India bans e-cigarettes as global backlash at vaping gathers pace (updated)

Godfrey Phillips India

19/09/2019 05:49

(Repeats story that ran late on Wednesday, with no changes to
text)
    * India e-cigarette ban to apply on sale, import,
advertising
    * A blow to Juul, Philip Morris which had India launch plans
    * Adds to global backlash against vaping over health
concerns
    * Vaping association says ban will deter smokers from
quitting

    By Aditya Kalra and Aftab Ahmed
    NEW DELHI, Sept 18 (Reuters) - India banned the sale of
electronic cigarettes on Wednesday and warned of an "epidemic"
among young people, in the latest and potentially biggest move
globally against vaping over growing health concerns.
    The ban cuts off a huge future market from e-cigarette
makers at a time when the number of people smoking worldwide is
declining. It could dash the expansion plans of companies such
as Juul Labs and Philip Morris International  PM.N  in the
country. 
    "These novel products come with attractive appearances and
multiple flavours and their use has increased exponentially and
acquired epidemic proportions in developed countries, especially
among youth and children," India's health ministry said.
    The ban also covers the production, import and advertising
of e-cigarettes - but not the use of them. It comes at a time
when vaping is facing increased scrutiny in other countries. 
    The United States last week announced plans to remove
flavoured e-cigarettes from stores, warning that sweet flavours
had drawn millions of children into nicotine addiction.
 urn:newsml:reuters.com:*:nL2N2620YW
    The Indian prohibition will be imposed through an executive
order and will include jail terms of up to three years for
offenders. 
    India has 106 million adult smokers, second only to China in
the world, making it a lucrative market for companies making
vaping products such as U.S.-based Juul and Philip Morris, which
manufactures a heat-not-burn tobacco device. 
    The ban was announced by Finance Minister Nirmala Sitharaman
at a news conference, where she showed various types of products
to the media, including a Juul vaping device, which resembles a
USB flash drive.
    Juul had plans to launch its e-cigarette in India and has
hired several senior executives in recent months. Philip Morris
also has plans to launch its heat-not-burn smoking device in
India, Reuters has reported.  urn:newsml:reuters.com:*:nL3N1ZU40E
    A spokeswoman for Juul in India declined to comment. Philip
Morris did not respond to a request for comment.
    Juul, in which tobacco giant Altria group  MO.N  owns a 35%
stake, is already facing government scrutiny in its home market
and elsewhere. In China, Juul said on Tuesday its products were
not currently available on e-commerce websites, days after it
entered the market.  urn:newsml:reuters.com:*:nL3N2683M9 
    
    HEALTH DISPUTE
    India's vapour-products market was valued at $57 million in
2018, according to data from Euromonitor International. Before
the ban, the research group estimated the market in India would
grow by nearly 60 percent a year up to 2022.
    Shane MacGuill, head of tobacco research at Euromonitor in
London, said the India ban could push other countries to follow
suit, hurting the global vapour industry.
    "India is obviously a market of huge potential for vapour
products," he told Reuters. "This ban would decisively cut off
access to that potential growth cohort for companies like Juul
Labs and PMI (Philip Morris International)." 
    The global market for e-cigarettes is still small compared
to cigarettes, but is growing rapidly. Last year global
cigarette sales totalled more than $713 billion, compared to
$15.7 billion for vapour products, according to Euromonitor. By
2023, the vapour category is projected to more than double to
$40 billion, while cigarettes are expected to decline slightly. 
    Advocates for e-cigarettes say vaping, which usually
involves inhaling a vapour formed from heating up a liquid
containing nicotine, is far less harmful than smoking tobacco. 
    But many tobacco-control activists are opposed to the
devices, saying they could lead to nicotine addiction and push
people towards consuming tobacco.
    More than 900,000 people die each year due to
tobacco-related illnesses in India, home to about 1.3 billion
people. 
    The Association of Vapers India, an organisation that
represents e-cigarette users across the country, attacked the
government's decision, saying it would deprive millions of
smokers of a safer solution to cut back on smoking. 
    
    COURT CHALLENGE?
    The ban order will impose a jail term of up to one year and
a fine of 100,000 rupees ($1,404) for first-time offenders. A
repeat violation would attract a jail term of up to three years
and a penalty of up to 500,000 rupees, the government said.   
    The ban would cover the manufacture, import, sale,
advertisement and distribution of e-cigarettes. But it would not
apply to the end users of such devices, Vikas Sheel, a senior
official at India's health ministry, told Reuters.  urn:newsml:reuters.com:*:nL3N26933N 
    "Over a period of time, people will not get their (vape)
refills, so they will become responsible," he said.
    The government expects the ban order to be challenged in
court, but was prepared to defend its decision, Sheel added.
    Shares in ITC  ITC.NS , India's top cigarette maker, ended
up nearly 1%, while its rival Godfrey Phillips  GDFR.NS  surged
5.2%. E-cigarettes form just a tiny part of their product range.
    The ban order needs to be approved by the president before
it takes effect, but this is typically a formality.  
    Such executive orders are typically issued as an emergency
measure when Indian parliament is not in session. The ban order
could lapse if it is not approved when lawmakers convene against
in the next session of parliament, which will most likely be
held in November.      

 (Reporting by Aditya Kalra and Aftab Ahmed; Additional
reporting by Mayank Bhardwaj and Manoj Kumar and Chris Kirkham;
Editing by Pravin Char)
 ((aditya.kalra@thomsonreuters.com; +91-011-49548021; Reuters
Messaging: aditya.kalra.thomsonreuters.com@reuters.net (Twitter:
@adityakalra))