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Europe rejects curbs on e-cigarette sales

Tuesday, 8 Oct 2013 | 6:42 AM ET
Electronic cigarettes.
Getty Images
Electronic cigarettes.

European lawmakers have rejected proposals that aimed to clamp down on how the latest gadget to help smokers give up tobacco should be sold.

Electronic cigarettes, along with other nicotine-containing treatments, would have been one step closer to being classed as a medical product across the 28-country European Union if updated proposals for tobacco regulation were voted through by the European Parliament on Tuesday.

However, the proposal was rejected by 362 votes to 298. Lawmakers did vote in favor of product safety controls and regulations for marketing and advertising.

The new classification would have meant the product's availability to shoppers could have been be limited from 2014. Those below a certain nicotine content would have still been allowed on the consumer market but with health warnings.

Speaking after the vote, the European Conservatives and Reformists Group said that this was a victory for common sense.

(Read More: E-cigarettes could significantly cut tobacco use: Study)

"Many electronic cigarettes are produced by small businesses who would simply not have been able to afford the strict authorization demands the EU would placed on them. We could not stand by and allow MEPs to put companies out of business and people out of work," said Conservative MEP Martin Callanan on the group's website.

"It makes sense to find ways of making tobacco less attractive to younger people. Although some of the measures seemed on the zealous end of the scale, we are willing to accept them, but we could not have supported a measure that would cost jobs and push people off of electronic cigarettes and back onto the real thing."

E-cigarettes use heat to vaporize a solution containing nicotine into an aerosol mist and are designed to replicate smoking behavior without the use of tobacco. Tobacco is the most significant cause of premature death in the EU, responsible for almost 700,000 deaths every year, according to its own statistics.

(Read More: An e-cigarette boom could be around the corner)

While many were against the draft proposals, some lawmakers stated that their availability increases the number of people who could be attracted to smoking and hit out at glamorous advertising campaigns promoting the new technology.

Can tobacco companies adapt to e-cigarettes?
Erik Bloomquist, senior analyst at Berenberg, comments on the rise of e-cigarettes and what it mean for traditional tobacco companies.

"I have no doubt at all that electronic cigarettes could set millions of non-smokers on the path to nicotine addiction and should therefore be regulated as medical products," Struan Stevenson, and MEP for the Scottish Conservatives said during the debate.

"It's clear that less than a decade after their first appearance, they've already become a multibillion dollar industry with the major tobacco giants snapping up the key e-cigarette companies and with glamorous movie stars appearing in adverts. Former playboy models now advertising e-cigarettes, huge full page adverts, this is why Norway and Brazil have banned e-cigarettes altogether."

Top state law enforcement officials in the U.S. have also urged increased regulation on e-cigarettes in a market that has seen blossoming growth. Analyst Bonnie Herzog of Wells Fargo Securities believes "conservative data" already indicates that sales of e-cigarettes this year in the U.S. have already reached $700 million from traditional retail outlets like convenience stores. Estimated online sales of $500 million to $625 million could mean that total year-to-date sales would actually be above $1 billion, she said.

(Read More: New Technologies That Could Change the World)

But many health organizations remain anxious about the sudden uptake of the product, before any rigorous, peer-reviewed studies are available which support the use of e-cigarettes as a safe and effective nicotine-replacement therapy.

By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81

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