Stringent rules on nicotine hamper Australasian market

Ayers rock - digital reflectionsRegulation is holding the Australasian e-cigarette market far behind other regions.

The regulatory situation in Australia and New Zealand has stymied growth, particularly in the cigalike category, according to a new report from ECigIntelligence.

Nicotine-containing products cannot be sold legally in either country, although they can be imported for personal use, subject to limitations. This situation has favoured tank systems, which ECigIntelligence estimates make up 60-80% of the market.

“As electronic cigarettes containing nicotine cannot be sold in either country, the consumer will be more likely to opt for the tank form, where the hardware can be bought separately and imported nicotine added later; something which is harder to do with the cigalike form,” the report says.

It is estimated that less than a quarter of smokers in the two countries have tried e-cigarettes as a result of the legal strictures. This is a much lower proportion than in the UK, for example, where more than a third of conventional tobacco smokers have tried an e-cig.

However, regulation of e-cigarettes continues to evolve down under. “We anticipate that the Australian government will decide to regulate e-cigs specifically as either consumer goods, tobacco products, or therapeutic items; and that a number of the states will ultimately amend their tobacco public-use legislation to include the use of e-cigs in public,” the report says.

What This Means: The Australian and New Zealand markets will likely remain the territory of smaller purveyors and brands for the foreseeable future, at least unless there is major regulatory change. Big Tobacco and larger e-cigarette brands are unlikely to be interested in an area with limitations on nicotine sales and a relatively small population.

– Freddie Dawson ECigIntelligence staff

Photo: Digital Reflections

 

ECigIntelligence does not provide legal, strategic or investment advice. Tamarind Media Limited, the publisher of ECigIntelligence, does not accept any liability or responsibility for information or views published.
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