New Zealand ‘s associate health minister: removable battery rule for vaping, heated tobacco devices lifted by cabinet. Photo credit: New Zealand Parliament.
The New Zealand government has been forced to roll back part of its tobacco control framework to settle a lawsuit, while simultaneously extending a lucrative tax break that overwhelmingly benefits tobacco giant Philip Morris International (PMI). The dual moves have triggered sharp criticism from public health experts, who say the coalition is prioritizing industry interests over Smokefree Aotearoa 2025 goals.
On August 14, associate health minister Casey Costello confirmed that the cabinet has revoked the regulation requiring all vaping and heated tobacco devices to have removable batteries. The rule, passed in 2023, was due to take effect fully in October 2024 and aimed to reduce fire and explosion risks. But enforcement was frozen after the country’s largest vape retailer, Mason Corporation, owner of the Shosha chain, filed a judicial review last November.
Mason Corp’s legal challenge argued that the regulation was unlawful, unreasonable, and procedurally flawed. The company claimed the Ministry of Health had failed to carry out a proper regulatory impact assessment, had ignored international electrical safety standards, and had not adequately consulted affected businesses before introducing the mandate. In its filing, Mason contended that the law disproportionately harmed New Zealand retailers while advantaging large multinational manufacturers with greater capacity to redesign devices. The firm also warned that the requirement would sharply reduce consumer choice by forcing compliant products off the market.
Cabinet papers released by the Ministry of Health show officials advised that withdrawing the measure was the “best way to resolve” the litigation. The revocation, which comes into force on September 1, does not affect the separate ban on single-use vapes introduced on June 17.
Critics say the regulatory retreat highlights the fragility of New Zealand’s vaping law package and exposes the government to claims of bending to commercial pressure. “This is a classic case of industry pushback being rewarded,” said one University of Auckland academic, noting that independent vape brands had largely adapted to the rule, while PMI’s IQOS heated-tobacco device was caught out.
The move coincided with a second policy shift: the government has extended the 50% excise reduction on heated tobacco products (HTP) until July 2027. Originally launched in July 2024 as a one-year “trial,” the scheme was intended to test whether cheaper HTP could encourage smokers to move away from cigarettes.
Treasury advice released under the Official Information Act shows that PMI is the sole supplier of HTP in New Zealand, effectively giving it a monopoly. Media reports estimate the fiscal cost of the tax break at more than NZ$300 million (US$177.92 million) if it continues through 2029.
Officials have also raised doubts about the public health case for subsidizing HTP. The Ministry of Health advised that evidence on HTP safety and cessation potential remains limited, warning that the products may divert smokers from less harmful vaping options. A March 2025 briefing noted that Philip Morris initially did not pass the excise reduction on to consumers, undermining the measure’s intent.
Nevertheless, minister Costello defended the extension, arguing that the trial period had been distorted because IQOS devices were withdrawn from the market for months due to the removable-battery requirement. “Any report back would be meaningless as the cheaper HTPs were only available for two months,” her office told Radio New Zealand. The government now expects a full review in 2027.
Opposition parties and health advocates see it differently. Labour health spokesperson Ayesha Verrall accused the coalition of gifting hundreds of millions to a multinational tobacco company while the health system struggles. Health Coalition Aotearoa has called for a formal inquiry into tobacco industry influence on policymaking.
The controversy deepened after documents surfaced alleging PMI had sought to shape legislation through links with New Zealand First, the junior coalition partner. While NZ First leader Winston Peters rejected the claims as “baseless,” the optics of regulatory retreats and extended subsidies have intensified scrutiny.
For now, the disposable vape ban remains intact, but the removal of the battery rule and the extended HTP tax break underline a policy environment in flux. As one health campaigner put it: “The only clear winner right now is Philip Morris.”