French Court Deals Potential Blow To E-Cigarettes

e-cigarettesE-cigarette outlets could be forced to close if the ruling stands.

A French court ruled Monday that tobacconists should have the exclusive right to sell electronic cigarettes and are subject to the same ban on advertising as tobacco products—a decision that disrupts the burgeoning e-cigarette industry and could set a precedent for other countries to follow.  

The ruling, which shocked many—especially the roughly 300 shops selling e-cigarettes in France—has the potential to influence efforts to regulate the sale of e-cigarettes across Europe, which continues to question whether e-cigs should be treated as tobacco products, the Wall Street Journal reported.

Tobacconists hold a monopoly in France in selling traditional cigarettes, which means the ruling could pose a setback for France’s rapidly expanding e-cigarette outlets, which would be forced to close if the ruling stands.

The decision also comes at a time when e-cigarette popularity in Europe is picking up steam. Euromonitor International analyst Shane MacGuill expects global sales for e-cigarettes to reach about $3.5 billion this year, with around $700 to $800 million in Western Europe.

In France alone, the market for e-cigarettes is expected to more than double this year to around €100 million ($137 million) from €40 million last year, according to a recent study from the French office for the prevention of smoking, as reported by the Wall Street Journal.

Attention now turns to the efforts from European legislators working to find a regulatory framework for e-cigarettes.  EU health ministers this summer said that liquids for e-cigarettes that contain at least 2 milligrams of nicotine per milliliter should be regulated as medicines, which would limit the sales of these products to pharmacies in many countries, including France. The European Parliament, however, said that e-cigarettes and e-liquids should be regulated just like regular cigarettes, according to the Wall Street Journal. Negotiators from both the Parliament and EU member states have said they want to reach a compromise on the new regulation before the end of the year.

“The court went beyond its powers deciding on a matter that is not yet subject to a law,” Mickaël Hammoudi, who heads a French e-cigarette lobby group told the Wall Street Journal. “This puts 2,500 jobs at risk.”

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