China plans to strengthen its laws on e-cigarettes and other new tobacco products, treating the products more like traditional cigarettes.
A statement released by China’s Ministry of Industry and Information Technology (MIIT) announced that a clause saying “regulations on e-cigarettes and other new tobacco products shall be implemented with reference to the relevant provisions on cigarettes in the regulations,” is to be added to the Detailed Rules for the Implementation of the Tobacco Patent Sales Law of China as Article 65.
Following the announcement of the new rules, stocks of Chinese vape manufacturers took a significant hit. Smoore International Holdings’ stock dropped as much as 39%, China Boton Group dropped as much as 40%, and RLX Technology dropped 48% one day after the announcement. On the other hand, China Tobacco International, the international unit of CNTC, rose by 24%.
Working together with the State Tobacco Monopoly Administration (STMA), MIIT says the new rules will effectively regulate the production and operation of e-cigarettes as well as solve the quality and safety risks and false advertising problems related to e-cigarettes.
The revision is open to public opinion until April 22 this year.
Speculation is rife in the industry over what exactly the new rules will entail, ranging from: state-owned China National Tobacco Administration (CNTC) taking over distribution requiring e-cigarette companies to apply for licenses to produce and sell, similar to the set-up between tobacco product manufacturers and STMA; e-cigarette additives standardized the same way as cigarette and cigar additives; and what this means for taxes on e-cigarettes.