Context

On Jan 4 2023, the Ministry of Health opened a public consultation seeking input on their proposed plans to implement a defacto ban on smoked tobacco in New Zealand, and new vaping regulations aimed at addressing underage use and general product safety.

New Vaping Regulations

The consultation document notes that underage use of vaping products remains a concern, so 3 measures aimed at addressing the appeal of vaping to youth were proposed. 

1. Restricting flavour names
2. Defacto Ban on single use disposable vaping products 
3. Proximity restrictions on where a Specialist Vaping Retailer can operate

Proposal to restrict the flavour names of vaping products to minimise their appeal to youth

The consultation document raises concerns over youth vaping and proposes to restrict the flavour names of vaping products to minimise their appeal to youth by introducing a requirement that the variant name on a vaping substance or its packaging must only be a description of the product’s flavour, and that the flavour must be described using one or more flavours from permitted segments on a prescribed e-liquid flavour wheel, adapted for New Zealand from a published wheel, for example:

 

Our Response: 

Flavours are to some extent ‘Generic’ but they play an important role for adult smokers transitioning from smoked tobacco products and are only permitted for sale in R18 SVR retail premises.

While we appreciate some flavour descriptors like "Unicorn Vomit" add very little value to flavour navigation, we disagree that flavour descriptors like "Rich Tobacco", "Fresh Mint" or "Tropical Mango" pose a risk to youth vaping in excess of the benefits these types of descriptors have in helping adults navigate to a flavour profile that works for them.  

Vaping products are designed to appeal to a broad range of adult ex-smoker / smoker’s consumer preferences. This has resulted in a wide range of vaping products being available in New Zealand that require the ability to help adult consumers navigate to a suitable flavour profile for their needs by way of flavour descriptors.

Recommendation

Rather than prescribing a “permitted list” of flavour descriptors, we recommend introducing a “prohibited” flavour name list; whereby the Ministry of Health can test the assumption that availability of certain flavour names in R18 specialty vape stores such as ‘Unicorn Milk’ is correlated to the level of youth vaping.

The benefits of this approach are:

• Much quicker to implement vs blanket product name changes for any flavour descriptors that don’t match a name on a constrained flavour wheel.
• Reduces the risk of a defacto flavour ban for any flavour profiles not added to the ‘flavour wheel’

• Less consumer confusion resulting from flavour descriptor name changes that are not deemed as appealing to youth.

Proposal to extend product safety requirements for disposable vaping products

The consultation document raises concerns over youth vaping and proposes to extend product safety requirements for disposable (single use) vaping products.

Proposed product safety measures include:

1. Child Safety Mechanisms
2. Removable/Replaceable Batteries
3. Substance Container Labelling
4. Reduced Nicotine Concentrations in non refillable products 

The rationale for the proposed extended safety requirements in the consultation document has no link to reducing the appeal of vaping to youth, runs a high risk of adverse consequences to other vaping product categories and will result in inexperienced ‘average’ users being forced to switch to vaping products generally reserved for ‘advanced’ vaping product users who receive extensive product safety education from Specialty Vape Retailers upon sale.

If the Ministry of Health wishes to ban disposables to address concerns over youth vaping and product safety due to the low cost / mass produced nature of single use vaping devices, we recommend regulations are amended to prohibit single use disposables vaping devices rather than introducing new standards that disposable vaping devices cannot comply with to the detriment of reputable reusable vaping devices responsibly distributed in New Zealand.

Child Safety Mechanisms

The consultation document proposes that all vaping devices must have a mechanism to prevent the device being activated or accidently operated by a child.

Introducing a mechanism to prevent a disposable vaping device from being activated or accidently operated by a child will not reduce the appeal of vaping to youth.

A “mechanism” is quite vague but we assume refers to any feature from a simple button to an inbuilt age verification system on the vaping device.

Button Mechanism

• If youth do experiment with a vaping product that contains a ‘button’ mechanism to prevent accidental operation, they will eventually work out how to press the button.
• There are several reusable vaping devices (both prefilled and refillable) which don’t have a ‘button mechanism’ sold in thousands of stores that have helped a significant number of ex-smokers successfully switch to vaping. 
• One of the key reasons for these products success in New Zealand is their ease of use. The more complicated vaping devices are to operate, the less effective vaping becomes at lowering smoking rates.
• Vaping devices sold in New Zealand already include instructions for safe operation, including warnings to keep devices away from reach of pets or children when not in use.

Inbuilt Age Verification System

• A small number of vaping products now discontinued have unsuccessfully tried to include a “device lock” which prevents operation of a vaping device until the customer has created an online account with the manufacturer that verifies their age using a passport or drivers licence against a government database, then links the device to the customer’s account before the device is unlocked.
• The primary reason these attempts have been unsuccessful is because the technology isn’t compatible with vaping products or feasible at a localised level; Mobile device app stores prohibit any vaping related applications which makes it difficult to connect a vaping device to the internet to complete verification and most vaping devices in New Zealand are international brands sold in multiple markets which combined made it a very unreliable, clunky user experience.
• As vaping product retailer, we historically stocked one of these products designed exclusively for New Zealand for a short period of time prior to it being delisted; 1 (one) customer was able to successfully unlock their device unassisted after 1 hour of repeat attempts, the rest had to be assisted remotely over a number of days via email and phone calls with the device manufacturer.
• Most of the devices we sold were subsequently returned and exchanged for an easier to use alternative device.
• Pursuing this path will result in a significant reduction in availability of vaping products and will prevent adult smokers who are not tech savvy or don’t have access to a computer from vaping.

Recommendation:

Now is not the time to require user safety mechanisms to prevent accidental activation. This no evidence provided demonstrating there is a problem requiring fixing, this will have no improvement to user safety and does nothing to reduce the appeal of vaping to youth.

Removable/Replaceable Batteries

The consultation document proposes a requirement that all vaping devices to have a removable battery to enable the battery to be inspected (and therefore prevent risk of battery failure/explosion).

When removable batteries are used properly and as intended by users in vaping devices, there is a very low risk of battery failure and explosion. However, for inexperienced users not educated in battery safety, removable batteries pose a significantly increased (and unnecessary) safety risk.

Based on ACC injury claims, most vaping battery failure incidents relate to improper care and use by inexperienced users dealing with removable batteries.

The vast majority of Specialty Vape Retailers offer comprehensive education on battery safety to customers and ongoing care is required to ensure battery wraps are maintained to prevent battery failure.

Most vaping devices sold in New Zealand contain inbuilt batteries which are securely sealed within. These devices draw significantly less electricity from the battery as compared to devices designed for removable batteries, and the current product safety standards in vaping regulations already require devices to be compliant to New Zealand electrical safety standards.

Substance container labelling

The proposal to clarify that all vaping products must have the prescribed labels on substance containers, including single-use devices, where the container may be the device makes sense and brings single use disposable vaping products in line with other nicotine vaping products.

The clarification should specify what exactly the prescribed labelling means in an effort to remove any ambiguity between the concentration of nicotine S5 Part 1 1(i) regulations and strength of nicotine salts which will ensure consumers have a single reference point they can use to compare between products.

Nicotine concentrations in non-refillable products

The consultation document proposes reducing the maximum concentration of nicotine salts allowed in single-use products from 50mg/mL to 35mg/mL (as people can choose to use a lower concentration of nicotine in re-useable devices, but single-use devices have a fixed nicotine concentration that is generally close to the maximum allowed).

Reducing the concentration of nicotine

• When assessing policy related to maximum nicotine levels, we urge decision makers to take into account the emissions content of nicotine (i.e. the type of device typically used with the vaping substance).
• The problem with ‘reducing maximum nicotine concentrations’ is that current (small, low powered) devices will ultimately be replaced with larger, more powerful devices with coils that can vaporise e-liquid in a way that delivers nicotine to consumers at a comparable (or higher) level.
• While this may appease stakeholders who challenge the maximum nicotine levels specified in current regulations, it is ineffective policy that does not directly reduce the appeal of vaping, or the amount of nicotine consumed by people who vape.
• The Ministry of Health has previously communicated that a 50mg/mL nicotine concentration does not pose any safety risk or concerns to public health.

Ability to choose lower nicotine levels.

Non-refillable nicotine vaping products (including single use disposable vaping products) are already available in multiple levels of nicotine which gives consumers choice and the ability to reduce nicotine intake over time.

Prefilled pods have a fixed nicotine concentration as do e-liquid bottles; There is no reason single use disposable vaping devices should be treated differently.

While we agree that a large proportion of single use disposable vaping devices in New Zealand contain nicotine levels at concentrations close to the maximum allowed, if future regulations permit the sale of single use disposable vaping products, an extended range of lower nicotine concentrations will naturally follow to meet evolving consumer needs.

Delivery of Smokefree 2025

The Minister of Health has stated on a number of occasions that to successfully deliver smokefree 2025, smoked tobacco consumers must have access to vaping products that deliver a comparable level of nicotine to deliver a similar level of satisfaction.

Recommendation:

Now is not the right time to be reducing maximum nicotine levels in vaping products.

There is no clear rationale provided in the consultation paper that demonstrates a public health benefit resulting from reducing the maximum nicotine levels for single use disposable vaping products.

Proposal to restrict where Specialist Vape Retailers can be located

 The consultation document proposes setting out proximity restrictions relating to where a Specialist Vape Retailer (SVR) is located. This would mean that the Director-General would need to give consideration to where a business intends to operate when deciding to give a person approval to be an SVR. For example, the distance from schools and sports grounds or other considerations specific to certain communities.

Research on this topic is limited, however one recently published study (Cole 2019)  exploring the association between density of vape retailer proximity to schools and youth vaping prevalence found that there was no significantly associated evidence linking proximity of vape stores with the likelihood of youth ever or currently using e-cigarettes. 

Our understanding of the rationale behind this proposal is not necessarily that SVR stores located nearby school are selling to youth (which could easily be addressed by enforcement of the SERPA) but rather that their visibility is in part correlated to the appeal of vaping amongst youth.

Proximity to Schools

There are approximately 2500 Schools tactically located around New Zealand in “School Zones” which aim to maximise coverage. Many of New Zealand’s youth commute to school daily, roam their local area and visit shopping centres.

In the process of this normal daily part of life, youth often pass by a number of stores (including vape shops) that sell products intended for adults (not located near schools). Incidental visibility of vape stores to youth is inevitable.

Existing SVR Stores

There are now more than 1000 specialty vape retail premises in New Zealand, with a number of these are already located near schools. While we agree that in some of the more extreme instances it is inappropriate to have a R18 store located directly beside a school’s entrance, however the reality is that due to the tactical location of schools in New Zealand, having some SVR stores located nearby a school is genuinely unavoidable if availability of vaping products to adult consumers is to be retained.

Recommendation:

Prior to making a decision to include proximity restrictions, a review should be carried out to assess what this policy would achieve ( we assume already approved SVR stores would not have their AVP approvals cancelled as a result of this measure).

Any proximity restrictions should be based on the area of most student foot traffic (i.e. entrances) rather than a top down distance from the perimeter of a school or sports arena grounds.

If a decision is taken to set proximity restrictions, there should be a “minimum criteria” to provide prospective SVR stores both guidance and some certainty when negotiating a lease. This ‘minimum criteria’ should be up front, transparent and specific. For this reason, ‘Other considerations specific to certain communities’ should not be part of the approval process.

Smoked Tobacco Amendment Act   

The Smokefree Environments and Regulated Products (Smoked Tobacco) Amendment Act came into force on 1 January 2023 and consists of 3 staged policies. 

1. Reducing the accessibility of smoked tobacco products by way of a license scheme aimed at removing tobacco products from 90% of stores currently stocking vaping products.  
2. Prohibiting the sale of smoked tobacco products to any person born after 1 Janurary 2009, also known as "Smoke Free Generation"
3. Removing over 90% of the nicotine contained in smoked tobacco products to make them less/not addictive, also known as "Very Low Nicotine Cigarettes" (VLNC)

Regulatory proposal 1a: Number of smoked tobacco retail premises and their distribution across Aotearoa

This proposal relates to the specific plans the Ministry of Health will undertake to allocate 600 smoked tobacco retail licenses' to the current 6000 retailers stocking smoked tobacco products in New Zealand.

The Act requires the Director General to issue written notice setting a maximum number of retail premises for all New Zealand or divide New Zealand into different areas and set a maximum number of retail premises for each area.

The proposed plan is to divide New Zealand up into geographical areas differentiating between metro and rural and then allocating a maximum number of licenses' to each zone. 

You can see the draft zoning allocation here. 

 

Our response: 

 As an initial cut, this appears to be a pragmatic allocation of the 600 retail premises with what seems to be the best intentions by the Ministry of Health to implement the regulations. However, whenever top-down, desktop exercises like this are completed, its very rare they are "precisely right", so it is important that the Director General retains the flexibility to tweak allocations when inevitable issues arise.

Setting a maximum number of retail premises for each area adds an additional layer of complexity and runs a risk of not remaining fit for future purposes over time as population changes and (if the amendment act meets its objective) various areas reach smokefree levels faster than others.

Specifying the maximum number of retail premises for New Zealand gives the director general the ability to tweak the distribution of licenced tobacco retailers over time.

Regulatory proposal 1b: Minimum requirements for approval as a smoked tobacco retailer

This section seeks input on the minimum requirements required for a person to be considered for a smoked tobacco retail license. 

The Minimum Requirements in the Act are 

• The applicant is a fit and proper person, and that each responsible person is fit and proper
• The applicant is a New Zealand resident or is carrying on business in New Zealand or incorporated under New Zealand law
• The retail premises are a fixed permanent structure and appropriate premises. 
• Appropriate systems and procedures are in place

The proposed regulations to help determine whether an applicant is a "fit and proper person" are 

• any charge or conviction for any offence under the Act , as well as relevant offences under other statutes, such as in relation to the Customs and Excise Act 2018 or the Crimes Act.
• the outcome of any controlled purchase operations and/or other compliance activities by smokefree enforcement officers, if applicable (ie, history of compliance) 
• any other court order made against the applicant that may be relevant to the application 
• any information collected in the course of a Police investigation that relates to the person’s conduct 
• any matters disclosed to the Ministry of Health by the Police, New Zealand Customs or Te Whatu Ora in relation to the application, including any objection to the grant of a license; for example, the fact that the person is a member of, or has close affiliations with a gang or organised criminal group 
• the person is over the age of 18 
• any further matters the Director-General considers relevant.

Our response:

Further clarity should be provided on the proposed approval process and decision-making criteria for instances where an Approved Tobacco Retailer is sold to another party (or) key management personnel / directors change in a smoked tobacco retailer which deems previous assessment of a “’fit and proper’ person void.

The minimum requirements look to be rational. Given that 6000 small businesses currently participating in a ~ $2.5b industry (~$400k per store in annual sales revenue) are going to be competing for 1 of 600 licenses potentially worth $4m+ in annual sales revenue per store it makes sense that the “winners” have appropriate security and business systems in place.

The only concern we have with the minimum requirement is related to ‘any further matters the Director-General considers relevant’. While this is clearly a ‘catch all’ clause, it is a subjective / discretionary requirement which is better suited for the ranking of applications process rather than as a minimum requirement for stores to apply.

Regulatory proposal 1c: Approval processes and decision-making criteria

This section focuses on the processes taken to rank applicants in the event there are multiple retailers competing for the same license which are demonstrated to be fair and reasonable (under the circumstances). 

Although out of scope to this consultation, we are unclear why cabinet made the decision to sequence the reduction of tobacco retail premises prior to the introduction of "Very Low Nicotine Cigarettes" VLNC. For a typical tobacco retailer to justify the investment and risk required to be at this level would be quite difficult given the intent to introduce VLNC in phase 2 of the Amendment Act which are designed to not be adopted by current smokers. 

What we're most concerned about is what happens to the 90% of retailers who are unsuccessful at getting a license. 

Right now, 5400 small businesses are frantically trying to find a way to hedge the impending $400k average annual sales revenue loss resulting from removal of smoked tobacco products from their store.

A ‘natural’ reaction for many of these retailers will be to meet consumer demand by considering stocking black market tobacco products, or grey market vaping products.

The best support for these retailers is to:

1. Continue regulating vaping products in a risk proportionate way that ensures continued availability of vaping products to these retailers that deliver nicotine to consumers at comparable levels to a combustible tobacco cigarette.
2. Review regulations to reconsider alternative non-tobacco reduced harm nicotine products not currently permitted for sale in New Zealand e.g. nicotine pouches.

Regulatory proposal 2: Low nicotine requirements

This section focuses on the proposed methodology of testing reduced nicotine contents in smoked tobacco products and also communication permissions and packaging requirements for VLNC. 

Our response:

Tobacco importers and notifiers should be permitted to communicate to consumers about very low nicotine cigarettes, both pre implementation and post implementation. In addition, Smoked tobacco products should receive a vaping advertising exemption that permits brands to recommend a specific nicotine vaping product for consumers to transition to.