In the most comprehensive chemical comparison to date between smoke and electronic-cigarette emissions, toxicant levels in vapor from British American Tobacco’s Vype ePen was found to be on average 95 percent less than in conventional cigarette smoke.
‘A comparison between the vapor from Vype ePen – a commercially available e-cigarette – and 3R4F – a reference cigarette – revealed substantial reductions in the e-Pen emissions for all toxicant groups measured,’ said BAT in a press note issued today. ‘Most cigarette smoke toxicants could not be detected in the e-cigarette vapor.
The results are published today in Chemical Research in Toxicology DOI: 10.1021/acs.chemrestox.6b00188.
“There are few publications examining the broad chemical composition of e-cigarettes, with most focusing on specific compounds or compound groups,” said Dr. Kevin McAdam, head of Next Generation Products Safety Assessment at BAT. “But we have tested for a total of 142 compounds, including those listed by the US Food and Drug Administration as harmful or potentially harmful (HPHC), those compounds listed by the World Health Organization, and Health Canada, and those reported previously to be generated by e-cigarettes.”
The press note said that the products tested were the ‘Vype e-Pen Blended Tobacco flavour and the Kentucky Reference Cigarette 3R4F’. ‘The products were puffed using puffing robots in separate rooms and the emissions collected,’ the note said. ‘Because the levels of some constituents in e-cigarette vapour were anticipated to be very low, the air was also tested to identify contamination and analytical artefacts.
‘Independent contract labs were commissioned to quantify the following emissions: carbon/nitrogen oxides, carbonyls/dicarbonyls, alcohols/di-alcohols, phenols, o-heterocycles, chlorinated dioxins/furans; volatile, substituted and, polynuclear aromatic hydrocarbons; amides, azines, aromatic and aliphatic amines, nicotine & related compounds, nitrosamines, metals and radionuclides…
‘Comparison of toxicant emissions between Vype e-Pen and 3R4F were conducted on a per-puff basis. The results revealed average reductions of 99 percent for WHO and FDA truncated lists, and over 92 percent for the full FDA HPHC list.’
Three aerosol constituents were measured at higher per-puff levels in e-cigarette vapor than from 3R4F – propylene glycol (PG), vegetable glycerine (VG) and menthol. PG and VG are used to make e-liquid and menthol is used as a flavor.
“We expected to see PG and VG and menthol in the aerosol as they are used to make e-liquid,” said McAdam, who is also head of research, Next Generation Products. “There were also inconclusive indications of higher emissions of chromium in the e-cigarette vapor, which if correct may have arisen from the nichrome wire used for the heating element.”
BAT said that these and other tests formed part of a suite of tests that were being developed to test novel tobacco and nicotine products and that could be used to help develop standards for these products in the future.
‘Many in the public health community believe e-cigarettes offer great potential for reducing the public health impact of smoking,’ the note said. ‘Public Health England, an executive body of the UK Department of Health, recently published a report saying that e-cigarettes are 95 percent safer than cigarettes. The Royal College of Physicians have said that the public can be reassured that e-cigarettes are much safer then smoking and that they should be widely promoted as an alternative to cigarettes. ‘Cancer Research UK, Action on Smoking and Health, and the British Heart Foundation are also of the view that e-cigarettes are substantially less harmful than smoking.’
The group scientific and R&D director at British American Tobacco, David O’Reilly, has said that the finding of a BMJ report that large numbers of people are successfully using electronic cigarettes to give up smoking was encouraging, given that BAT was trying to build the category.
“The study illustrates a clear surge in e-cigarette usage in effective attempts to quit smoking, which shows a positive trend in the adoption of e-cigarettes as alternatives to cigarettes,” said O’Reilly.
“We have been researching and developing tobacco alternatives for decades to provide better and safer choices for consumers, and in the last decade in particular, e-cigarettes.
“Another element that could be explored beyond this study is how innovation in the e-cigarette category may have added to this adoption. The product quality, partly enabled by the evolution of technology and innovation, has ensured that adult smokers now have access to products that provide a more satisfying experience in their transition from conventional cigarettes.
“It is only with assurances around product quality and safety that this important emerging product category can continue to grow.
“We invest heavily in our product stewardship so consumers of our vapour brand, Vype, not only get what we believe to be a satisfying reduced harm alternative but also receive the assurances around product quality that they are telling us they want.”
The BMJ study, Association between electronic cigarette use and changes in quit attempts, success of quit attempts, use of smoking cessation pharmacotherapy, and use of stop smoking services in England: time series analysis of population trends, is at: http://www.bmj.com/content/354/bmj.i4645
The Smoke-Free Alternatives Trade Association (SFATA), the largest of the vapor industry trade groups, announced that Pamela Gorman will serve as the organization’s new executive director. Gorman will lead the national and state advocacy, as well as legislative efforts for the organization. She will also oversee state chapters and represent SFATA with regulatory agencies.
“Pamela is a perfect fit to lead SFATA against a host of challenges on the national and state levels, with strong experience in policy and advocacy, and as elected official,” said Cap O’Rourke, president, board of directors, SFATA. “On behalf of the board, we look forward to working closely with Pamela to fight regressive policies that harm the small businesses that comprise our industry, and stifle the potential vapor products can have on helping reduce the public harm caused by smoking.”
Gorman founded U.S. Vapor, a public affairs firm. Prior to that, she was director of government relations for NJOY, where she built the first government affairs department and program for an independent (not tobacco-owned) manufacturer. She was responsible for budget development, advocacy, issue communications and execution of key business legislative initiatives and issue response.
“I am honored to join the vapor industry’s leading trade association and represent the interests of small business owners throughout the country who epitomize the American dream, creating jobs and investment in their communities, providing a significant alternative to smoking,” said Gorman. “Building upon the legacy of my predecessor, and leveraging the strength of our organization, I will continue the fight on behalf of these businesses and the consumers they serve, against industry-destroying policies and devastating taxes currently facing our membership.”
Gorman honed her political and legislative skills as a State Representative in the Arizona House of Representatives from 2005-2006 and later as a State Senator in Arizona from 2007-2010. She was part of the Senate Leadership team in her final term, also serving as the Senate Majority Whip.
Facing potential bankruptcy, the US’ 15,000 vaping and e-cigarette outlets are mounting a political campaign to win a congressional reversal of new and costly Food and Drug Administration rules that went into effect in August, according to a story by Paul Bedard for the washingtonexaminer.com.
The “Right to Vape” campaign plans to barnstorm through 15 battleground and politically influential states to pressure lawmakers up for re-election to promise to use the upcoming November lame-duck session to make changes to the regulations.
The Washington-based Americans for Tax Reform has teamed with the Consumer Advocates for Smoke-Free Alternatives Association and the American Vaping Association for an October bus tour, organizers told theWashington Examiner.
Under its so-called deeming rules, the FDA is requiring agency approval of any vaping product sold for the first time after February 15, 2007, and the approval process is too burdensome and expensive for all but the very biggest companies.
At the same time, some states have brought in or are bringing in burdensome taxes on vapor devices and by-products.
The bus tour will swing through Nevada, California, Oregon, Washington, Montana, Wyoming, Colorado, North Dakota, Minnesota, Wisconsin, Illinois, Indiana, Ohio, West Virginia and Pennsylvania.
Paul Blair, state affairs manager at Americans for Tax Reform, said the goal was to educate lawmakers and the public on the health benefits and safety of vaping, and to raise questions about taxing small businesses.
The Hong Kong government, in denying its citizens the right to access nicotine-containing vapor devices, might be failing to allow cigarette smokers the chance to reduce the risk that they take, according to a story by Alexandros Raptis for harbourtimes.com.
Raptis cites evidence from a new research paper, The Vapor Revolution: How bottom-up innovation is saving lives,which was presented at the Foreign Correspondents’ Club.
Co-written by Dr. Amir Ullah Khan and published by American think tank The Reason Foundation, the evidence suggests the Hong Kong government ‘may be putting the lives of Hong Kong’s over 600,000 smokers at risk by denying them a less harmful option to help quit’.
The report cites previous research showing that, when legally available, vaping displaces smoking – it does not promote it.
The vice president of the foundation, Julian Morris, raised the Holy Grail of the anti-smoking movement – the prospect of a total elimination of smoking within the next 30 years.
Such a switch could save eight of 10 billion life-years currently at risk from smoking.
Vaping was far safer than was smoking — and had the potential to replace it, if consumers were given the choice.
Japan Tobacco International – Korea has launched ‘Logic Pro,’ an electronic cigarette that uses refill capsules; the first of its kind to be sold in Korea, according to a story in The Korea Herald.
Logic Pro would deliver a one-of-a-kind experience to electronic cigarette smokers through capsules made with premium materials from Europe and on an outstanding production line, an executive at JTI Korea said.
The capsules were leakage free and allowed the use of different flavors.
The Logic Pro, comprising an electronic cigarette, battery and USB charger, retails at 40,000 won ($36.17).
Logic is a leading US electronic cigarette producer that JTI acquired last year.
Founded in 1867, the Borgwaldt Group has spent nearly 150 years becoming a primary player in the research, development and production of flavorings for the tobacco industry. In addition to flavorings, the company is also well-known as a leading vendor for quality- control devices and machines used by the tobacco industry and its subsuppliers.
Following its acquisition by Hauni Maschinenbau in August 2013, Borgwaldt Group, which consists of Borgwaldt Flavor and Borgwaldt KC, recognized the opportunities presented by the ever-evolving vapor industry, and before year’s end the Borgwaldt Vapor Competence Center was born.
“We decided to establish the Vapor Competence Center at the end of 2013, when we realized that all units are involved in the vapor business, even when in different segments,” says Thomas Schmidt, director of scientific and technical affairs. “The positive experience was in the beginning—and still is—that it was very beneficial to have competent discussion partners within our own company to reflect specific technical aspects. We wanted to give this advantage to our customers to support them in all fields of their activities.”
Located at Borgwaldt’s headquarters in Hamburg, Germany, the Vapor Competence Center brings together the entire Hauni network’s knowledge and experience with instrument technology, flavor development and analysis. Experts from the Borgwaldt Group’s subsidiaries, Borgwaldt Flavor and Borgwaldt KC, have teamed up to develop innovative technologies and processes and to provide specific solutions to customers within the vapor industry.
“We are working in a team of in-house experts from our three units: Borgwaldt KC GmbH, the manufacturer of [quality-assurance and quality-control] instruments; Borgwaldt Flavor GmbH as provider of flavor solutions for the vapor industry; and finally ASL, our analytical service laboratory with the expertise in analytical testing of e-liquids and aerosols,” says Schmidt. “All the units are active in their field of expertise, which means developing instruments, creating flavors and aromas, and developing analytical test methods. The information exchange within the Vapor Competence Center during the process is our driver to enhance our service, products and solutions. In addition, we are working actively in international standardization work groups to ensure that our service and products are always state-of-the-art.”
In addition to having access to the expertise of both Borgwaldt subsidiaries, customers who come to the Vapor Competence Center for customized solutions will also benefit from having access to the know-how of the industry professionals employed by Hauni. “Like the Vapor Competence Center as melting pot for all Borgwaldt expertise, the professionals of the Vapor Competence Center can connect to Hauni’s big source of know-how, which can be pulled together on project basis,” says Schmidt. “If a customer needs advice for manufacturing or design, Borgwaldt can rely on the experts from Hauni machine development or primary equipment.”
With more than a century of success in the tobacco industry, diving into the vapor industry was a logical next step for Borgwaldt. “Coming from the cigarette flavor, analytics and instruments business, we applied our knowledge on the vapor industry,” says Schmidt. “Concerning flavors and liquids, we think that this gives us the needed edge to transfer smokers’ expectations in terms of taste and impact also to the new field of e-cigarettes. Adapted instruments for the vapor industry help our customer to apply and check new regulations and quality data.”
Although some in the vapor industry are under the impression that Borgwaldt’s Vapor Competence Center manufactures specific products, Schmidt stresses that this is merely a misconception. “The Vapor Competence Center does not produce an instrument or a flavor concentrate,” he says. “Production or service is still provided by the related Borgwaldt units. The Vapor Competence Center coordinates activities and gives the strategic direction to the operating units. The main task is to support and consult our customers to work out the perfect solution for them. Some customers [might believe] the VCC is an independent member of the Borgwaldt Group, but that is not the case. The Vapor Competence Center is simply a business unit within the group.”
And while many of Borgwaldt’s employees are tasked with performing duties for the vapor side of the business, the work is not performed in a separate facility with a focus specifically on vapor solutions. “Don’t understand our VCC as an independent unit in its own walls,” he says. “In fact, it is a dedicated joint-working unit which uses the whole facility in Hamburg. Depending on the face task, more or fewer colleagues are involved and active. Our whole service laboratory team is currently heavily involved in e-product testing, and due to the wide variability of e-products, our engineers and flavor experts are constantly delivering ideas and potential solutions to support our customers, especially regarding the required product registration within the European Union.”
Like many companies operating in the vapor industry today, recent changes in rules and regulations have posed challenges and concerns for Borgwaldt and its operations at the Vapor Competence Center. “Vapor products are more and more in focus of regulatory authorities,” says Schmidt. “Different regulations and product requirements—e.g., the European Union’s latest tobacco directive, which covers also vapor products—are interpreted different in diverse member states, necessitating individual solutions. However, there is often a lack of understanding and a huge portion of uncertainty on our customer’s side.”
Despite the challenges that potentially lie ahead for the company with regard to regulations, Schmidt is determined not to let such hurdles overshadow the achievements that have been made so far—particularly the introduction of a brandnew product of which the company is particularly proud. “We have successfully developed and launched test equipment to the market—e.g., the introduction of our LM4E, a four-channel aerosol collection unit,” says Schmidt. “The feedback of our customers is quite positive. In the same way we can evaluate the service laboratory activities positive. We have satisfied customers getting the needed results reported right on time. Also development and sale figures show us that the flavor business in that area is working well.”
With decades of experience in flavor development, analysis and quality control, Borgwaldt is well-positioned to develop unique and innovative solutions for the vapor industry—and according to Schmidt, the Vapor Competence Center’s ultimate goal is simple: “We want to become the market leader related to vapor quality testing, analysis and taste.”
The vapor category is growing rapidly in Europe. In Germany alone, e-cigarette sales are on track to generate a turnover of between €350 million ($389 million) and €400 million in 2016, up 30 percent over the previous year, according to the industry association Verband des eZigarettenhandels. Unsurprisingly, tax collectors across the continent are eager to tap the rapidly growing sector as an additional source of revenue.
Eager to prevent disorder, the EU is looking into a union-wide fiscal regime for electronic nicotine-delivery systems (ENDS). A December 2015 report by the EU Directorate-General for Taxation and Customs Union found that the current lack of taxation of e-cigarettes and other products in many jurisdictions caused market distortions.
It said that exempting e-cigarettes from excise might have “significant long-term budgetary implications for member states.” “Some member states have begun to levy a national tax on these products,” the report observed. “This might in time jeopardize the proper functioning of the internal market if other member states decide to do likewise in an uncoordinated way, which would result in differentiated treatment across the EU.”
Throughout the EU, ENDS are currently subject to member states’ individual value-added tax regimes. In addition to VAT, some countries impose a tax on e-liquid. Italy collects €0.385/mL, Portugal €0.60/mL and Romania €0.10/mL. Greece plans to implement an e-liquids excise duty of €0.10/mL. Latvia taxes both e-liquid and nicotine, at €0.01/mL and €0.005/mg respectively. A milliliter of e-liquid containing 20 mg of nicotine per milliliter—the maximum concentration allowed under the Tobacco Products Directive (TPD2)—would thus be taxed at €0.11. In June, Hungary and Slovenia announced that they, too, would start taxing vapor products. According to ECigIntelligence, Hungary will charge huf65 ($0.23) per milliliter of e-liquid from Jan. 1, 2017 and huf70/mL from July 1, 2017. Slovenia has been collecting €0.18/mL since Aug. 1.
“With a quarter of the EU’s 28 member states now putting category-specific taxes on e-cigs, [taxation] is no longer the rare policy anomaly it once seemed,” ECigIntelligence wrote. “An important question for the industry is, how far it will spread?” ECOFIN, which represents EU member states’ economics and finance ministers, recently asked the European Commission to investigate the introduction of new product categories into its tobacco tax legislation in order to “facilitate an appropriate, equal taxation treatment of new products within the internal market and remove potential inconsistencies and legal uncertainty.”
It stressed, however, that any solution needed to strike the right balance between revenue, expenses of tax administration and public health objectives. A complex task The announcement of the council conclusions caused excitement, particularly in the British media. Several newspapers suggested that ECOFIN wanted the same tax level for vapor products as for combustible cigarettes, which, they wrote, “could send the prices of e-cigarettes soaring.” (Under existing rules, all EU countries must impose an excise tax of at least 60 percent on tobacco products.) Indeed, The Guardian reported that France and two other nations had called for aminimum excise duty for e-cigarettes, to be set at “the highest common denominator.”
ECigIntelligence, however, pointed out that ECOFIN’s moves were only one step toward a tax regime. While such a regime is likely to arrive—possibly as early as 2017—the decision still depends on the commission’s findings, it said. Developing a pan-European system of taxing ENDS will be a complex task. “The commission and member states are currently facing a major challenge in discussing proposals for harmonization of excise taxation of e-cigs,” says Francesco Gaglioppa, taxation manager at Japan Tobacco International.
“There is a substantial lack of relevant data on sales dynamics and consumers’ behavior in order to assess the market evolution, and there is limited time to collect it before the 2017 deadline,” he says. “Any proposal or decision by the deadline risks to be [a] rushed [one]. Market data on e-cigs will soon become available under the TPD2 reporting requirements as set out in recitals 44, 52 and articles 20.7(i) and 28.2(g) of the TPD2. It can assist in carrying out impact assessments of introducing optimal excise tax regulation.”
In addition, member states take different positions on the matter. While some support tax harmonization, others have no intention to tax vapor products in the absence of reliable market data and/or without understanding the health impacts. “Care will need to be taken, as the e-cig market is much more price-elastic compared to combustible cigarettes,” says Tim Phillips, managing director of ECigIntelligence. “There has been research to show that as price increases are applied to e-cig liquids, the demand drops significantly.” Gaglioppa quotes dramatic figures from Italy, where a previously rapidly growing market started declining after the government introduced a 58.5 percent tax on vapor devices in January 2014.
As a consequence, e-cigarettes generated only €5.2 million in tax revenue in 2015—far below the budgeted €85 million. “This clearly highlights the negative impact taxes on e-cigs could bring to consumers,” says Gaglioppa. Tax with care Gaglioppa believes regulators should be cautious about imposing an EU-wide tax standard for ENDS, pointing out that the category is still at its nascent stage and that the volumes involved are small.
Moreover, organizations such as Public Health England (PHE), the U.K. Royal College of Physicians (RCP) and Public Health France have acknowledged the relative safety of e-cigarettes as compared with combustible products. “A report from U.K. PHE agreed that e-cigs are likely to be around 95 percent less harmful than cigarettes,” says Gaglioppa. “Having excessive taxes on e-cigs could discourage vapers and lead them back to smoking, as recently said by the RCP.” He adds: “We see the interest to adopt a harmonized approach for taxation of novel products, but we have to observe that this interest is mainly driven by two reasons—both of them not entirely convincing. First is the aspiration to increase revenue, which is not supported by currently available data, since the tax base is small and the category is developing.
Second is the uncertainty around the patchwork situation in Europe where in some member states a market for e-cigs does not exist or where neighboring member states have different taxation systems. All the efforts to harmonize taxation of traditional tobacco products did not succeed to harmonize the prices. On the contrary, price gaps today are wider than they were before the first EU measures on tobacco taxes.” If member states decide to tax e-cigs, Gaglioppa says, they should be reminded that the key to success in tax policy is limiting incentives for tax evasion and avoidance, as they undermine tax revenues and broader government policy objectives.
“We have to have the right tax base, excise tax structure and rates,” he says. “Rates should—initially—be low so as not to impede the development of the tax base and to encourage innovation in this new category.
A specific tax based on the physical volume of the nicotine-containing liquid is the most effective way to levy taxes, as it relies on consumption, minimizes the administrative and monitoring costs, and reduces compliance costs for legitimate manufacturers and importers of e-cigs.”
Barnaby Page, editorial director of ECigIntelligence, remains confident regarding the development of the EU vapor market after the introduction of a tax standard for e-cigarettes: “I would think there might be a small negative effect, but not a huge one. While price is a motivation for some people to switch from combustibles to e-cigs, it is not the major one. What I do think there might be is more brand switching among e-cig [users]—or, looking at it another way, more price competition—where brand loyalties are much less adamant than they are for combustibles.”
Miami Lakes, Florida-based International Vapor Group (IVG) announced the addition of a new line of e-liquids called Remixed in its Motley Brew line.
The new brand will be available in three flavors and packaged in 30 ml child-proof bottles. The company said “Crumb DMC” is a tribute to classic hip hop; “The Drop” is inspired by lime cookies topped off with a blueberry reduction and vanilla a-la-mode; and “Bubble Pop” is a blend of ripe strawberries and kiwi with a masterful mixture of watermelon, lemon lime and bubble gum.
CEO Nick Molina said “Remixed flavors tap into the pulse of music as we know it, and were blended to capture the excitement of represented genres with great attention to detail”
Excise taxes should be set at zero for electronic cigarettes and other less risky alternatives to combustible cigarettes, according a story by Billy Bambrough citing a report by the UK’s Institute of Economic Affairs.
The report argues that setting the tax on electronic cigarettes lower than that on traditional cigarettes would improve public health and consumer welfare.
The EU’s revised Tobacco Products Directive has laid out plans to bring electronic-cigarette excise taxes in line with those of tobacco cigarettes. Under the present excise regime, duty must make up at least 57 percent of the retail price of a pack of cigarettes.
The report’s author, economist Carl Philips, slammed policy makers for refusing to take into account “simple economics” when making decisions.
“Public health people are notoriously economically illiterate,” he was quoted as saying. Most of the nonsense in the policy discussion, on all sides, stems from ignoring economics.
“Just because a choice has health implications does not eliminate the value of economic analysis. The concept of addiction only makes sense in the context of economics, so it is obviously not a reason for ignoring economic science.”
