The tobacco industry in China, which is home to more than 300 million cigarette smokers, is controlled by the largest tobacco company in the world – the China National Tobacco Corporation (CNTC).
The CNTC’s dominant global market share is almost entirely the result of its monopoly of the domestic Chinese tobacco industry. When fulfilling its regulatory role, CNTC is also referred to as the State Tobacco Monopoly Administration (STMA), which is a government-granted monopoly established by China’s Tobacco Monopoly Law.
Under the Tobacco Monopoly Law, STMA maintains control over virtually all stages of the production, sales, import, export, and distribution of tobacco products in China. The Tobacco Monopoly Law (Article 2) historically extended STMA’s monopoly control to the following traditional tobacco and tobacco-related products: cigarettes, cigars, cut tobacco, redried leaf tobacco, leaf tobacco, cigarette paper, filter rods, filter tows, and equipment exclusively for use in the manufacture of tobacco products.
Finally, after years of speculation, on November 26, 2021, China’s State Council published online its final decision to amend the Implementing Regulation of the Tobacco Monopoly Law, which makes e-cigarettes subject to the same monopoly requirements as traditional, combustible cigarettes. The STMA and China’s Ministry of Industry and Information Technology (MIIT) first proposed the amendment in March 2021, highlighting their belief that “e-cigarettes and traditional cigarettes are homogeneous in terms of core ingredients, product functions, and consumption methods.”
Specifically, a new Article 65 is added to the Implementing Regulation as follows: “(The management of) Novel tobacco products such as e-cigarettes are implemented with reference to the relevant requirements for cigarettes in this Regulation.” This new article essentially puts all “novel” tobacco products, including e-cigarettes, under the same monopoly as cigarettes with respect to the manufacture, sales, import and export, etc. However, this single-sentence amendment does not provide any details as to how exactly the existing monopoly system on cigarettes in China will apply to e-cigarettes.
In furtherance of the amended Implementing Regulation, on December 2, 2021, the STMA published on its website the draft Management Rules for E-cigarettes for public comment.
Azim Chowdhury – National Law Review – 2021-11-27.
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