"We run the risk of e-liquid prices skyrocketing - and the self-mixing market growing uncontrollably."
So says Kim Dabelstein Petersen, chairman of DADAFO - Dansk e-Damper Forening - in a comment on the excise duty on nicotine pouches and nicotine-free e-liquid that the European Commission is expected to decide on next week.
In the coming week EU Commission is expected to decide which excise duties will apply to nicotine products in the future. The current proposal will not only increase the price of cigarettes, roll-your-own tobacco and nicotine pouches, but also affect nicotine-free e-liquid - the base that vapers use to mix their own so-called longfills.
As VapeCheck has previously revealed, we want EU Commissions to include excise duties on smokeless nicotine in its long-term financing plan in the future. According to a leaked impact assessment, common EU taxes on nicotine pouches and e-liquid - including nicotine-free - should be Provide around €290 million to the EU budget.
Longfills in the tax trap
The goal of taxing nicotine-free e-liquid, according to the analysis, is to get the "DIY system" Do It Yourself - to life. It has gained momentum since the Tobacco Products Directive came into force for nicotine e-liquid. In practice, it's about longfills and shortfills - Nicotine-free e-juice that the user mixes with nicotine base to achieve the desired strength.
"Without longfills, the only real product on the market would be very high nicotine e-liquid in small 10ml bottles. It's expensive, unnecessary and harmful to the environment," says Kim Dabelstein Petersen.
Currently, only small bottles of nicotine are taxed in the vast majority of EU countries. However, EU experts are now proposing a minimum tax of €2 per ml for liquids with up to 15 mg/ml of nicotine and €4 for liquids above (max 20 mg/ml). In addition, it is proposed that nicotine-free e-liquid will also be subject to a tax of €2 per ml.
Hardest battle in the free markets
The tax will particularly affect markets where nicotine-free e-liquid is not already taxed and where there are no restrictions on bottle sizes for in-store sales. However, Denmark already has some restrictions.
"In Denmark, we can buy nicotine-free longfills in 20ml bottles. In practice, the proposal means that the price of a longfill will increase by at least DKK 20," says Kim Dabelstein Petersen.
However, the impact assessment does not mention whether pure bases such as glycerine (VG) and propylene glycol (PG) will also be subject to the tax. Something that, according to Kim Dabelstein Petersen, could be crucial:
"If that happens, prices will of course skyrocket. Normally, users mix their 20ml longfill with 10ml nicotine base and 30ml VG and PG to get 60ml e-liquid with 3mg nicotine. PG and VG currently cost around DKK 4 per ml in a vapour shop. If these liquids are taxed, we're talking about a doubling of the price."
EU ignores reality
A similar system already exists in Finland. But there, the tax on PG and VG only applies if the liquid is sold in a vapour shop - or as the rules say: "if the intention is to use it in an e-cigarette".
"But PG and VG are also used in many foods and in the healthcare sector. The pharmaceutical industry and food manufacturers are unlikely to accept such heavy taxation. So if I buy my glycerine from a pharmacy or health food store instead, I'll probably avoid the tax."
According to Dabelstein, this could lead to more people choosing to mix e-juice themselves - outside the controlled environment offered by specialised vapor shops.
"If the EU wants to hit the D.I.Y. market, they are missing the mark. Their understanding of the steam market is catastrophically poor," he says.
Tax policies that slow down the smoke-free transition
The leaked impact assessment on the planned excise duties on smokeless nicotine is expected to generate around €290 million for the EU budget. It also aims to prevent nicotine users from switching from cigarettes to smokeless products for tax reasons.
Sources:
