China has published the draft guidelines of Administrative Measures for Electronic Cigarettes, which state that flavors other than tobacco shall not be offered in e-cigarettes to reduce their appeal to minors, as reported by Caixin on March 12. The guidelines also state that the establishment of any e-cigarette, atomizer, and nicotine production firms should be examined by the relevant administrative department under the State Council. Moreover, according to the new rule, only enterprises with tobacco wholesale licenses will be allowed in the e-cigarette wholesale business, which means only state-owned China Tobacco [6055:HK] can engage in e-cigarette wholesale. The guideline is soliciting public opinions until March 17 before taking effect on May 1.

China had previously tightened controls on e-cigarettes by adding e-cigarettes to substances under the Tobacco Monopoly Law in November 2021. China is the world’s major producer and consumer of e-cigarettes, accounting for more than 95% of the global production capacity. The new rules will have a dramatic impact on China’s e-cigarette market, as tobacco-flavored e-cigarettes are far less popular than other flavors. However, exported e-cigarettes will be exempted from the flavor restrictions. Similarly, the US also issued a flavor ban in 2020, prohibiting the sale of e-cigarettes with flavors such as fruits and candy over concerns about vaping by teens and children.

Sources:

https://www.caixin.com/2022-03-12/101855308.html

https://www.shine.cn/news/nation/2203123033/

https://pandaily.com/china-tightens-controls-on-e-cigarettes/https://pandaily.com/china-amends-tobacco-monopoly-law-to-include-e-cigarettes/