On March 11, the State Tobacco Monopoly Administration issued two documents in a row. One is the administrative measures for electronic cigarettes (hereinafter referred to as the administrative measures), which will come into force on May 1, 2022. The other is for the state tobacco monopoly administration to publicly solicit opinions on the national standard of electronic cigarette (second draft for comments), and it is required to feed back the written opinions to the project team before March 17.
Among them, the administrative measures require that e-cigarette retailers need to apply for tobacco monopoly license, and the listing needs to be approved by the competent department. The second exposure draft proposed that the atomization design "should not induce minors, and should not make the characteristic flavor of the product show other flavors except tobacco." In other words, e-cigarettes other than tobacco flavor may become history.
Affected by this news, after the opening of U.S. stocks on March 11, Beijing time, fog core technology had a maximum intraday decline of more than 40%, with a decline of 36.32% as of the close.
"The industry has long expected stricter regulation of e-cigarettes. However, it is still a little shocked to see the severity of this document." An e-cigarette industry practitioner told the reporter of Securities Daily.
supervision comprehensively strengthened
The administrative measures clearly point out that the establishment of e-cigarette production enterprises, atomization production enterprises and e-cigarette nicotine production enterprises shall be reported to the competent department of tobacco monopoly administration under the State Council for examination and approval before the project can be approved in accordance with the relevant provisions of the state. At the same time, the capital construction or technological transformation of e-cigarette production enterprises, atomization production enterprises and e-cigarette nicotine production enterprises in order to expand their production capacity must be approved by the competent department of tobacco monopoly administration under the State Council.
In terms of raw materials, the policy makes it clear that the source of tobacco monopoly products such as tobacco leaves, redried tobacco leaves and cut tobacco must be purchased from tobacco enterprises with management rights. In other words, this policy blocks the source of illegal recycling and synthesis of e-nicotine.
It is worth noting that the administrative measures also specify that the initial public offering and listing of e-cigarette enterprises shall be reported to the competent department of tobacco monopoly administration under the State Council for examination and approval.
For this requirement, an e-cigarette industry practitioner who declined to be named told the reporter of Securities Daily that this policy requirement makes it clear that e-cigarette enterprises need to apply for listing in advance, so that they can find and solve the risk points faced by enterprises in advance, so as to pave the way for listing, which is a good thing for enterprises.
In addition, the management measures clearly specify that the atomized material should contain nicotine, the concentration of nicotine in the atomized material should not be higher than 20mg / g, and the total amount of nicotine should not be higher than 200mg At the same time, it is prohibited to sell flavored e-cigarettes other than tobacco flavor and e-cigarettes that can add atomization by themselves.
special flavor electronic cigarette will become history
Like the administrative measures, the special taste of e-cigarettes was also restricted in the second exposure draft issued on March 11.
In terms of "atomization design", the second exposure draft points out that the atomization design should not induce minors and should not make the characteristic flavor of the product show other flavors except tobacco.
At present, e-cigarettes on the market mainly attract sellers with special flavors, such as apple, watermelon, lemon and other fruit flavors, as well as coffee, red wine and other beverage flavors. In order to attract users, other manufacturers have also manufactured durian flavored cigarette bombs.
According to the requirements of taste restrictions, the list of temporarily licensed substances for aerosol additives in the annex table of the second exposure draft released this time has also been reduced to 101 from 122 last year. According to statistics, the substances reduced this time are mainly seasoning additives, such as plum extract, rose oil, fragrant lemon oil, orange oil, sweet orange oil, etc.
A well-known brand e-cigarette agent told the reporter of Securities Daily, "At present, most e-cigarette users will choose special flavor cigarette cartridges, and few users buy traditional tobacco flavors. If there is no taste attraction, it is expected to have a great impact on the sales of e-cigarettes. However, special flavor e-cigarettes will indeed have a certain attraction effect on curious young people, so it is expected that the special taste will be limited this time 。”
From a global perspective, there is also a precedent for restricting the taste of e-cigarettes. The US Food and Drug Administration (FDA) issued a ban in 2020 to ban the sale of electronic cigarettes with most flavors, including fruit and candy. In this regard, the U.S. Department of health and human services issued a statement saying that the ban is aimed at the younger trend of e-cigarette smoking in the United States.
