The electronic cigarette industry awoke to some troubling headlines today. The French courts just ruled that e-cigs should be classified as tobacco products and the results could be disastrous worldwide. As the European Union and the FDA both teeter on the brink of new e-cig regulations, the French courts could be setting a dangerous precedent for the rest of the world.
It all started when a Toulouse tobacconist owner took a rival e-cig shop to court, claiming they were taking away business by selling e-cigs without a tobacco registration. While e-cigs are tobacco free, there has been a lot of debate about whether vaping devices should be treated like tobacco in terms of regulations. Unfortunately, the French courts ruled in favor of the tobacconist owner, ruling that only a registered tobacco outlet could sell electronic cigarettes. The e-cig retailer immediately stated an intent to appeal the decision, but if it is upheld, it would be a terrible blow to business owners and thousands of employees involved in the e-cig industry in France.
The court announced the decision and claimed that e-cig stores violate “the state monopoly on the sale of tobacco.” Many vapers are outraged by this claim; after all, e-cigarettes are not tobacco products so why should they be treated as such?
Erik Bloomquist, Barenberg senior global tobacco analyst, said the world should watch carefully to see how the EU will react to the ruling. New revisions of the Tobacco Products Directive are scheduled for release in 2014 and the French decision could impact how the EU handles e-cig classification. “This could lead to greater regulation of the e-cigarette industry, and yes, in terms of manufacturing and distribution it could put a squeeze on the nascent e-cigarette industry,” he said.
If registered tobacconists are the only stores permitted to offer e-cig sales, it will give big tobacco companies another advantage over smaller independent stores. “It could in fact be more favorable for the majors because the French ruling suggests that the EU or some major countries are not concerned with damaging the nascent e-cig industry,” said Bloomquist.
The decision could also impact e-cig sales rates. If the items are not as easily available or they are heavily regulated and taxed, many smokers might not feel as motivated to switch. According to Euromonitor Internation, e-cig sales could reach $3.5 billion this year with $700-800 million in Western Europe.
Before Monday’s court decision, France was anticipating that e-cig sales would jump by more than 100 percent this year. However, new regulations could certainly take a toll and reduce those sales. Even worse, it could close the doors on 300 e-cig stoers in France, leaving 2,500 employees without jobs.
Not everyone is quite so unhappy about the decision. In fact, British American Tobacco seemed quite upbeat about the French court ruling. Spokesman Will Hill said BAT welcomed regulations “to ensure consumer safety and product quality, as well as the appropriate level of innovation, marketing and distribution freedoms required to enable this important category to grow.” That’s not really surprising considering that BAT stands to profit heavily by eliminating smaller e-cig brands that offer stiff competition in the blossoming e-cigarette market.
The court’s ruling could also impact e-cig use in the United States. The FDA is expected to unroll new regulations in 2014 and the policy makers are undoubtedly taking cues from how other countries are handling this issue. The court’s decision in France sets a dangerous precedent that could directly impact American vapers in the next few months.
Unless France overturns Monday’s court ruling, the e-cigarette industry will likely suffer worldwide. Classifying e-cigs as tobacco is not only unreasonable, but it is reckless. It could result in millions of former smokers going back to tobacco, not to mention that millions more will never get the opportunity to enjoy the benefits of e-cigs as they stand now.
How do you think the French court ruling will impact vaping in the United States? Are you worried that you could lose your rights to use e-cigarettes freely?