Future of SA’s vaping industry is hazy
A proposed tobacco control law contains provisions that subject e-cigarettes to the same strictures as traditional products, with tight control on their use and sales
The government’s proposed new laws for tobacco control threaten the future of the vaping industry and will put jobs at risk, the Vapour Product Association (VPA) said on Thursday.
The draft Control of Tobacco Products and Electronic Delivery Systems Bill proposes bringing e-cigarettes into the regulatory net for the first time. It contains provisions that subject e-cigarettes to the same strictures as traditional tobacco products, with tight control on their use, marketing and sales. The public comment period for the bill closes on August 9.
"As it stands, the bill will ban any form of marketing or communication with retailers and even prohibit [vaping] retailers from showing their products in their own shops. The reality is millions of smokers who might switch to safer alternatives will just keep smoking and dying instead as a result of this new law," said VPA CEO Zodwa Velleman.
The VPA represents manufacturers, wholesalers, and retailers of smoke-free vapour products.
"Vaping products must be regulated separately. International evidence shows that they are at least 95% less harmful … and countries that have embraced them, like the UK and the US, have seen their smoking rates plummet in recent years," she said.
Public Health England published a report earlier in 2018, which concluded that vaping posed a fraction of the health risks of smoking, and that switching completely to e-cigarettes conveyed substantial health benefits.
The local e-cigarette market generated more than R1.16bn in sales revenue in 2017 and is projected to triple in size over the next decade, but this growth is threatened by the new bill, said the VPA, citing research it commissioned from Canback consulting.
Taxing e-cigarettes at the same level as traditional tobacco products such as cigarettes would have a chilling effect on the market, it said.
Canback’s market analysis of the vaping industry, which excluded the effects of illicit products on which no excise tax is paid, concluded that local market growth was currently constrained by product affordability. While prices had fallen in the past three years, e-cigarettes were affordable for just 16% of the population, said Canback vice-president Arshad Abba.
In the absence of legislative changes that constrained sales, increased competition that led to price cuts and growing affluence would help drive market growth, he said. However, if these products were taxed in line with traditional tobacco products it would have a significant effect on their retail price, he said.
"The category would drop off suddenly in the first year of implementation, and then slowly recover," he said. A sudden price rise could prompt some users to migrate back to cigarettes, he said.
If the bill were enacted in its current form, its restrictions on advertising and display of e-cigarettes would also constrain sales, and knock specialist retailers hard, said Abba.
By 2017, the vaping sector had created more than 4,300 jobs. If the sector is not hampered by regulatory intervention, that number is expected to grow to 14,690 jobs by 2027.