Italy E-Cig Laws and Regulatory Environment

April 12, 2016

Italy’s Ever-Changing E-cig Taxes Confuse Vapers Worldwide

To say the last few years of Italy e-cig laws and regulations has been chaotic is an understatement. Any vaper or distributor trying to understand the many ongoing court dramas regarding e-cig laws in Italy probably has more questions than answers, which has created a major problem for the industry. Constant changes in laws have scared away vape shop owners, stunted innovation and left consumers with no alternative to deadly tobacco cigarettes.

As in places like France and the Netherlands, import, possession and sale of tobacco alternatives is perfectly legal in Italy; however, the country is a rarity in that the Italian Institute of Health has officially endorsed one brand, Categoria, based on extensive testing that suggests the devices are substantially safer than tobacco cigarettes. While the Institute of Health has acknowledged the potential benefits of smokers switching to e-cigs since 2010, Italy e-cig laws have been enacted to make up for the lost tobacco tax revenues resulting from more Italians ditching traditional cigarettes for e-cigs.

According to a literature review published in the Lancet Academic Journal, Italy’s laws regarding e-cig use in public spaces changed three times in a six-month period during 2013. Public vaping was outright banned by decree in June, but a law passed in September explicitly allowed e-cig use indoors and outdoors. By the end of the year, the Italian Parliament yet again made vaping in public illegal and decided that e-liquids and vaping hardware should be taxed at the same rate as tobacco products. It should be noted that scientific evidence of e-cig safety did not change during this time; it’s all smoke and mirrors to protect tax revenues and big tobacco.

That same year, the Italian Ministry of Economy announced a 500 million euro drop in tobacco tax revenues, which it attributed to 15 percent of the smoking population switching to e-cigs. The rationale for the public ban was that emissions from e-cigs are dangerous to bystanders, but there is actually scientific evidence to the contrary. The ability to safely use e-cigs anywhere is part of their appeal over cigarettes, so eliminating that perk keeps would-be vapers smoking, and tobacco tax revenues flowing in. Parliament’s motives became transparent when they announced the new tax on e-cigs.

In January of 2014, the 58.5 percent tax took affect, but the damage had long been done: Italy’s National Association for Electronic Smoking reported a 99 percent decline in business permit applications in mid 2013. Around the same time, Ovale, one of the largest e-cig distributors on the planet, announced a 50 percent plummet in annual sales. The Association estimates that thousands of vape shops closed in 2013. However, by April of 2014, an administrative court in the region of Lazio had suspended enforcement of the tax on the grounds that it was “unreasonable.” Vapers got a brief breath of relief.

In May of 2015, the Italian Constitutional Court upheld the Lazio court decision and declared that the government’s excessive taxation of e-cigarette sales was unconstitutional. The court argued that such a high tax rate is reasonable on tobacco because of the substantial evidence that traditional cigarettes are, “seriously toxic for health,” but the same cannot be said for e-cig products. This ruling was a huge victory for vapers, distributors and the public image of e-cigs, but the battle is far from over.

New legislation has since set the tax on e-cigs at half the rate of tobacco products. Distributors, vapers and scientists would all agree that such a tax is still unreasonable, but further controversy complicates matters even more. The so-called tax “discount” applied to e-cigs also applies to Marlboro HeatSticks, a new product made by Philip Morris International (PMI). HeatSticks use the same non-combustion principal as e-cigs, but heat tobacco rather e-liquid, so they look like e-cigs but still contain the deadly plant. However, unlike e-cigs such as those made by Categoria, the Marlboro products have not undergone any testing for safety. Executives from PMI promise research in late 2015.

Why would parliament declare that a product is safe before seeing the research? PMI products account for more than half of Italy’s 12 billion euro tobacco tax revenues. The company has also just invested in a 500 million euro factory in Bologna and happens to own the second largest lobbying group in the world. It doesn’t take a law degree to see the inconsistencies in the government’s treatment of e-cig makers and traditional tobacco companies.

Smokers in Italy are the real victims of this situation. When the Institute of Health first endorsed Categoria, many Italians quit buying traditional cigarettes and instead took up vaping. Since the parliament started introducing unreasonable regulations, the opposite has occurred. Italian courts have consistently sided with e-cig makers, but the government will likely continue to fight them tooth and nail to protect it’s tobacco tax.