It has recently been reported that Liberty Flights Ltd., a British maker of electronic cigarettes, is facing a problem of counterfeiting. E-cigarettes are being cloned using cheaper material, and are then being sold at cheaper prices. These imitation e-cigarettes have started appearing in markets around the world.
This problem of counterfeit is also something that the brand Louis Vuitton faces.
According to law enforcement agencies and makers of the products, illicit trade in electronic cigarettes is on the rise across the developed world, which could result in e-cigarettes becoming regulated.
Apart from counterfeiting, scammers are using bogus e-cig batteries, as well as liquids containing dangerously high levels of nicotine as part of their plot to produce illegal, low cost e-cigarettes. Forensic experts working for British American Tobacco PLC say they have even seen unlicensed e-cigarette versions of their regular tobacco brands, including Kent and Vogue.
At the moment this is a relatively small problem but there is fear that illicit trade in e-cigarettes will grow as the demand rises. Global sales of genuine e-cigarettes were worth $7 billion at the end of 2014 (compared with $800 billion for the regular tobacco market) and are forecast to reach $51 billion by 2030, according to Euromonitor International.
For major tobacco companies who have invested in e-cigarettes, this could be a very big problem. Immitation, untested products have the ability to undercut their sales.
A black market has also developed for the components used in e-cig vaporizers. This refers to the detachable batteries and refillable cartridges found in e-cigarettes. A lot of the e-cigarette sales are driven by these components and demand has risen sharply over the past year. This also includes cheap, generically branded liquids for e-cigarettes.
Authorities have no become aware of the dangers of illicit trade in e-cigarettes and in response, they are proposing stricter regulation. European Union directives come into force next year that aim to standardize many features of e-cigarettes sold across the region, including a lowering of the maximum nicotine content of the liquid and a reduction in the size of the cartridges.
The aim is to reduce the number of low-quality, dangerous products and improve e-cigarette safety. According to Enrico Brivio, spokesman for the European Commission for Health, this shouldn’t have an effect on prices. However, there is a fear by e-cigarette manufacturers who worry that these new measures will actually increase illicit trade.
Only time will tell.