First look at the “Monopoly Law.”
Article 2 Tobacco monopoly products mentioned in this Law refer to cigarettes, cigars, cut tobacco, red-cured tobacco leaves, tobacco leaves, cigarette paper, filter rods, tobacco tow, and tobacco-specific machinery. Cigarettes, cigars, cut tobacco and red-cured tobacco are collectively referred to as tobacco products.
Electronic cigarettes are now referred to cigarettes, but it is hard to say which category of cigarette machines belongs to.
In addition, although it is an electronic cigarette, which are tobacco products?
Nicotine in e-liquid?
E-liquid, what about e-liquid that does not contain nicotine?
The pod after filling the e-juice? How about the cigarette machine sold separately from the smoke oil and the cigarette machine? Personally, I feel that control from the nicotine ring is a more likely direction, because this ring is better controlled.
And that’s what the laws of many European countries do.
In fact, as early as 2019, the official statement was made:
Blue Hole New Consumption Report, on October 10th, the official website of the State Tobacco Monopoly Administration stated that the Tobacco Monopoly Administration Office said in a reply to a netizen’s question on the approval of e-cigarette production on September 16 that for some e-cigarettes, after identification Tobacco monopoly products should be inspected and included in the cigarette identification and inspection catalogue by the State Tobacco Monopoly Administration, and the production of such products should hold a tobacco monopoly production enterprise license.
Distinguish what will be included in tobacco, focusing on whether it contains tobacco components.
Article 12 The establishment of a tobacco product manufacturing enterprise must be approved by the tobacco monopoly administrative department of the State Council, obtain a tobacco monopoly production enterprise license, and be approved and registered by the industry and commerce administrative department; its division, merger and cancellation must be approved by the tobacco monopoly administration of the State Council Approved by the competent department, and go through the formalities for modification and cancellation of registration with the administrative department for industry and commerce. Without obtaining a tobacco monopoly production enterprise license, the industry and commerce administrative department shall not approve the registration.
Article 13 Tobacco product manufacturing enterprises conducting basic construction or technological transformation to expand production capacity must be approved by the tobacco monopoly administrative department of the State Council.
Article 14 The annual total production plan of cigarettes and cigars of provinces, autonomous regions and municipalities directly under the Central Government shall be issued by the planning department of the State Council. The annual total production plan of cigarettes and cigars of tobacco product manufacturers shall be issued by the provincial tobacco monopoly administrative department in accordance with the plan issued by the planning department of the State Council and in light of market sales conditions, and local people’s governments shall not issue overproduction tasks to tobacco product manufacturers.
The production of tobacco products requires the production license of the tobacco department, and the approval of the tobacco department must be obtained in addition to the division and removal of the industrial and commercial department.
In addition, the expansion of production or technological transformation must also be approved, and even the annual output has a national plan, not to be prolific if you want to be prolific.
Here comes the question:
Which aspects of e-cigarettes are considered tobacco product manufacturers, and how big is this scope? Nicotine salt manufacturer? Downstream e-liquid companies? The foundry that fills the e-liquid into the pod? Is it realistic to include all the production enterprises?
Article 15 An enterprise engaged in the wholesale business of tobacco products must be approved by the tobacco monopoly administrative department of the State Council or the provincial tobacco monopoly administrative department, obtain a tobacco monopoly wholesale enterprise license, and be approved and registered by the industry and commerce administrative department. Article 16 For enterprises or individuals engaged in the retail business of tobacco products, the administrative department for industry and commerce of the people’s government at the county level shall, upon the entrustment of the competent department of tobacco monopoly administration at the next higher level, examine and approve the issuance of a tobacco monopoly retail license. Where a county-level tobacco monopoly administrative department has been established, the county-level tobacco monopoly administrative department may also issue a tobacco monopoly retail license upon examination and approval. Article 21 Consignment or self-transportation of tobacco monopoly products must hold a permit issued by the tobacco monopoly administrative department or an organization authorized by the tobacco monopoly administrative department; without a permit, the carrier shall not carry it.
Wholesale, retail, shipping all require separate approvals.
The license for retail is at the county level, one license per county, and local licenses are required for each expansion of a county – this is definitely an obstacle for electronic brands to lay out offline channels now.
However, from various sources of information, it is relatively difficult to obtain retail licenses, and the barriers to entry are relatively loose.
Article 24 Enterprises producing cigarette paper, filter rods, cigarette tow, and tobacco-specific machinery must report to the tobacco monopoly administrative department of the State Council for approval and obtain a tobacco monopoly production enterprise license. The term “tobacco special machinery” as mentioned in this Law refers to the complete machine of special tobacco machinery. Article 25 Enterprises producing cigarette paper, filter rods, tobacco tow, and tobacco-specific machinery shall organize production in accordance with the plans of the tobacco monopoly administrative department under the State Council and the order contracts signed with tobacco product manufacturers. The tobacco-specific machinery here does not say what it is, but the hood is suspected of tobacco-specific machinery. The production of this also requires approval, and the output is still limited, not just the one you want.
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