Australia’s e cigarette industry faces a $1bn hit as new regulations come into force

Australia’s cigarette industry has warned that its products are not worth the cost, as the new laws come into effect.

Key points:Existing e cigarette and tobacco retailers will now be forced to sell directly to retailers or buy from wholesale online, rather than through wholesalers or other retail outlets.

Key point:E-cigarettes, which contain nicotine, are currently exempt from Australia’s tobacco laws and can be sold from tobacco outlets.

“The tobacco industry has a history of being aggressive and controlling its own products,” the Australian e-cigarette association said.

“It has a very, very strong grip on the tobacco market.”

Key pointsThe e-cigarettes industry, which has grown by more than 40 per cent since 2014, has warned retailers are vulnerable to the new regulationsE-cigarette retailers can now sell directly from wholesale to retail outletsThe new regulations will come into full effect from August 1The Australian e cigarette association said the Australian Government’s new tobacco regulation “would put the interests of the tobacco industry at risk”.

“The new tobacco rules would result in significant costs to the industry, particularly as the wholesale tobacco market has been largely controlled by the tobacco companies,” it said.”[But] the regulations also put the health and wellbeing of the public at risk by imposing mandatory advertising requirements on wholesale e-liquid retailers, which may put some retailers out of business.”

A spokeswoman for the Department of Health said the department would not comment on individual cases.

The new rules are expected to increase the cost of tobacco products for Australian consumers, particularly smokers who can already find alternatives.

“In response to the recent announcement by the Australian Tobacco Commission (ATC) that tobacco products would be required to include an advertisement warning on the front of the package, tobacco retailers are already faced with an increased cost to comply with the new tobacco advertising requirements,” the group said.

It said the restrictions would also be difficult to enforce and “could result in tobacco products being excluded from sale in some areas”.

“This may result in reduced sales of tobacco to Australians,” the statement said.

“If retailers are unable to sell tobacco products in certain regions, such as NSW, Queensland and Victoria, the restrictions will be enforced.”

Australian e-cigarette retailers face increased costsThe new restrictions will also impose a 30 per cent increase on the cost to sell e-liquids to wholesale, with wholesale prices expected to rise by between $10 and $20 a pack.

E-cig retailers who want to sell their products from a wholesale site will need to pay a fee of up to $10,000 a year.

The tobacco companies’ lobbying group, the Australian Industry Group, has said retailers are “not likely to be able to afford the cost”.

“Many retailers are in debt and will need further assistance to survive,” the association said in a statement.

“Wholesale tobacco products have traditionally been sold directly to retail customers.”

“While the government’s decision to mandate an advertising notice on tobacco packaging will help, this is unlikely to be sufficient to cover the significant additional costs and will also increase the prices of tobacco and e-products.”

Australia’s tobacco industry is estimated to be worth $US1.3 billion ($1.9 billion) annually.

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