Is Britain’s disposable vape market beyond saving?

A war is breaking out around disposable vapes. The prime minister has already waged his assault on the sector, as he voiced fears his daughters could be “seduced by these things”. The government is now considering bans to curb youth use and their environmental harm. Such a move would likely have public support: a Smoore commissioned survey this month found 62% of Brits believe vaping is just as, or more harmful than smoking.

But just when a united front is needed, manufacturers are in-fighting. In the one camp are Chinese mega-brands like ElfBar, Lost Mary and SKE Crystal, who rivals say have flagrantly violated regulations to achieve best-seller status.

In the other are compliant companies who feel abandoned by regulators and are now hopelessly desperate for proper enforcement. Fighting their corner is an unlikely ally: Big Tobacco, now slinging grenades as it sets out to shake up the sector.

“We’re not all the same, but we’re all being tarred with the same brush,” says Harris Tanvir, co-founder of Vyko disposable vapes and UK Ecig Store. “It’s steering towards a ban on disposables, and that would be a real, real shame.”

The battle lines were drawn in February, when testing commissioned by the Daily Mail revealed several ElfBar products bought at supermarkets contained 50% more eliquid than the legal limit. For some, it came as little surprise. “ElfBar aren’t the only one out there that’s overfilling, I can guarantee that,” UK Vaping Industry Association director general John Dunne told The Grocer at the time. “It’s not rocket science. This stuff’s been going on for a long, long time.”

The incident exposed shortcomings in the UK’s attempt to regulate this nascent market. ElfBar issued a statement after meeting with regulators and trade bodies, claiming its own investigation had found over-filled nicotine juice tanks meant for other countries had been “inadvertently” fitted to certain products in the UK. Those in the room – the Medicines and Healthcare Products Regulatory Agency (MHRA) which regulates the category; Trading Standards, which is responsible for enforcement; and vape trade bodies the UKVIA and IBVTA – appeared to have taken ElfBar at its word. A handful of affected batch numbers were shared with wholesalers and retailers, and with the regulator’s blessing, a voluntary withdrawal commenced.

But many remain doubtful of ElfBar’s reasoning. “The excuses are pretty laughable. They’re not plausible. It doesn’t make sense,” says Tanvir.

In fact, it is understood the regulator – the MHRA, which can’t reveal any details as it could “seriously undermine any investigations” it told The Grocer – had suspected ElfBar devices had been overfilled for around a year. It is also understood the MHRA wrote to the brand twice but received no response.

So rivals are understandably pushing for ElfBar to face more serious action. “We follow every single rule,” says  Tanvir, “and looking at this, it’s a pisstake. They’ve got away with murder.”

“It’s a pisstake. They’ve got away with murder.”

There’s a reason why the company “got away” with a voluntary withdrawal. The MHRA has powers to recall products but rarely goes down this route unless there is an immediate health risk. Trading Standards can seize illegal products, but due to the low level of risk, it was content with the voluntary withdrawal.

“It was illegal but there weren’t any safety concerns attached to it. A recall would have been an utter nightmare for [ElfBar],” explains Kate Pike, lead officer for vaping at the Chartered Trading Standards Institute. “We didn’t feel [a recall] was proportionate to the issue. It wasn’t about sympathy for ElfBar.”

For Trading Standards, there was insufficient proof the issue went beyond just a few batches – despite strong suspicions from rivals to the contrary. The problem is, they couldn’t afford the lab tests – around £200 per device – to prove it. 

Enter British American Tobacco, not just one of the largest tobacco companies in the world, but a keen participant in the disposable vaping market since the launch of Vuse Go. Unconcerned with ruffling feathers in the sector, earlier this year BAT commissioned tests of 71 batches of ElfBar and its sister brand Lost Mary. It claimed to find evidence of “consistent and widespread overfilling” which “cast significant doubts on the reliability” of ElfBar’s claim it was a mere accident.

BAT notified every regulator and local Trading Standards body it could find. ElfBar – which engaged and then dropped a specialist crisis communications agency earlier in the year – did not respond to the findings. Further BAT testing, shared with supermarkets, wholesalers and The Grocer,  found a slew of other disposable brands including SKE Crystal, Smok Mbar, and IVG had also been overfilled. Booker later issued a recall for its range of Elux, SKE Crystal and IVG disposable vapes due to a “manufacturing quality issue”. The brands did not respond to requests for comment.

The situation is such that key disposable distributor Phoenix 2 Retail – which is understood to supply Tesco, Morrisons, Sainsburys, Booker, One Stop and Spar – has launched its own “pre and post-market testing program” on the products it sells to reassure nervy retailers.

“Half of the market choose to stay within the compliance and the rest of the market makes that conscious decision to make a non-compliant device,” says Paul Wilkinson, UK director of Hyppe Bar.

“If you knew you could go and rob a jewellery store today, and have absolutely zero comeback, then why not go rob the jewellery store? That’s the crux of the matter”

Paul Wilkinson, Hyppe Bar UK director

BAT’s testing – though conducted by an independent laboratory – has been viewed with scepticism. While Trading Standards will consider any intelligence it receives, “we will consider the source” says Pike. “Obviously [BAT] has a vested interest in ensuring children are not vaping, because if children are vaping, they may not be smoking.”

BAT says it just wants a level playing field. ”Government must also look at enhancing pre-market requirements to give MHRA increased powers to actually test products before they are put on shelves – preventing manufacturers from misleading consumers with vapes which do not comply with UK law,” a spokesman told The Grocer. ”Such requirements should be coupled with an obligation on manufacturers to provide a conformity assessment via a recognised laboratory before products are imported to stop non-compliant and illicit vapes from ever entering the UK.”

“Only by introducing these targeted and effective measures can the government demonstrate that it is treating the widespread availability of non-compliant and illicit vapes in the UK with the seriousness it deserves,” the spokesman added.

The response to BAT’s test results have left many manufacturers feeling helpless. In light of the mounting evidence, they expected regulators to  step in and make an example of the rule-flouting brands. Or perhaps strengthen the approval for sale process, which as it stands involves no post-market testing and “simply doesn’t work”, says Dunne.

To date, they haven’t done either. “If you knew you could go and rob a jewellery store today, and have absolutely zero comeback, then why not go rob the jewellery store?” asks Wilkinson. “That’s the crux of the matter.”

Tanvir agrees. “What’s been proven is you can do whatever you like and there will be little consequence. Apart from a few news articles, nothing’s going to happen to you. They’re all back on shelves. Why have these guys been allowed to abuse the law?”

Even Trading Standards has sympathy. “It’s just taking the mickey isn’t it? Taking the mickey out of our regulations, not only our acceptance but encouragement of vape products, because we want the public health benefits of helping smokers quit,” says Pike. “It’s really not acceptable.”

While the body is ultimately responsible for enforcement, it is locally funded and under-resourced. Pike says that “there’s got to be some trust hasn’t there?” – but wants funding for “test purchasing of regular products on an ad hoc, random basis to check the vigilance, check the checkers”.

“I feel sorry for the legitimate companies, I really do. I feel really sorry for them because they’re being undermined,” Pike adds.

Unfair advantages

Some might consider the protests of compliant brands to be jealous whinging. But the advantages of selling overfilled devices over compliant ones are significant. There are around 250 disposable brands in the UK market, each claiming to offer around 600 puffs per device.

“That means you have to look at the minute details to win on customer experience,” Wilkinson says, “be that finding a certain flavour or a slightly different shape or form consumers find more attractive.”

When it comes to the desired levels of nicotine juice, “the overfilling wins”, he says. “Consumers are paying £5 for a device that’s lasting two-and-a-half days versus paying £5 for a device that’s lasting one day. And that’s where we’ve always fallen short because they have more liquid in their device than ours.”

When the overfilled ElfBar batches were first exposed in February, it only solidified its status as the market leader. “[It was] a huge free advert. Sales spiked,” says Wilkinson. “You’ve literally just told the customer they’re getting nearly twice as much for their money than any other brand. Buy one get one free almost. Great.

“I feel sorry for the legitimate companies. I really do”

Kate Pike, lead officer for vaping, Chartered Trading Standards Institute

Industry experts understand most batches of vapes sold in supermarkets are now fully compliant when it comes to their nicotine liquid levels. But rivals now have a bigger fear: if firms know they can breach one regulation, they may feel comfortable breaching others.

“If you’re starting your day with ‘we’re making a product that’s going to be illegal’ – are you saying ‘yes, but we still need to use ethical supply chains, we have to make sure there’s no banned chemicals in this product’ and so on? You might as well be hanged for a sheep as for a lamb,” says Wilkinson.

“Inherently these people are out there to make as much margin as possible,” adds Tanvir. “And consumers should look at this as a red light. If they don’t care about following rules, what’s in the liquid?”

Youth use

The government’s priority, however, is underage vaping. In a speech in April, health minister Neil O’Brien gave a clear ultimatum. “My message is this: if your business plan relies on getting kids hooked on nicotine, we are coming for you.”

But with regards to non-compliant, regulated devices he could only “urge” the sector to follow Tesco’s example in pulling disposables like ElfBar.

If brands don’t comply, “it could result in an unlimited fine. Companies failing to comply will be held to account,” he added. So far, however, none have been.

And a £3m promised cash injection from the government for an ‘illicit vapes enforcement squad’ will focus on the black market and underage sales, rather than non-compliant lines. “In every market there’s a black market. That’s never going to stop,” says Tanvir. “If you were to put fines and bans for non-compliance, that really would hurt. They have to feel the consequences.”

The ElfBar incident has at least offered one glimmer of hope to the manufacturers following the rules. Retailers and wholesalers do now at least ask to see proof of compliance, they say. Even if only in preparation for being asked themselves.

@barcare We are being sold lies! #lostmarys #dublin #ridiculous #evidence #comedy #barcare ♬ original sound – Barra

And in the wake of the scandal, some operators are making a selling point of their legitimacy. Like Geekbar owner Geekvape, which announced the launch of a £120m facility that automates 90% of production earlier this year. Geekbar is 2022’s third biggest selling vape brand, according to NIQ, and its vice-president Gavin Zhang says the new site will further assure customers of the brand’s compliance.

“[Overfilling] was common knowledge,” says  Zhang. “People said you cannot compete… But we said from the beginning we should follow the rules.”

Zhang is hopeful regulators will toughen up. “Otherwise, always, the good money is driven out by the bad money. Why [should we] not be illegal? We know you can make some quick cash then change your name. But that’s not our values.”

But the temptation to defect grows stronger. Tanvir is encouraged that a fully compliant device – the Vyko Paper Bar – can sell well. It is the third best-selling disposable across most of the stores where it is  stocked. But the biggest sellers are ElfBar and Lost Mary. “It’s frustrating – you sometimes think ‘why am I being compliant when nobody else is’?” says Tanvir.

“It’s a huge temptation – why don’t we just do it?” adds Wilkinson. “But if we all just say ‘screw it let’s all make non-compliant devices’, then there is no future for the industry.”