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Tag: China

  • Sneak Peek at New Vapor Rules in China

    Sneak Peek at New Vapor Rules in China

    Photo: Kajsym Yemelyanov

    Starting May 1, China will begin enforcing the licensing rules for e-cigarette production, wholesale and retail entities. The new rules, the draft of which was first announced in December 2021, apply to all hardware and e-liquid products, including all components and ingredients.

    “The administrative department in charge of tobacco monopoly of the State Council takes charge of national supervision and management of electronic cigarettes, and is responsible for the formulation and organization of implementing electronic cigarette industry policies,” the regulations state. “The administrative department in charge of tobacco monopoly of the State Council shall organize professional institutions for technical review of electronic cigarette products based on inspection and testing reports and other application materials.

    “Electronic cigarette products not sold in China and only used for export shall comply with the laws, regulations and standards of the destination country or region,” the rules state. “If the destination country or region does not have relevant laws, regulations and standards, they shall comply with China’s relevant laws, regulations and standards.”

    Critically the new rules also ban nontobacco flavors and the sale of open systems. The importation of any vaping related products, such as pre-mixed e-liquids, must also be approved by Chinese authorities, according to the regulations.

    Any company that produces e-cigarettes in China must now get a license. If a company wants to expand its production or product portfolio, the company must garner approval from the State Tobacco Monopoly Administration. All nicotine must be tobacco derived and purchased from approved sellers in China. Chinese regulators will also establish a comprehensive e-cigarette traceability system to keep track of vaping products.

    “Electronic cigarette wholesale enterprises shall not provide electronic cigarette products to units or individuals that are not qualified to engage in electronic cigarette retail businesses,” the regulation states.

    The rules also specify that “enterprises or individuals that have obtained the tobacco monopoly retail license … shall purchase electronic cigarette products from local … wholesale enterprises, and shall not exclusively operate the electronic cigarette products sold on the market.”

    According to an industry expert, this means all retail outlets must sell multiple brands and not just a single brand. Traditionally, companies such as RELX only sold their own brands in their stores.

    Additionally, authorities will establish a “unified national electronic cigarette transaction management platform” that e-cigarette industry businesses that have obtained tobacco monopoly licenses must conduct all transactions through.

    The rules also encourage stakeholders to report illegal activity. “Rewards will be given to units and individuals who have made meritorious deeds in reporting cases of illegal production and sales of electronic cigarette products, e-atomization material products and electronic cigarette nicotine,” the rules state.–T.S.D.

  • China Mulls Ban on Flavored E-Cigarettes

    China Mulls Ban on Flavored E-Cigarettes

    Photo: Victor Moussa

    China will ban nontobacco flavors in e-cigarettes if an updated draft of standards for the vaping industry becomes law, reports Shine.

    In November 2021, China’s State Council amended the country’s tobacco monopoly law to include vapor products and requested public input on its proposed regulations for the segment.

    While the original proposal appeared to permit nontobacco flavors, the new draft, published on March 11, underlines the importance of reducing the appeal of e-cigarettes to youth, stating: “Flavors other than tobacco taste shall not be offered in products.” To be specific, 21 additives, referring to tastes like plum, rose and orange, are removed from the list.

    As some U.S. states and European countries already have flavor bans in place, industry experts believe the new regulations may have a greater impact on the domestic market rather than exports.

    In an interview with Securities Times, an unnamed industry insider said sales volumes of tobacco-flavored e-cigarettes in the domestic market are dwarfed by other flavors.

    The March 11 publication sent stocks of Chinese vapor companies tumbling. Shares of RLX Technology, which had just reported strong revenues for 2021, dropped more than 36 percent and closed at $1.49 on the New York Stock Exchange on Friday.

    The updated draft is now available on the State Tobacco Monopoly Administration’s website. The administration is asking for public feedback until March 17.

  • China Probes Huabao Founder

    China Probes Huabao Founder

    Photo: Andrey Popov

    Chinese regulators have announced an investigation into Chu Lam You, the majority shareholder in Huabao International Holdings, China’s largest e-liquid, tobacco flavoring and fragrance company.

    One of China’s richest self-made women, Chu is being investigated for unspecified “suspected disciplinary violations,” according to a Hong Kong stock exchange filing. The company said in a statement that it was informed of the investigation by its subsidiary Huabao Flavours and Fragrances. “Up to the date of this announcement, the company has not been provided with any details of the nature of the suspected violations of Ms. Chu that [are] currently being investigated. The business operation of the group remains normal,” the company stated.

    Huabao added that the subsidiary received a case filing notice from the Leiyang City Supervisory Committee indicating that the probe was being carried out by the Chinese Communist Party and the local government, according to the Financial Times.

    Launched in 1996, Huabao produces flavors and fragrances used by tobacco manufacturers, including for the e-cigarette or vaping market, as well as food companies.

    Like many high-profile Chinese businesspeople, Chu has also served on various industry and government advisory committees. The probe into Chu comes as China’s long-running anti-corruption campaign gathers momentum as Xi seeks to secure a historic third term.

  • Broughton: China Vapor Laws is Opportunity

    Broughton: China Vapor Laws is Opportunity

    Photo: Smoore

    Recent amendments to China’s Tobacco Monopoly Law present an opportunity for responsible companies to demonstrate how alternative high-quality products are an important and appropriate element of tobacco harm reduction, according to Broughton.

    Writing on the website of the contract research organization, Broughton’s head of regulatory affairs, Lloyd Smart, and regulatory consultant Xiangyin Wei summarize China’s tobacco monopoly law changes and explain what they means for electronic nicotine delivery systems (ENDS).

    On Nov. 26, 2021, China’s State Council amended the country’s tobacco law, giving the State Tobacco Monopoly Administration jurisdiction over e-cigarettes. Next-generation products will now be managed in the same way as combustible cigarettes.

    Among other things, this means that ENDS companies, including exporters, will need to apply for a license. A single transaction platform will be implemented for product distribution and all products must comply with a new national standard. Regulation of products likely to be introduced following an initial transition period of between three and five months, during which no new products may be brought to market. Products with synthetic nicotine will be banned in China.

    According to Broughton, the recently announced changes to e-cigarette regulation in China offer an excellent business opportunity for companies that want to build consumer trust by showcasing their product’s high quality and safety standards.

    “As with all regulatory requirements, the most important initial step is to understand fully what’s needed—to provide reassurance or identify gaps that need to be addressed. And to act quickly; seizing the opportunity while making sure you don’t get left behind as the market changes,” write Smart and Xiangyin.