Division Supply Chain Services at Fraunhofer IISE-cigarettes are gaining in importance across Europe - and with them the irregular trade. A lack of data has so far made it difficult to make a well-founded assessment of its actual dimensions and dynamics. This study provides the first comprehensive quantification of the irregular e-cigarette market in Europe and analyzes its structures and supply chains.
A data-based model enables the delineation of legal, gray and black market segments. The results thus create a scientifically sound basis for regulatory and political strategies.
Contribution and methodology of the study
This study provides the first comprehensive quantification of the irregular e-cigarette market in Europe and sheds light on its structures and supply chains. The central contribution is the systematic segmentation of the market into a legal ("white"), a gray (private personal consumption of non-compliant products) and a black sector (commercial illegal trade). This is based on a quantitative model that compares the estimated total demand for vaping products in each EU country with the officially recorded trade statistics (import/export data). The difference that cannot be explained statistically is identified as an irregular market and then further divided into gray and black market shares based on country-specific factors. This methodical approach enables a well-founded, data-based assessment of the status quo and an assessment of future challenges.
Background to the study:
E-cigarettes and the liquids vaporized in them represent a significant and dynamically growing part of the European market for nicotine products. Due to the still young market segment and the different regulatory approaches within the EU, a relevant proportion of these products are not distributed via official channels. On the one hand, this applies to some stationary retailers who do not adhere to the applicable legal provisions and sometimes offer products that are not marketable. On the other hand, illegal products are often offered via specialized sales platforms that neither take tobacco tax into account nor adhere to the minimum age stipulated by youth protection laws.
Against this background, the Risk and Location Analysis department at Fraunhofer IIS, in cooperation with MRU GmbH, was commissioned to take a closer look at the international supply chains of vaping products. On this basis, both the scope of the unofficial business and its implications for the transport service providers often unknowingly involved as well as possible starting points for targeted regulatory measures are to be identified.
An important aim of the analysis was therefore to provide a well-founded assessment of the current state of the irregular market for vaping products based on practical and scientific findings.
