Tag: iMiracle

  • AP Reports Elf Bar Sellers Not Paying Taxes, Import Fees

    AP Reports Elf Bar Sellers Not Paying Taxes, Import Fees

    Credit: BCFC

    Last week, U.S. authorities publicly announced the first seizure of some Elf Bar products and other disposable vape brands as part of an operation confiscating 1.4 million illegal, flavored vapes from China.

    Officials pegged the value of the items at $18 million.

    The Associated Press, however, is also reporting the vapor maker of Elf Bar and other disposable brands, Shenzhen iMiracle and others, has imported products worth hundreds of millions of dollars while repeatedly dodging customs and avoiding taxes and import fees, according to public records and court documents.

    Records show the makers of disposable vapes routinely mislabel their shipments as “battery chargers,” “flashlights” and other items, hampering efforts to block products that critics say are driving teen vaping in the U.S.

    “The steps toward regulating disposables have been very weak and that has enabled this problem to get bigger and bigger,” said Eric Lindblom, a former Food and Drug Administration official.

    Elf Bar is the lead product of Shenzhen iMiracle, a privately held company based in Shenzhen, the sprawling Chinese manufacturing hub that produces more than 95% of the world’s e-cigarettes.

    Elf bar lost mary

    Elf Bar, Lost Mary and several other iMiracle brands are expected to generate $3.5 billion to $4 billion globally this year, according to industry analyst ECigIntelligence.

    In the U.S., iMiracle recently abandoned the Elf Bar name due to a trademark dispute and efforts by regulators to seize its imports. Instead, its products are sold as EB Create.

    At a 2022 court hearing in the case, U.S. distributors described skyrocketing sales.

    Jon Glauser, of Demand Vape in Buffalo, N.Y., told a federal judge his company had sold more than $132 million worth of Elf Bar products, accounting for a third of its yearly profits.

    “We were selling it faster than we could get it in,” Glauser said, according to the court transcript.

    Glauser attributed Elf Bar’s quick rise to its profit margin. Sellers make about a 30% profit, double that of other disposable e-cigarettes, he said.

    IMiracle’s parent company, Heaven Gifts, previously described how it could help customers evade import fees and taxes. Heaven Gifts’ website advertised “discreet” shipping methods to buyers, including not mentioning e-cigarettes or its company name “anywhere on the package.” Instead, the company said contents would be labeled as “atomizer, coil, tube, etc.”

    “We also mark a lower value to avoid tax,” the website stated, adding that customers could suggest their own value for the shipment.

    In June, Heaven Gifts announced it would “go offline,” shortly after the FDA directed customs officials to begin seizing shipments from the company.

    Despite the update, the company’s spokesman indicated Heaven Gifts remains in business and staffers continue using email accounts bearing its name. The spokesman did not answer numerous follow-up questions about the company’s business.

    Neither Heaven Gifts nor iMiracle appear in customs data reviewed by the AP and compiled by ImportGenius, a global trade analytics company.

    The seizure announced last week suggests part of the answer: The shipments arrived at Los Angeles International Airport, and air carriers are not required to disclose the same details about their cargo as ocean vessels. The e-cigarettes were mislabeled as toys, shoes and other items.

  • Elf Bar Maker Wants U.S. FDA to Reverse Red List Addition

    Elf Bar Maker Wants U.S. FDA to Reverse Red List Addition

    Imiracle, the manufacturer of Elf Bar, Lost Mary and EB Design vaping products, is calling on the U.S. Food and Drug Administration to reverse the agency’s recent addition of Imiracle products to its import red list and “for coherent, clear and depoliticized regulation of the U.S. vaping market.

    IMiracle Shenzhen Technology Co. Ltd. issued a statement regarding the placement of its products on the FDA’s Import Alert # 98-06. The company said it is disappointed by the FDA’s decision to “abruptly and arbitrarily” add the company’s products to the FDA import red list.

    The company stated that it was given no notice regarding the decision and was provided no opportunity to address any FDA concerns before action was taken.

    “It is the job of the FDA to provide consistent and coherent regulatory clarity to the U.S. marketplace. This red list announcement fails to meet this responsibility and provides yet another example of FDA’s politicized decision-making,” a spokesperson for Imiracle stated. “The FDA is singling out IMiracle’s products, despite the fact that the company was working in good faith through the FDA’s PMTA process. At the same time, the FDA is failing to address the flood of products from manufacturers that have ignored and never attempted to comply with FDA regulations.

    “This decision also ignores the latest science on e-cigarette use and continues to prevent U.S. adults from accessing an entire category of nicotine products that FDA knows are significantly safer than cigarettes. Further, no IMiracle brands have ever been identified in the National Youth Tobacco Survey as top brands used by youth.

    “The FDA’s capricious action is not surprising given the agency’s history of regulating vaping products out of existence. It is appropriate for the industry and its more than 10 million adult consumers to demand a clear and thoughtful regulatory regime from the federal government, and they have done so. The FDA has failed to respond.

    “IMiracle calls on the FDA to reverse its decision to place IMiracle products on the import red list. We welcome the engagement and the conversation needed to create a proper and fair regulatory regime around the e-cigarette marketplace that works for all stakeholders.”

    The FDA last week issued “Import Alert 98-06” that states the regulatory agency will detain new tobacco products such as e-cigarettes without marketing authorization at the border.

    The companies impacted would include all importers, manufacturers and transporters of vaping product brands such as Elf Bar, EB Design, Eonsmoke, Esco Bars and Stik that are on the agency’s “Red List.”