Category: Shop talk

Louisiana Businesses Struggling Under Vape Tax

Baton Rouge, capital of Louisiana (Credit: Fang)
Vaping product taxes and regulations in Louisiana may be taking a devastating toll on small businesses.
Unlimited Vapor, according to the Shreveport Times, stands with limited supply due to the recent increase in state taxes on nicotine vape products and e-cigarettes. On June 15, 2023, Louisiana Gov. John Bel Edwards signed into law the bill to increase the excise tax on vapes from 5 cents per milliliter of nicotine solution to 15 cents.
“We usually special order it for customers, if they know what flavor they want, what milligram they want, because of the excise tax going up as high as it is, we don’t want to order it and have it just sitting there,” said Selena Price, manager of Unlimited Vapor.
The tax increase went into effect on July 1, and is only impacting Louisiana. Border states such as Texas, Arkansas and Mississippi have no excise tax on vape and e-cigarette products.
Rep. Paul Hollis of Covington sponsored House Bill 635 Act 414 to discourage the use of vape and e-cigarette products through an increase in excise tax. The Shreveport Times reached out to Hollis for a statement, but did not receive a response.
Many are calling the new rules a de-facto flavor ban. It tripled the tax on vape liquid from 5 cents per milliliter to 15 cents per milliliter and earmarks the revenue the tax will generate for pay raises for state troopers. This has forced many products off of vape shop shelves. This is forcing most vape products off of store shelves.
The legislation, Act 414 by Rep. Paul Hollis, started out as a bill to increase the tax on vapes, with Hollis saying he wanted to discourage their use. But it quickly morphed into a broader law that dramatically scales back what vapes can be sold, after wholesalers, major tobacco companies and legislators concerned with youth use got involved.
August 14, 2023
Vaping Retailers Cautious on Outlook of Category

Credit: Jet City Image
Goldman Sachs Managing Director Bonnie Herzog highlighted some key concerns and risks identified by retailers in the survey, along with some key positives for the nicotine industry.
A recent survey shows convenience-store retailers, distributors and others who sell vaping and other tobacco products are cautious on the outlook for the category.
This finding comes from Goldman Sachs’ second-quarter 2023 Nicotine Nuggets survey, based on feedback from the New York-based company’s retailer and wholesaler contacts representing about 60,000 locations across the United States, according to CSP Daily.
Overall, 43 percent of respondents are more negative than the previous quarter in their outlook for the total tobacco/nicotine category in the last few months, citing economic constraints on the consumer, pressure on discretionary incomes, regulations, and tobacco list price increases driving consumers to trade down to cheaper products or exit the category.
Key concerns and risks that survey respondents identified included price elasticity and downtrading, Goldman Sachs Managing Director Bonnie Herzog highlighted in a report on the survey.
Recent price increases are forcing consumers to buy less, buy cheaper products or exit the category, she said. One respondent said the current pricing environment is not sustainable for the core tobacco consumer, and that pricing is starting to cut into demand above and beyond the industry 3-5 percent volume declines. In July, Altria took its third cigarette list price increase of 2023.
As manufacture list price increases reduce consumer options for affordable tobacco products, smokeless nicotine and e-cigarettes are benefitting, survey respondents said.
Respondents also expressed concern about the proliferation of black-market activity in flavored e-cigarettes as the FDA struggles to remove non-compliant products from the market, Herzog said. Continued premarket tobacco product application (PMTA) delays and marketing denial orders from the FDA on flavored products is benefiting the illicit market, respondents said. Significant traffic is moving to disposable flavored e-cigarettes.
Key positives from the report included growing sales of non-combustible alternatives and cigarettes continuing to drive store traffic, despite volume declines.
Several retailers pointed out accelerating trends for flavored disposable vapes and alternative oral nicotine pouches and e-cigarettes.
And while cigarettes are increasing in price, the segment remains an important category and traffic driver for retailers, as cigarettes make up more than a quarter of total inside sales, Herzog said.
July 28, 2023
PMI Offering Australian Pharmacies Discount Vapes

Credit: Va Butenkov
Philip Morris International announced it has made a deal with some Australian pharmacies to supply its VEEV vaping products below cost, despite the company’s opposition to the government’s new prescription vaping model.
VEEV marketing materials seen by Guardian Australia offer pharmacists an “introductory offer” to supply nicotine pods and devices at a discount.
The offer is also on the condition pharmacies do not sell a packet of two VEEV nicotine pods for more than AUD14.90 ($9.98) or devices for more than AUD19.90 – cheaper than what wholesalers can offer.
The recommended retail price for comparable pod products is AUD24.99. The marketing material for the offer only mentions PMI in fine print at the bottom of the document.
A spokesperson for the Pharmaceutical Society of Australia said it “urges pharmacists to be skeptical of any commercial offer from big tobacco”.
“There are currently no nicotine vaping products registered on the Australian Register of Therapeutic Goods and no company should be advertising unregulated products to Australian healthcare professionals,” the spokesperson said.
In May, the federal health minister, Mark Butler, announced that the government will ban the importation of nonprescription vaping products – including those that do not contain nicotine. Minimum quality standards for vapes are also being introduced, including restricting flavors, colors and other ingredients.
Vape products will require pharmaceutical-like packaging, and the allowed nicotine concentrations and volumes will be reduced. All single-use, disposable vapes are being banned.
A Philip Morris International spokesman told Guardian Australia; “We have always been open and transparent about the fact we will work within whatever legal and regulatory framework exists for these products in Australia”.
“This is in stark contrast to dozens of other vaping companies who are providing their product via the black market,” he said.
July 7, 2023
Retailers Want FDA List of Legal Vaping Products

Retail associations have asked the U.S. Food and Drug Administration to provide them with list of e-cigarettes and vape products that are legal to market, reports NACS.
In October 2021, NACS and five other retail associations sent a letter to the FDA asking the agency to publish the names of vapor products for which it has taken action. In their letters to FDA, the associations expressed the critical nature of this list for their retail members who need to know which products are legal to sell and which are not.
The FDA formally responded in January 2022, stating that it understands the retail groups’ request for specific names of products and that the agency is working on updating the list with final actions taken on individual products, including those that received marketing denial orders (MDOs).
“Given the large number of products involved, sharing this information requires additional time and resources so that the Agency does not disclose confidential commercial information (CCI) about products that are not yet marketed,” stated the agency.
In a more recent letter to the FDA, the associations said they “can appreciate the immense task of reviewing millions of applications. However, there remains widespread confusion in the marketplace as to which products can remain on shelves and which need to be removed.”
“While Director Zeller encouraged retailers to contact manufacturers with any questions about products in their inventory, this is not an adequate or fair solution. It places the burden on retailers to verify the marketing status of ENDS and vape products with the manufacturers. Many of our members are small operators who do not have the resources or bandwidth to contact the manufacturers,” wrote the associations.
“Moreover, manufacturers providing a list does not guarantee accuracy or give the assurance that a verified list from the agency would give. These retailers stand to face enforcement if they are out of compliance with the law and the only way to ensure they can comply is if they have a verified list from the agency.”
Renewed support for a list of legal products come after the FDA issued warning letters to 30 retailers, including one distributor, for illegally selling unauthorized Puff Bar and Hyde disposable vaping products. The FDA typically sends warning letters to manufacturers, however, now retailers are facing stiffer scrutiny.
FDA Commissioner Robert Califf said cracking down on disposable products most used by youth is a priority for the regulatory agency. “We’re committed to holding all players in the supply chain – not just manufacturers but also retailers and distributors – accountable to the law,” he said.
June 2, 2023
Reynolds Warns Vape Shops to Stop Selling Flavored Vapes

Credit: Lovely Day 12
A STAT news report claims R.J. Reynolds has sent letters to several small vape shops threatening to sue if the shops do not stop selling flavored vaping products.
The STAT news story claims to have obtained two letters, both of which were sent in March, giving the vape shops just a few days to confirm they will no longer sell flavored tobacco products.
Failure to comply could result in “legal action, and the costs, attorneys’ fees, and adverse publicity to which a lawsuit would subject [the vape shop],” the letters warn, according to STAT.
The letters, which were sent to stores in New Jersey and Alabama, also warn that the shops are violating local laws regulating the sale of flavored tobacco.
The New Jersey letter also copies the county prosecutor where the vape shop is located, in an apparent attempt to notify the local authorities of the violation.
he letters are the latest example — and a marked escalation — of Reynolds’ campaign to force a crackdown on illegal vaping products.
In the article, Clive Bates, a tobacco harm reduction advocate, criticized Reynolds.
“I do not think Reynolds should be hounding vape shops for selling life-saving products to their regular customers,” Bates wrote in an email to STAT. “It should not be picking on little guys, but pressing federal bureaucracies to do their job, and do it better.”
In February, RAI Services Company, a Reynolds company, submitted a citizen petition asking the U.S. Food and Drug Administration to adopt a new enforcement policy directed at flavored “illegally marketed disposable electronic nicotine delivery system” (ENDS) products.
The petition was filed on Feb. 6 and posted by the FDA to Regulations.gov for public comment on Feb. 8.
May 3, 2023
Serbia to Fine Retailers Selling Vapes to Youth

Credit: Bits and Splits
Sellers of e-cigarettes and other tobacco products will be fined around €430 ($469) for selling to minors, according to a recent amendment to the Law on Consumer Protection.
In Serbia, minors can purchase e-cigarettes and other products such as vapes in local markets, kiosks, and even in coffee shops, though sellers will now be fined for selling them, according to EurActive.
“In the legislative system of the Republic of Serbia, this issue is not regulated. There is no definition of electronic cigarettes and other products with or without nicotine, as well as a ban on selling them to minors. This is precisely why the urgent need for regulatory action, which is being implemented now, is emphasized,” Serbia’s Internal and Foreign Trade Ministry stated.
The relevant ministry announced that it is starting to work on amendments to the Law on Consumer Protection in this part because it believes that this is the solution to a major national problem.
“The main goal is to ban the sale of electronic cigarettes and other products to minors, as a particularly sensitive category. In this way, sanctions will also be enabled in the case of the sale, service and gifting of these products,” the Ministry stated.
With the new decision, a merchant will be fined 50,000 dinars (around €430) if they sell to a minor, the Ministry said.
The popularity of e-cigarettes and other electronic nicotine delivery systems among non-smoking youth and adults represents a significant public health problem, as they encourage nicotine addiction and expose users to carcinogenic substances.
They also increase the likelihood that individuals will start using other tobacco products, such as cigarettes, according to the Ministry.
“The conclusion of all conducted research is that by consuming an electronic cigarette, with or without nicotine filling, not only water vapor is sent into the air, but also a number of chemicals. The harmful effects of these products reflect on the health of individuals and intensively spread to all components of the environment,” it added.
The change in the law will prohibit the sale, service and gifting of electronic cigarettes with or without nicotine as well as other products intended for smoking, snorting, sucking, chewing, or inhaling vapor to persons under 18. It is also prohibited for persons under 18 to sell them.
April 12, 2023
Numerous Vape Shops Close After Taiwan Vape Ban

Credit: Yao Photograph
Since the vaping ban was enacted in Taiwan on March 22, 15 out of 44 vape shops in Kaohsiung City have closed, according to the city’s Department of Health.
Among the city’s 44 stores, 10 have completely shut down their businesses while 15 have closed their doors, according to media reports. The rest of the stores have switched to selling other products, as the store owners said that the fines are too high to risk, according to Taiwan News.
In addition to intensive inspections of physical stores, the health department is monitoring online sales and social media advertisements. So far, one violator who made e-cigarette advertisements will be interviewed and fined.
The amended regulations to Taiwan’s Tobacco Hazards Prevention Act ban e-cigarettes entirely, raise the smoking age to 20 and increase penalties for violators.
According to the new regulations, manufacturing or importing e-cigarettes is punishable by a fine of up to NT$50 million ($1.65 million). Advertising agencies, media, and advertisers are subject to a maximum fine of NT$2 million if they are caught advertising unsanctioned tobacco products.
Selling or displaying unsanctioned tobacco products is punishable by a maximum fine of NT$1 million. The fine for supplying novel tobacco products and their paraphernalia is NT$10,000 to NT$250,000, and vaping is punishable by a fine between NT$2,000 and NT$10,000.
April 12, 2023
Russia’s Vape Market Growing With Boost From China

A vape shop in Vladikavkaz, Russia in 2019. (Credit: irinabal18)
The withdrawal of European and American tobacco manufacturers and the gradual reduction of foreign e-cigarette brands doing business in Russia due to its war with Ukraine has allowed for the growth of Chinese e-cigarettes in Russia.
As Russia’s tobacco industry relies heavily on the support and investment of foreign brands, the withdrawal of international tobacco companies will cause a large shortage in the Russian tobacco market, which will lead to a sharp increase in the price of tobacco products sold in Russia, according to iGeekPhone.
By the end of 2021, there were more than 5,000 stores selling e-cigarettes in Russia, including more than 1,100 in the Moscow region.
According to real estate platform DNA REALTY, the number of tobacco shops in Russia grew by at least 20 percent in 2022, with the bulk of their profits coming from e-cigarette sales.
BAT announced it will withdraw from the Russian and Belarusian tobacco markets in 2023. Philip Morris International (PMI) and its subsidiary Fimo International, are also considering retaining their business in Russia because Russia is the seventh-largest tobacco market for PMI.
Japan Tobacco suspended investments in Russia and Imperial Brands transferred its Russian operations to a successor in Russia.
“E-cigarettes have great potential as alternatives to the tobacco market in Russia, where e-cigarette consumers account for 6.8 percent of the total number of smokers,” the article states. “After the United States and Europe, Russia is the world’s third-largest importer of electronic nicotine delivery systems (ENDS).
“China accounts for 90 percent of the global market. In 2021, China’s exports to Russia reached 82.5 billion rubles. This year it could increase by 35 percent to 111 billion rubles.”
April 10, 2023
Leaked BAT Data Claims Most UK Disposables are Illegal

Media outlets are reporting that BAT sent vaping wholesalers testing results that claim that nearly all major disposable vaping brands in the UK not produced by a major tobacco manufacturer contain illegal volumes of e-liquid.
Senior wholesaler sources leaked nearly 50 pages of BAT product testing data to betterRetailing, along with a letter from BAT urging wholesalers to stop selling products it claims are failing to comply with the 2ml e-liquid limit. A distributor of many of the brands named denied the claims.
In a letter sent to wholesalers by BAT UK managing director Fredrik Svensson, seen by betterRetailing, the supplier said it had commissioned “independently accredited laboratory” testing on Elf Bar 600 products purchased from supermarkets and independent retailers between 6 September 2021 and 7 March 2023.
The evidence revealed that the tested products “contained significantly more than the legal limit of 2ml of nicotine-containing e-liquid from 2.76ml to 3.88ml, with an average overfill of 58 percent.”
Testing was also conducted at the same lab on Lost Mary, Found Mary, IVG Bar, Klik Klak, SKE Crystal, Smok Mbar Pro and Solo disposable vapes. Test results for all these brands showed illegal levels of e-liquid.
Together, the brands account for nearly all disposable vaping sales in independent shops by both revenue and volume.
BAT’s letter urged: “As a responsible trading partner, we trust that you are taking appropriate steps to ensure that you are not supplying non-compliant products and that you will be urgently reviewing the supply of any products you stock, particularly those which our testing demonstrates do not comply with the TRPR [The Tobacco and Related Products Regulations 2016].”
Elfbar voluntarily pulled its products from UK shelves after finding its products did not meet legal requirements.
Recently, another Elfbar brand was pulled from UK store shelves after finding the products surpassed the legal limit for e-liquid volumes.
March 18, 2023
Vuse Market Share Over Juul Grows to 12 Percent

Credit: Jet City Image
The Vuse brand e-cigarette has expanded its market-share lead over Juul to 12 percent in the latest Nielsen analysis of convenience-store data.
The analysis, released Tuesday, covers the four-week period ending Oct. 8. Vuse’s market share rose from 39.7 percent in the previous report to 40 percent, compared with Juul declining from 28.1 percent to 28 percent.
Vuse also increased its year-over year advantage from 32.9 percent to 32.7 percent in the previous report to 33.6 percent to 32 percent.
According to Barclays, Nielsen largely covers the big chains. For the smaller chains, the group extrapolates trends, which is why trend changes don’t appear immediately in Nielsen, according to the Winston-Salem Journal.
In recent months, the shadow of a potential banning of Juul Labs Inc.’s e-cigarettes from U.S. retail shelves has accelerated the market-share gains of Vuse.
Meanwhile, No. 3 NJoy was unchanged at 2.8 percent, while Fontem Ventures’ blu eCigs was unchanged at 1.4 percent.
Juul’s four-week dollar sales in the latest report have dropped from a 50.2 percent increase in the Aug. 10, 2019, report to an 18 percent decline in the latest report.
By comparison, Reynolds’ Vuse was up 42 percent in the latest report, while NJoy was up 5.9 percent and blu eCigs down 30.9 percent.
October 21, 2022