Wicked Wizard Eliquid E cigarette Makers Face Rise of Counterfeits
E cigarette Makers Face Rise of Fakes
E cigarette global sales hit $7 billion at the end of 2014
Global sales of genuine e cigarette products totaled $7 billion at the end of 2014, according to Euromonitor. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES
Feb. 20, 2015 9:09 a.m. ET
LONDON—Liberty Flights Ltd., a British maker of electronic cigarettes, is facing a problem more associated with handbags than with nicotine vaporizers: counterfeiting.
Illicit trade in electronic cigarettes is on the rise across the developed world, according to law-enforcement agencies and makers of the products, adding another layer of uncertainty to a nascent industry bracing itself for a wave of regulation.
Imitation versions of Liberty Flights’ products—which allow users, known as vapers, to heat nicotine-laced liquid for a tobacco-free hit—have started appearing in several markets around the world. The cloned e cigarettes use cheaper materials and are sold at prices well below normal rates.
“We’ve got a brand, we’re well-known,” said Matthew Moden, who founded Darwen, England-based Liberty Flights in 2009 and now runs so-called vape stores across the U.K. and ships to the rest of the world. “The same problem is faced by Louis Vuitton.”
Counterfeiting is only part of the problem. Other tactics used to produce low-price or illegal e cigarettes include bogus batteries that fail to recharge and liquids containing dangerously high levels of nicotine. Forensic experts working for British American Tobacco PLC say they have even seen unlicensed e cigarette versions of their regular tobacco brands, including Kent and Vogue.
“We do see a vast number of substandard products being sold,” said Emma Logan, a director at JAC Vapour Ltd., an e cigarette company based in Edinburgh, Scotland.
Although still a relatively small problem, experts expect illicit trade in e cigarettes will increase as demand grows. Global sales of the genuine products were valued at $7 billion at the end of 2014 (compared with $800 billion for the regular tobacco market) and are forecast to reach $51 billion by 2030, according to Euromonitor International.
That poses a problem for large tobacco companies, including Philip Morris InternationalInc. and British American Tobacco, which have in the past year invested heavily in e cigarettes in a bid to mitigate years of declining sales in regular cigarettes. Nikhil Nathwani, managing director at Philip Morris-owned Nicocigs Ltd., said the “potential to attract illicit trade is a real concern,” even though the current market is “relatively small scale.”
The problem is far more serious for the hundreds of independent e cigarette makers not backed by Big Tobacco. Many say low-price, untested products make their way on to the market and undercut their sales.
Prices for e cigarettes vary widely and currently are subject only to limited, often voluntary regulation. In the Hampstead Vape Emporium in North London, products range from $10 peach-flavored “e-shish sticks” to silver-plated “vape kits” that sell for more than $150.
In some regions such as the U.S. and Western Europe, a black market for the components used in vaporizers—a type of e cigarette with detachable batteries and refillable cartridges—is starting to develop, according to executives at e cigarette companies. Growth in e cigarette sales is being driven by vaporizers—not the old-style cigarette-shaped devices—in most developed markets, meaning demand for low-price components has risen sharply in the past year.
“We’ve seen an influx of cheap, generically branded liquids from China,” said Michael Clapper, international president at U.S.-listed manufacturer Electronic Cigarettes International Group.
Authorities are catching on to the dangers of illicit trade in e cigarettes. In 2014, more than half of the 433 local government authorities in England warned of the risks associated with low-quality e cigarette products, according to a survey by the Trading Standards Institute. A recent alert emailed to residents in the London borough of Southwark on the subject of illicit “e-tobacco” said that “many of the products currently available may not be safe.”
One solution to the growing threat of illicit trade is stricter regulation. European Union directives come into force next year that aim to standardize many features of e cigarettes sold across the region, including a lowering of the maximum nicotine content of the liquid and a reduction in the size of the cartridges.
EU officials say the new regulation is designed to improve the safety of e cigarettes and reduce the number of low-quality or dangerous products in EU countries.
“The commission doesn’t estimate the new measures will have a significant effect on prices and there is no evidence that the provisions will contribute to increased illicit trade,” said Enrico Brivio, spokesman for the European Commission for Health.
But many e cigarette makers say carrying out onerous safety checks would push the prices of their products up and create the conditions for a black market to flourish. “The minute you make the real product more expensive, that’s when the illicit trade really takes hold,” said Ray Story, chief executive of the Tobacco Vapor Electronic Cigarette Association, a U.S. and European industry group. “It’s just the tip of the iceberg.
Wicked wizard e liquid archive 38 "Backgrounder on WHO report on regulation of e cigarettes and similar products". 26 August 2014. Retrieved 2 June 2015.
Global Coordination Mechanism on NCDs
Backgrounder on WHO report on regulation of e cigarettes and similar products
26 AUGUST 2014 - The report on “Electronic nicotine delivery systems” (ENDS), of which electronic cigarettes are the most common prototype, is on the agenda of the 6th Conference of the Parties (COP) to the WHO Framework Convention on Tobacco Control (WHO FCTC), being held 13-18 October 2014, in Moscow.
E cigarettes and similar devices are frequently marketed by manufacturers as aids to quit smoking, or as healthier alternatives to tobacco, and require global regulation in the interest of public health, this new World Health Organization (WHO) report states.
The report states that while e cigarettes represent an “evolving frontier filled with promise and threat for tobacco control,” regulations are needed to:
Impede e cigarette promotion to non-smokers and young people;
Minimize potential health risks to e cigarette users and nonusers;
Prohibit unproven health claims about e cigarettes; and
Protect existing tobacco control efforts from commercial and other vested interests of the tobacco industry.
It explains that while additional research is needed on multiple areas of e cigarette use, regulations are required now to address health concerns, in particular for:
Advertising: An appropriate government body must restrict e cigarette advertising, promotion and sponsorship, to ensure that it does not target youth and non-smokers or people who do not currently use nicotine.
Indoor use: legal steps should be taken to end use of e cigarettes indoors in public and work places. Evidence suggests that exhaled e cigarette aerosol increases the background air level of some toxicants, nicotine and particles.
Since 2005, the e cigarette industry has grown from one manufacturer in China to an estimated US$3 billion global business with 466 brands, a market in which the tobacco industry is taking a greater stake. The report highlights WHO’s concern about the role of the tobacco industry in this market.
The regulations outlined in the report include a ban on e cigarettes with fruit, candy-like and alcohol-drink flavours until it can be proved they are not attractive to children and adolescents. E cigarettes have been marketed in almost 8 000 different flavours, and there is concern they will serve as a gateway to nicotine addiction and, ultimately, smoking, particularly for young people. Experimentation with e cigarettes is increasing rapidly among adolescents, with e cigarette use in this group doubling from 2008 to 2012, the report says.
Among other conclusions, the document found there was currently insufficient evidence to conclude that e cigarettes help users quit smoking or not. Therefore, WHO currently recommends that smokers should first be encouraged to quit smoking and nicotine addiction by using a combination of already-approved treatments.
In addition, the report says existing evidence shows that e cigarette aerosol is not merely "water vapour" as is often claimed in the marketing of these products. While they are likely to be less toxic than conventional cigarettes, e cigarette use poses threats to adolescents and foetuses of pregnant mothers using these devices.
E cigarettes also increase the exposure of non-smokers and bystanders to nicotine and a number of toxicants, the report says.
The COP is the central organ and governing body of the Convention and comprises 179 Parties as of today.
The WHO FCTC was adopted by the World Health Assembly on 21 May 2003 and entered into force on 27 February 2005. It has since become one of the most rapidly and widely embraced treaties in United Nations history.