Without struggle, there is no progress. As the year 2022 reaches its end, the vaping industry in South Africa had to contend with regulatory challenges that will have a bearing on the future of the industry. The Vapour Products Association of South Africa (VPASA) has had to double its efforts of ensuring fair, balanced, and science-based regulation of the industry by government.
For years, the vaping industry has been advocating for government to rethink or relook its tobacco control strategy to include vaping as part of its tobacco harm reduction arsenal. Reason being that it has been proven that not only is vaping significantly less harmful than smoking, but that it can also play a role in reducing smoking prevalence. The eighth series of independent reports on vaping originally commissioned by Public Health England and now by the Office for Health Improvement and Disparities in the Department of Health and Social Care has shown once again that in the short and medium term, vaping poses a small fraction of the risks of smoking. This is not to say that vaping is risk-free, particularly for people who have never smoked. A recent Cochrane Library review has found the strongest evidence yet that e-cigarettes, also known as ‘vapes’, help people to quit smoking better than traditional nicotine replacement therapies, such as patches and chewing gums.
However, 2022 has shown that the vaping industry has a huge and difficult task ahead. The South African government seeks to move ahead with regulation of the industry that is neither science-based nor cognisant of the future of the industry and potentially millions of smokers, who could be deprived of technological advancements that could help them kick their habit.
In September, cabinet approved and gazetted the Tobacco Products and Electronic Delivery Systems Control Bill (TPEDSC). National Treasury is forging ahead with its bid to impose an excise tax on both nicotine and non-nicotine solutions for e-cigarettes, with the effective implementation date scheduled for June 2023.
Tobacco Products and Electronic Delivery Systems Control Bill (TPEDSC).
In September, cabinet approved the bill for introduction to parliament for further processing. For the vaping industry, the gazetting of the bill is a welcomed development, as it confirmed our long-held view that DoH has not been engaging earnestly with stakeholders and that its purported extensive consultations were mere box ticking exercises. Up until the gazetting of the bill in September, the industry had been in the dark regarding its development.
The published bill showed not only the extent to which the Department of Health (DoH) did not consider the extensive submissions it received from the public (DoH reported that it received over 20 000 submissions), but that it is also intent on suppressing the growth of the industry, thereby, putting hundreds of businesses and thousands of jobs at stake.
Despite abundant scientific evidence, DoH still treats vaping and smoking as one and the same. The proposals to impose harsher regulations on smoking such as banning of indoor smoking and certain outdoor places; introduce plain packaging with graphic health warnings or pictorials; a ban on display of products at point-of-sale; and a ban on flavours, may be relevant for smoking but mostly out of place, when it comes to vaping. The proposed ban on flavours other than tobacco may hold negative consequences on efforts to divert smokers away from the habit. It is also worth noting that to date, there has been little evidence to support the claim that the main reason young people try vaping is mainly due to flavours.
Excise Tax on Vaping Products
After releasing a discussion document for public comments in late December 2021. After considering the comments, National Treasury proposed an excise tax of R2.90 per millilitre for both nicotine and non-nicotine solutions. This is despite submissions highlighting the devastating impact that the proposed excise tax will have on the industry’s small businesses, manufactures, and consumers. In addition, National Treasury has made proposals without having conducted a full and transparent impact assessment and cost-benefit analysis of the ENDS/ENNDS market, its dynamics, supply chain, and administrative complexities.
All things being equal, a vaping tax will be implemented by government in June 2023. Consequently, the tax is likely to discourage smokers from accessing harm-reduced alternatives to smoking – ultimately locking smokers in their smoking habit.
Self-Regulation
In the absence of regulation and sharing concerns by the DoH regarding young people under the age of 18, accessing vaping products, VPASA has been leading efforts to introduce some form of self-regulation to the vaping industry. Despite, the DoH refusing to participate in the process, VPASA has made progress working with the South African Bureau of Standards (SABS), to develop national standards for the industry to ensure the safety of consumers. Barring any unforeseen delays, the process is expected to be finalised in the first half of 2023.
In August 2022, VPASA joined the Advertising Regulatory Board (ARB), a self-regulatory body that administers the industry-owned Code of Advertising Practice around the content of advertising. The ARB and VPASA are working on Code inclusions for the Vapour industry, which will focus on youth protection. However, our efforts as an industry alone can never be enough to tackle youth vaping – hence a need for extensive stakeholder collaboration, including government and civil society.
Potential Impact
The vaping industry in South Africa is still in its infancy, and should the bill be passed in its current form, coupled with the excise tax, there will be dire consequences for many small businesses across the entire value chain and job losses as the industry supports over 9500 jobs across direct and indirect channels.
As the DoH and National Treasury continue to ignore scientific evidence in relation to vaping, the country’s tobacco harm reduction prospects will take a further knock and not only will government not achieve its objectives of reducing smoking prevalence in South Africa but may open the door to an illicit trade market. Following the ban on the sale of vaping products in 2020, we saw levels of illicit trade increase, and the DoH’s proposal will see it increase even further and ultimately replace the legal vaping market.
What does 2023 have in store for the vaping industry?
It is without a doubt that 2023 will be even more challenging for the vaping industry from a regulatory point of view, some proposed government measures appear inevitable. Despite the recommendation by the National Council of Provinces’ (NCOP) Select Committee on Finance that the “National Treasury and SARS consider conducting socio-economic assessment studies on the proposed changes in the legislation to better understand the projected impact on public health, business and the economy, and better understand the South African vaping market”, it is likely that the recommendation will be ignored and the implementation of the tax will commence in June 2023 as already stated by National Treasury.
With the DoH determined to see the Tobacco Products and Electronic Delivery Systems Control Bill (TPEDSC) finalised as soon as possible, it will not be beyond the department to try and renege on its agreement to table the bill in National Economic Development and Labour Council (NEDLAC), where its proposals will be subject to rigorous scrutiny by labour, business, and communities. In that regard, the vaping industry should be well prepared to state its case in parliament, where it is hoped that sanity will prevail, and that scientific evidence will triumph over ideological dogma.
On the other hand, VPASA will be looking to step up its efforts to ensure that members’ products are safe for consumers and not easily accessible to people under the age of 18. It is worth repeating that vaping is for adult smokers, wishing to access less harmful alternatives of ingesting nicotine. It is not for young people or people who have never smoked before. 2023 may not be a do or die year for the vaping industry, but 2022 has provided a preview of what is to come and the work that lies ahead for the industry to fight misinformation and ensure its survival.
