
Smoking is a vice to which many law students and practitioners, like other individuals, sadly succumb. Whether it be a hurried puff prior to that daunting LPC property exam or first County Court appearance, cigarettes are often a lawyer’s go-to when the pressure’s on; despite numerous studies indicating that the belief nicotine offers a calming effect is little but a myth.
Having been a smoker for some 15 years, at the start of this year I decided that enough was enough. I was fed up with the tight chest and smelly clothes that inevitably came the morning after Friday night drinks and, at friend’s suggestion, I ordered an electronic cigarette (e-cigarette) from a renowned online retailer. It promptly arrived and thus began my journey into the increasingly popular world of “vaping”.
For the uninformed, vaping is the exercise of inhaling and exhaling vapour, produced by an e-cigarette or similar device, to replicate the sensation of smoking a traditional tobacco product.
And vaping has taken off in a big way. A Public Health England report, published last August, estimates that around five percent of the British adult population now use e-cigarettes.
Whilst vapers were previously content to use relatively inconspicuous and low-powered e-cigarettes, the market for vaping products has exploded over recent years. A subculture of sorts now exists, in which more adventurous vapers (commonly bearded Shoreditch types) push for evermore exotic e-liquids (the flavoured nicotine-containing solutions that are inhaled as vapour) and customisable vaping devices that allow for improved taste, increased vapour production, and a “smoother vape”.
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However, as of next month, all this is set to change due to the commencement of the controversial Tobacco and Related Products Regulations 2016, which serve to transpose the EU’s revised Tobacco Products Directive into domestic law.
The directive repeals existing EU legislation and seeks to better harmonise the regulation of tobacco and related products (in particular e-cigarettes) across member states. Many of its provisions relating to traditional tobacco products have received widespread coverage in the national media. For example, the prohibition of packets containing fewer than 20 cigarettes, prohibition of cigarettes with “characterising flavours” (notably this includes menthol cigarettes) and the inclusion more prominent health warnings on tobacco products.
Regulations to be made in respect of e-cigarettes, despite their popularity, have received considerably less coverage outside of the vaping community, yet are likely to have a significant impact on both the industry and individual vapers alike.
Part 6 of the draft regulations transposes article 20 of the directive and it is these provisions that primarily impact on e-cigarettes. Matters covered by the regulations include the following:
The regulations introduce a requirement by which producers of e-cigarettes and e-liquid refill containers must notify the Department of Health prior to supplying their products to the public. Such notification must be made via a prescribed electronic format, not less than six months prior to commencement of the intended supply.
Following notification, a range of factors will be scrutinised including ingredients, toxicology data, manufacturing processes and components used in respect of products. The notification process will apply to both new and existing products and will also have to be revisited by producers when an e-liquid or e-cigarette has been subject to any “substantial modification” (although this term is not defined in the regulations, which may lead to interpretive ambiguity).
In any event, compliance with the notification scheme is likely to prove difficult to smaller producers commanding limited resources and one struggles to envisage quite how such producers will continue to operate in light of the tightened bureaucracy. Producers of e-liquids, for example, often offer a wide range of flavours, many with only very subtle variants and compiling the necessary data required for each notification is expected to be both a time consuming and expensive task. Such concerns were expressed by producers during the government’s consultation process on the implementation of the directive.
Producers who do survive the regulations are likely to pass the increased costs on to consumers and given that one distinct advantage of e-cigarettes over tobacco products is their lower cost, this poses a concern. If there is no financial incentive for existing smokers to make the jump to e-cigarettes, they may simply opt to continue using tobacco, which is widely regarded as being much more detrimental to health (although, admittedly, debate amongst medical professionals continues in this area).
Product requirements (e-liquid containers)
In addition to the notification scheme itself, the regulations also introduce a number of requirements relating to the notifiable products. It is these requirements that have caused most discontent amongst the vaping community and that are likely to impact upon individual vapers.
E-liquid refill containers will not be permitted to exceed a volume of 10ml. At present, larger receptacles (e.g 30ml or 50ml) are commonplace and consumers will now be unable to benefit from the economies of scale presented through buying in bulk. One may attempt to argue that this issue could simply be overcome through purchasing a vast quantity of 10ml refill containers and that suppliers could offer discounts in this scenario. However, it stands that container manufacturing costs will unavoidably increase and, as touched on earlier, such costs will doubtless be passed on to consumers.
The preamble to the directive suggests that the “10ml requirement” is necessary in order to mitigate the risk of nicotine poisoning, but it is not patently clear how it will assist in this regard. Indeed, over ingestion of nicotine may theoretically be possible not only through the consumption of one large container of e-liquid, but also several smaller containers. The preamble also refers to health risks posed to children, in the event they inadvertently come into possession of e-liquid containers and this is obviously a matter that requires serious consideration. Again, members of the vaping community have been quick to respond, suggesting that the risk to children is sufficiently addressed through the directive’s requirement for child-resistant containers. They also note that other domestic products, such as household bleach, pose a greater risk to children yet are sold in much larger receptacles.
Product requirements (e-cigarette cartridges and tanks)
In addition, the volume of e-cigarette cartridges and tanks (the part in an e-cigarette that holds the e-liquid) will be limited to 2ml. Many e-cigarette tanks currently on the market considerably exceed this capacity, and producers will now have to seriously revise existing designs in order to continue to sell to the UK market. As with the “10ml requirement”, it is difficult to see any justification for imposing a limit on tank/cartridge capacity. All it is likely to lead to is an increase in the frequency vapers are required to refill their e-cigarettes and it will necessitate that they carry refill bottles with them because of the imposition of impractically small tanks.
Curiously, the directive’s efforts to scale down vaping paraphernalia run contrary to its efforts to scale up cigarette packets and one questions quite why there should be disparity in this regard.
Product requirements (potency of e-liquids)
It is also worth noting that e-liquids will be required not to contain nicotine in excess of 20 milligrams per ml. Unlike the above this regulation has not caused much controversy, although initially those transitioning from smoking to vaping often require e-liquids with a higher nicotine content in order to satisfy their cravings.
Information and packaging requirements
E-cigarettes and e-liquids will have to be supplied with a leaflet, setting out detailed information on criteria such as use and storage, possible adverse side effects and toxicity.
Additionally, a list of ingredients (where applicable) will have to be included on packaging, along with a prescribed health warning. Revisions to existing packaging will only serve to add to production costs which, again, will likely be borne by consumers.
In respect of product advertising, the requirements of the directive will be transposed not only through the regulations, but also via changes to the Communications Act 2003, Ofcom BCAP Code and Ofcom Broadcasting Code. The government has indicated that in line with the directive, products may no longer be advertised on television, radio; society services (e.g. internet advertising and commercial email) and in printed publications such as newspapers and magazines. Certain product placement and sponsorship activities are also prohibited under the existing draft advertising regulations.
The legislative picture remains somewhat uncertain, but what is obvious is that suppliers will be heavily hit by the stringency of the anticipated advertising provisions.
Other provisions and enforcement
In addition to the above, the regulations also provide for an annual reporting requirement (that broadly requires producers to submit comprehensive sales data), vigilance requirements (requiring producers to collect and report information on unsafe products) and government powers to prohibit the production/supply and require a recall of any products considered to pose a serious risk to human health.
The provisions implemented are not to be taken lightly, with breaches of part 6 of the regulations constituting a criminal offence, punishable by imprisonment of up to two years and/or a fine.
It is quite apparent that the introduction of the regulations is going to considerably stifle the production and supply of e-cigarettes and e-liquids. Many vapers have responded angrily through social media and a government petition was mounted last year, receiving over 18,000 signatures.
Producers and suppliers have also sought recourse with e-cigarette company, Totally Wicked, challenging the lawfulness of article 20 of the directive at the Court of Justice of the EU in Luxembourg.
The company’s challenge against article 20 is based on four grounds:
1. it imposes a series of obligations which infringe the principle of proportionality, read in conjunction with the principle of legal certainty (i.e the provisions are overly restrictive and imprecisely formulated)
2. it fails to comply with the principle of equality and/or unlawfully distorts competition (by placing e-cigarettes at a competitive disadvantage against tobacco products)
3. it fails to comply with the principle of subsidiarity (i.e. individual member states could have regulated products themselves, without EU legislation) and
4. it infringes the rights of electronic cigarette manufacturers or retailers under articles 16 and/or 17 of the EU Charter of Fundamental Rights (which concern the freedom to conduct business and the right to property (including intellectual property) respectively).
Unfortunately, on 23 December 2015, the Advocate General concluded that nothing submitted by Totally Wicked had revealed any factors such as to affect the validity of article 20 and, whilst not binding, her conclusion will clearly influence the court and be of disappointment to producers and suppliers. The court’s decision is expected early next month, prior to the 20 May 2016 directive implementation date.
In the meantime, the vaping community (and please excuse the pun) holds it breath. Although the regulations have not yet been finalised, a curtailment to the industry and products available to vapers now appears very likely. This said, Totally Wicked’s challenge, whilst down, is not yet out and the question as to the appropriateness of tackling e-cigarettes within a directive principally aimed at tobacco based products still remains live for the time being.
John-Mark Tawadrous is a self-employed consultant solicitor.