Published On: Fri, Apr 10th, 2015

How Consumers, Companies and Governments Are Responding to the Rising Popularity of e-Cigarettes

 

The rapid rise in global popularity of e-cigarettes has effectively created a whole new industry – with consumers, regulators and tobacco companies all reacting in different ways. The sheer size of the demand for e-cigarettes has blown away the predictions of many analysts with the 2015 estimate for the total global industry value coming in at £1.7 billion. In the United Kingdom alone, there has been a rise in the number of e-cigarette smokers from 700,000 just 3 years ago in 2012 to now 1.3 million in 2015. This rise is mirrored across other similar countries as smokers choose for what they perceive to be a more convenient, less expensive and healthier alternative to more traditional methods of smoking, such as regular cigarettes and cigars.

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To Tax or Not to Tax

Governments have been surprised by the sudden rise and rapid growth in popularity of e-cigarettes. Governments in most Western countries have for a long time taxed regular cigarettes very heavily to bring in tax revenue and to discourage people from smoking. However, as many smokers switch away from highly taxed cigarettes to e-cigarettes Governments have been left in a serious quandary as to whether they should tax them or not. On the one hand they desperately do not want to lose tax revenue; after all, as can be seen in the example of the UK Government, vast sums of tax are brought in from cigarette sales – with the UK exchequer bringing in 77% of the cost of a packet of normal cigarettes in tax alone. However, as e-cigarettes are healthier it is much harder for Governments to justify high taxes on this ground alone.

A Gold Rush for eCig Companies

As with any new industry that experiences rapid growth in demand, the e-cig market has seen a vast number of new companies come in to try to grab a piece of the action. Many traditional companies have been left flat footed as new e-cig firms spring up seemingly out of nowhere to offer great new products such as new flavors of e-liquid and new innovations such as the Shisha pen. Over time, it is to be expected that the market will settle down into a structure with a smaller number of larger companies; however, in this early stage, it is hard to be certain which companies will be the most successful in the long run.

Large Increase in Research Funding

Another development that has happened alongside the rise in popularity of e-cigarettes has been an explosion in academic research funding available for research into the effects of e-cigarettes. In particular, research that evaluates e-Cig health outcomes against those of normal cigarettes and cigars has been particularly well funded. Typical areas of research include investigating addictiveness, how effective e-cigarettes are at helping people to completely quit smoking and other areas such as the positive effects of lower levels of in second hand smoke.

Summary

The dust is still to settle on the rise of the e-Cig industry. However, some obvious changes already occurring are smokers switching to e-cigarettes, a large number of new companies seeking to enter the market and a large amount of research funding being made available to study the industry.

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  1. […] The dust is still to settle on the rise of the e-cig’ industry. However, some obvious changes already occurring are smokers switching to e-cigarettes, a large number of new companies seeking to enter the market and a large amount of research funding being made available to study the industry. View full article […]

  2. I don’t believe that ecigarettes should be taxed at the same rate that traditional cigarettes are. eCigarettes have proven to be an extremely effective method to quit smoking as they allow the ability to taper down the nicotine amount over time.

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