New tax on nicotine hits hard on weaning programme

Roadside shops are going bankrupt, more smokers and poorer public health. These are the results of the government's new tax on high nicotine content, according to Niklas Linder, chairman of the Swedish Electronic Cigarette Industry Organisation.

It will be more expensive to vejpa from the beginning of the year. In its 2021 budget, the government will tax high nicotine liquids (15-20 mg/ml) by SEK 4000 per litre. This means that the price of a pre-mixed juice, or a nicotine shot, will increase by SEK 50. 

"If retailers are to make it work, we're likely to see prices of around SEK 100 for the smallest bottles of pre-mixed e-juice. Slightly lower for a nicotine shot" says Niklas Linder, President of BELC, the Electronic Cigarette Industry Organisation.

The Ministry was thinking wrong

As Vejpkollen previously reportedThe new tax is based on a proposal from the Ministry of Finance. The previous tax of €2,000 per litre only applied to nicotine at concentrations up to 15 mg/ml. This was not the original intention, as the Ministry wanted to tax all e-liquids up to 20 mg/ml. However, a year after the tax was introduced, it became clear that higher concentrations could not be taxed due to chemical engineering reasons. According to the Swedish Chemicals Agency, nicotine liquids with concentrations higher than 15 mg/ml are not considered a consumer product in Sweden and therefore cannot be taxed. At the same time, this type of e-liquid is fully authorised for sale within the EU, something that Swedish laws must take into account.

Overall, this meant that there was no tax revenue on these liquids.

To compensate for this, the Treasury, in consultation with the Chemicals Agency, now wants to create a new product category: high strength nicotine liquids. These will be taxed at twice the rate of liquids with concentrations below 15 mg/ml. This is how the lost money will be recouped. Something the government is now counting on in its 2021 budget.

Same tax on all nicotine levels

However, some respondents consider the proposal to be inconsistent, particularly as it creates two similar product categories with different excise duties. Several industry organisations, including BELC, therefore propose that nicotine liquid should be taxed according to the same principle - with the current tax of SEK 2,000/l - regardless of nicotine strength. For its part, the lobby organisation Tobaksfakta argues that the tax is too low and should be increased regularly to discourage the use of e-cigarettes.

Former smoker quits smoking

In the end, the government chose to accept the Finnish Ministry's proposal in its entirety. And the consequences are severe, not only for e-cigarette users.

"The fact that fewer smokers are now choosing to switch to e-cigarettes is something the government has to reckon with. With the deterioration of public health that it ultimately means" says Niklas Linder.

According to the Electronic Cigarette Industry Organisation, this is a natural consequence of government policy.

"E-liquid will become more expensive, removing one of the incentives to switch to a healthier alternative." says Niklas Linder.

"Expect bankruptcies"

He also believes that the new tax, with large price increases, will affect many smaller companies. "There are no large profit margins on nicotine today," he says. And consumers have the option of buying nicotine abroad instead.

"This will be very hard for Swedish stores and vejpshoppers. We are likely to see more bankruptcies and closures in 2021/2022" says Niklas Linder.


Government budget bill for 2021 (page 394)

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