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As of November 22, all EU states are obliged to integrate HTP flavor bans into their national laws.
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Vivien Wenzel, sales manager, Hertz & Selck. Photo credit: Hertz & Selck
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Sergi Riudalbas of Tobacco Intelligence. Photo credit: Tobacco Intelligence
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JTI’s Ploom Flow device and Camel-branded “Fruity Berry” flavored sticks. Photo credit: JTI
The ban on “characterizing” flavors for HTPs is putting companies into yet another tight corner.
Following the European Union’s EU prohibition of “characterizing flavors” in combustibles, the then still relatively nascent category of heated tobacco products (HTP a.k.a. “heat-not-burn”) remained one of the last resorts for consumers adverse to the idea of restricting themselves to “boring” tobacco flavors only. But even that bastion is now falling with the EU’s ban on “characterizing” HTP flavors, which basically encompasses any variety other than tobacco.
A veritable legislative mess
In its earlier directive 2014/40/EU, the EU had allowed flavors for all tobacco products except cigarettes and roll-your-own tobacco. But then, the European Commission (EC) brought forth directive EU2022/2100, overriding the provisions set out in the earlier regulation. And EU2022/2100 now also explicitly included HTP in the flavor prohibition, according to Sergi Riudalbas, an EU law and policy expert attached to Tobacco Intelligence, a sub division of UK-based research firm, Tamarind Media Limited. With its publication in the EU Official Journal on November 3, 2022, directive EU2022/2100 entered into force, obliging all EU member states to integrate the HTP flavor ban into their own national laws.
It is crucially important to clearly understand at this point the distinction between the date of a EU directive’s “entry into force,” i.e. its official publishing date in the journal, and the “date of application,” i.e. when it is actually enshrined in individual member states’ legislations and thus can start being enforced on national levels. After issuing any directive, the EU generally sets an implementation deadline by which member states “should” have enacted it in their respective legislations. In the case of the HTP flavor ban, that date was July 23, 2023.
Sluggish implementation
Interestingly, only a handful of the 27 members observed that deadline; many others missed it. Spain, for example, only transposed it into national law in January 2024, i.e. long after the deadline. Slovakia got around to it even later, in February 24, 2024. Countries like Croatia, Estonia, and Luxembourg presently merely have their respective bills ”under consideration” while other EU members such as Austria and Poland have not even yet begun the process of working out and deliberating any bill in their parliaments. It all seems a veritable mess.
And then there also are four member states – Bulgaria, Cyprus, Greece, and Italy, which in a joint statement have voiced disagreement with some of the directive’s technicalities (but not the HTP flavor ban per se!). According to Riudalbas, they raised two arguments:
- The EU directive set an “unrealistic timeline for transposition,” meaning the four countries are in the opinion that the EC’s deadline for implementing the HTP flavor ban nationally was too tight;
- The EC “acted beyond its delegated powers set out under directive 2014/40/EU by introducing an essential element,” meaning that the EC incorporated in its amendments a legal definition for what constitutes “heated tobacco products”; and that is something that is strictly the prerogative of the EU legislative bodies, i.e. parliament and council.
However, Riudalbas said he did not believe that deferred transposition of the ban by some member states constituted their outright rejection of this specific EU directive. “For if they failed to [eventually] implement it, they would be shooting themselves in the foot,” he said. EU law prescribes certain infringement penalties on defaulting member countries that do not comply with EU requirements, including not transposing a directive. “Rather, the slow pace of EU-wide implementation [of the HTP flavor ban] should be attributed to sluggish national parliamentary procedures and bureaucracies, potentially even a lack of awareness among some of the countries concerned,” he said.
Yet there’s more to the saga. The EC allegedly having “acted beyond its delegated powers” apparently is such a contentious point that even “two judicial cases against the HTP flavor ban directive have been brought before the EU’s Court of Justice,” according to Riudalbas. And if push comes to shove, it is not inconceivable that the court eventually might arrive at the judgment that the EC indeed did act unlawfully. “If that happens, the entire directive could be declared null and void.”
JTI: “The ban is not proportionate”
But, how is the ban affecting commercial stakeholders that either are active in member states where it either already has been transposed into national law or where a bill is in the making? An excellent example for this “caught up in the situation” scenario is JTI, which markets in the EU heated tobacco sticks (HTS), including flavored varieties, both under its Camel and EVO brands. Both varieties are used with JTI’s Ploom device.
“The impact of the characterizing flavor ban on our business is still limited due to our geographic footprint in EU countries where the new regulation is [already] implemented,” said a JTI spokesperson during a recent interview with Tobacco Asia. “Nevertheless, we strongly believe that such a measure [i.e. the ban] is not proportionate, is not based on scientific evidence, and may fuel illegal tobacco trade while depriving adult consumers of choice.”
Camel sticks are presently available in Czech Republic, Greece, Italy, Lithuania, Poland, Portugal, Slovakia, and Spain. Some of these countries have already implemented the ban, which forced local retailers to take Camel sticks with characterizing flavors off their shelves.
“Regulatory adoption timelines vary among EU states. We work together with our distributors and retailers to support them through this period and ensure that our heated tobacco products are sold in full compliance with all applicable rules and regulations,” explained the JTI spokesperson. Meanwhile, EVO sticks are marketed by JTI in Germany, Hungary, and Slovenia. At least two of these, Germany and Slovenia, have begun enforcing the ban. But Tobacco Asia did not succeed in digging out reliable information about the situation in Hungary. While some sources claimed HTP still were considered “smokeless tobacco products” in Hungary and are thus exempted from the ban, other sources insisted the ban had been implemented in the meantime.
While JTI’s comments concerning the concrete impact on its EU heated tobacco business may have been somewhat cautious, the company on the other hand was quite outspoken about its position regarding the flavor ban in general. “There is no justifiable evidence to suggest that banning characterizing flavors of heated tobacco products will lead to a reduction in tobacco use,” the spokesperson told Tobacco Asia. “JTI does not support banning any flavor in reduced risk products (RRPs) as we respect consumers’ freedom of choice. Adult consumers should be able to access a wide range of RRPs manufactured to high quality and safety standards that meet [their] preferences and empower consumer choice via distinctive tastes proprietary to our brands.”
Hertz & Selck: already feeling the impact
Another stakeholder, German flavor company Hertz & Selck, didn’t beat around the bush either. “The impact is already being felt, and part of our product portfolio will certainly be affected directly, too,” admitted the firm’s sales manager, Vivien Wenzel, during her talk with Tobacco Asia. “This could well result in a noticeable decline of demand for our HTS flavors, which in turn would negatively impact our income,” she said. To compensate for that, Hertz &Selck could be forced to adjust its marketing strategy by developing flavors for other applications as well as venturing into new markets outside the EU, where regulations are less strict. Compliance with the new regulatory requirements also might lead to additional regulatory affairs work and increase raw material sourcing efforts and cost.
Of course, it’s not all gloom and doom only. There also is a somewhat brighter side to things. For instance, demand for tobacco flavors could rise far above present volumes, according to Wenzel. Furthermore, the ban could be an incentive for flavor manufacturers to develop innovative solutions that are attractive to end consumers while simultaneously being law-compliant. “It’s well possible that in the process mainstream and niche products will position themselves side by side,” Wenzel said. But she also added that “enhanced r&d and expanding tobacco flavor portfolios will become necessary in order to remaining competitive.”
Although Hertz & Selck “noticed isolated changes in buyer behavior,” with a few procurers purchasing lower volumes as their respective companies down adjusted their production outputs, the German flavor manufacturer has so far “not experienced substantial [financial] losses.” Wenzel also said that the continued ability to supply tobacco flavors offered Hertz & Selck “some stability during this transition.” However, that grace period will be over once all 27 member states have implemented their respective bills and enforce the ban.
In preparation for that, Hertz & Selck is pursuing several strategies. For one, the company plans to strengthen its footprint in Eastern Europe and other non-EU countries. Secondly, apart from tobacco flavors the firm intends pouring more investment into developing “new flavors for alternative NGPs as well as flavors for other product sectors such as food and beverages.” Lastly, Hertz & Selck will work even more closely with its customers to better understand their needs and increasingly offer bespoke ”innovative and individual flavor solutions” so the firm can weather the brewing storm