China mulls bringing e-cigarette regulation in line with traditional tobacco products (updated)

Smoore International Holdings

22/03/2021 10:01

(Adds background, context)
    BEIJING, March 22 (Reuters) - Two of China's regulators plan
to bring the rules governing the sale of e-cigarettes and other
new tobacco products in line with those for ordinary cigarettes.
    The Ministry of Industry and Information Technology (MIIT)
and China's State Tobacco Monopoly Administration, posted online
the draft regulations that could potentially curb a fast-growing
industry.
    In 2019, a string of Chinese e-cigarette companies emerged
targeting the domestic market, following the overseas success of
the Juul.
    The most successful among them, RLX Technology Inc  RLX.N ,
raised $1.4 billion in an IPO in January that valued the company
at $35 billion.
    RLX Technology did not immediately respond to a request for
comment.
    A huge market of smokers and its large electronics
manufacturing industry makes China a promising market for the
e-cigarette industry.
    Yet the sector exists in precarious regulatory area. 
    China's tobacco industry is controlled entirely via a
government monopoly, and strict controls determine what
companies and retailers can produce and sell cigarettes.
    Cigarette sales generated 5.45% of China's overall tax
revenue in 2018. For this reason, industry experts have long
expected the state to intervene in the business operations of
China's private e-cigarette companies.
    In November 2019, Chinese regulators forbid e-commerce
platforms from selling e-cigarette products online. The ban
swiftly curbed the growth of the sector, and many brands focused
their business toward offline sales.
    

 (Reporting by Josh Horwitz and Yilei Sun, editing by Louise
Heavens)
 ((Y.Sun@thomsonreuters.com; +86 10 66271262; Reuters Messaging:
y.sun.thomsonreuters.com@reuters.net))