Sunday, 17 July 2016

Norway status update: The Norwegian government don't understand the vaping market

About a month ago I wrote about the new Norwegian Tobacco Act proposal, which is basically the Norwegian implementation of the TPD. On July 1st the government published a request for comments and a some more details in the consultation document (in Norwegian only). The is not that much new information in the document, it's basically just repeating the flawed reasoning behind a lot of the proposed changes as I've discussed earlier. There are, however, some more information on the planned registration scheme, and they've suggested some numbers.

First of all, in order to sell tobacco products over the internet, or actually in any way that means sending the products to the customer, the vendor has to register with the health authorities. They also need to appoint a person, in Norway (from what I can understand), that is responsible for making sure the products meets the product requirements before they reach the customer, and they need to have a system that makes sure the customer is over 18 years old at the time they order. I addition to this, anyone delivering the products must have a system in place for checking the age of the customer, meaning it needs to be handed over to the customer in person. The registration fee is set to 2500 NOK ($295 using current exchange rate) at the time of registration and 1000 NOK ($118) every year to stay registered. From what I can see this goes both for cross-border and domestic sales. These fees doesn't seem that bad to me to be honest. When it comes to the requirements for anyone delivering it, my guess as of now is that this means we have to go pick up our packages at the post office (which we already do in quite a few cases where they're too big to fit in the mailbox), and we have to show some ID verifying our age when we do. At least for packages going through the Norwegian Postal service I don't see a problem with this, they've already got a system for checking age in place as they do this when delivering alcohol that can be ordered from the government owned alcohol retail monopoly (yeah, we have that here in Norway). I may be wrong though and these provisions may be intended to work in another way, but if I'm right I don't think this part will be a major problem for vendors or vapers.

The above mentioned rules will affect all tobacco products, not just e-cigarettes. Then there are some e-cigarette specific proposed rules that probably be a lot worse to live with. From what I've read most, if not all, EU countries implementing the TPD will require every vaping product to be pre-market approved and registered, and of course this goes for Norway as well. The product requirements are the ones we all know from the TPD by now, which I've gone through in my last post about this, so I'm not going to do that again in detail. It is worth mentioning, however, that a user manual in Norwegian with quite a few specific requirements (warnings, toxicity information, the width of the filling holes to make sure the user use the right kind of bottle etc.) is required, as is some health warnings and a reference to Slutta.no, which seems kind of weird to me as this is a national stop smoking service which have a history of not recommending e-cigarettes. Products need to be registered 6 months before they are put on the market. The application for each product needs to contain information about the contact person responsible in Norway, all ingredients, toxicological data on the ingredients and the emissions, how much nicotine is delivered, the components of the product, the production process, the manual and a statement where manufacturer takes full responsibility for the products quality and security under normal circumstances. It is the manufacturers and importers of the product that needs to register the product... and pay the fees. And the fees that they propose here are one of the big problems. To register a product you need to pay 47600 NOK, thats $5616. If you make a significant change or update to the product (what this means remains to be seen) the fee for registering the change is half of this, 23800 NOK ($2808), and on top of this there is an annual fee of 18850 NOK ($2224). The registration fee is set to cover the Norwegian Medicines agency's costs that are estimated to around 9,5 million NOK and an estimate of 200 new registrations in 2017. Anyone with just a tiny bit of knowledge about the vaping market today can see how wrong this is. First of all, where on earth did they get the 200 number? I talked to one of the vendors in Norway about this an he has around 1200 products in his store and estimates that there is around 20000 products on the market and maybe 10000 more each year. I don't think he overestimates... at all. Then I asked in my local shop how many Kayfun 5s he'd take in if he was to take that product in... "maybe 3 or 4", he answered. Then... how many of the products that you could buy 6 months ago is still on the market with no changes? My friend, the first vendor I talked about, told me he had removed 300 products so far this year... cause they're out of date. I guess you can all see where I'm going with this. This would basically mean no high end products cause you would just loose money trying to sell them in Norway and not much innovation going on cause making improvements to a product will cost you a lot. Big Tobacco and their far from innovative cig-alikes, however, will thrive under such regulations as their much more effective competitors are effectively shut out of the market. These ridiculous fees are based on totally wrong assumptions and shows that the government has no understanding of the market they are trying to regulate, which in my opinion should be one of the basic requirements for a regulator... understanding the market that is.

The Norwegian Government are blowing their own trumpet, claiming that they will now allow e-cigarettes to save the lives of many smokers. They claim that their regulations will just make sure that the products are safe... and of course that they fight heroically to make sure no children or teens start vaping. But again, through this document, and their proposals, they show that this is not about health, it's about money. They focus on how they are going to cover their losses. However, to me it seems like they fail totally at seeing the bigger economical picture as well. The Norwegian Directorate of Health have estimated that the annual costs of smoking in Norway is somewhere between 8 and 80 billion NOK. Now even if we subtract sin taxes of 7 billion a year there is still a lot of money to be saved here. The Directorate estimates savings of 2-3 billion NOK every year for each percentage point the smoking prevalence goes down. Then compare their cost of 9,5 million to these numbers... it's peanuts. If the government had decided to cover most of this, just leaving the fee at a reasonable amount, enough to make sure they are not encumbered with a gazillion unrealistic applications, it would have been the best investment they would have made ... ever. The problem I think, is that current government probably will not see the result of their investment while they are still in power. So they work hard to make it look like they're actually doing something for health, when in fact the best thing they could have done for public health right now, is close to nothing. Vaping wasn't big pharma's idea, it wasn't tobacco control that came up with it and it certainly wasn't the government. I think that is what they all have a problem accepting.

Vapour UK

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