New tax on e-liquid with nicotine - this is how expensive e-juice will be

The new tax on highly concentrated e-liquid will be SEK 4 per millilitre. This is clear after the Swedish Parliament voted through the framework for the government's budget for 2021. This means that a bottle of e-juice, flavoured or unflavoured, will cost SEK 50 more from the beginning of the year.

Such as the Road Column previously reported the government wants to introduce a new excise tax on e-liquid. And after a low-key debate in Parliament, it is now clear that the price of e-liquid will go up from 1 January 2021. High-level nicotine liquids, 15 mg/ml and above, will be taxed at 4 kr/ml. Liquids below 15 mg/ml will, as before, be taxed at 2 SEK/ml.

"Should not really be sold"

Highly concentrated nicotine liquids have been a concern for the Ministry of Finance since e-liquids became regulated under the European Tobacco Directive in Sweden. According to Swedish law, nicotine liquids with a nicotine content above 15 mg/ml should not be available to ordinary consumers. However, since highly concentrated nicotine liquids are allowed under the EU Tobacco Directive, they can still be on the market. As a result, these liquids could not be stopped from being sold. But they could not be taxed either.

"E-liquids containing nicotine at levels above 15 milligrams per millilitre of liquid are acutely toxic. When the law was introduced, many of these liquids were exempted from taxation as they could not be legally sold to consumers. However, the Chemicals Inspectorate has subsequently reassessed the application of the law and now considers that the rules that prevent sales in certain cases do not apply" says the Ministry of Finance via the press spokesperson Johan Ekström to Vejpkollen.

Want to steer users towards lower nicotine

With the new law, the Ministry of Finance wants to encourage consumers to buy e-liquid with lower nicotine levels.

"As we can no longer exclude that consumers can legally purchase the products, we propose taxation. In order not to steer consumers towards buying them for mixing into other e-liquids, we propose a higher tax than for other nicotine liquids", says Mr Perez. Ministry of Finance.

KD: "Not a health product"?

The new tax will come into effect on 1 January 2021. The Social Democrats' proposal was supported by the Centre Party, the Liberals and the Green Party and did not attract much debate, even among the opposition in Parliament.

"Taxes are sometimes effective but must be used sensibly. But also cannot consider that nicotine is a health product" says Michael Anefur (KD), member of the Social Affairs Committee, to Vejpkollen.

SD: "Focus on healthier measures"

The Sweden Democrats, who have previously spoken out in favour of e-cigarettes in Parliament, had no objections to the new law.

"However, we want to focus on other, healthier measures that we believe can have more effective health impacts," says Mr Perez. Christina Östberg (SD) to Vejpkollen.

3000 SEK more expensive per year

For a user who needs high nicotine content (over 15 mg/ml) in their e-liquid, the tax will mean higher costs. According to the Ministry of Finance's own calculations, it is about SEK 3,000 more per year.
But according to many observers this is an understatement. This is a tripling of the price. And the concern that e-cigarettes are losing ground in relation to analogue cigarettes is high among retailers, especially those who only deal in deals with weather products. But it is a risk that the Treasury wants to play down.

"We lack sufficient data to assess any distributional effects of the proposal. However, according to our assessments, it is still cheaper than smoking."" writes the Ministry.

V: "Think smokers will choose e-cigarettes anyway"

The Left Party, which also supports the government's proposal, says that taxes on road products have not been a priority for the party. But Karin Rågsjö (V), member of the Social Affairs Committee, shares the Ministry of Finance's assessment. According to her, the higher price should not deter smokers from considering e-cigarettes as an alternative to cigarettes.

"We believe that smokers will choose e-cigarettes anyway, as they are more pleasant and probably better than cigarettes. Even if we don't really know the health effects" says Karin Rågsjö to Vejpkollen.

High nicotine content important, according to studies

Currently, road users use highly concentrated nicotine liquids in two different ways. Pre-mixed e-juice with high nicotine content (18 mg/ml) is intended for smaller and simpler electronic cigarettes. According to studies, this is the most commonly used the entry-level product for smokers switching to e-cigarettes to quit smoking. 

However, highly concentrated nicotine liquid can also be purchased in the form of a so-called nicotine shot. This variant is intended to be diluted to lower concentrations in a larger amount of flavoured e-juice. This combination is common among road users who use more powerful appliances. Again, studies show that reducing the risk of relapse, using higher power and less nicotine. A final nicotine content of 3, 6 or 12 mg/ml has become standard in Europe and Sweden.

Today, an untaxed nicotine shot (20mg/ml) costs on average SEK 20. With the new tax, the basic price will increase by almost SEK 50 (excise duty including VAT) and probably end up at around SEK 70 in shops. 

Less nicotine - still more expensive

But a lot can happen along the way.
In order to avoid a sharp increase in the price of the final product (a nicotine shot plus a flavoured shortfill), companies are likely to switch to nicotine shots that have the same flavour as the shortfill.higher concentration of nicotine. At least that's what they say The trade organisation for electronic cigarettes, in its consultation response to the proposal.

Even if this happens, e-liquid will be more expensive for users, at least compared to today. Less concentrated e-liquid is already taxed at SEK 2000 per litre. It will certainly be cheaper than the highly concentrated liquid, but more expensive than the alternatives today. Even though they are rare on the market, a 15 mg/ml nicotine shot currently costs around SEK 40, including tax.

E-cigarettes better for public health

The government expects to receive annually SEK 79 million through the new tax on nicotine liquids. But despite the government forcing up prices, the Ministry of Finance still considers e-cigarettes to be preferable from a public health perspective.

"Public health is affected by the type of tobacco consumed. Since e-cigarettes are cheaper than all tobacco products even with the proposed excise duty, consumption should not significantly shift to tobacco. The health effect of the proposed excise duty should therefore mainly be due to reduced consumption of e-cigarettes and a positive health effect is thus expected." writes the Ministry of Finance in its memorandum to the proposal.

Facts: Nicotine and e-juice:

  • Nicotine-containing e-liquid can only be sold in packs of 10 ml (according to EU directives).
  • The maximum limit for nicotine in an e-liquid is 20 mg/ml (according to EU directives).
  • Sweden will be the only country in Europe to differentiate between different concentrations of nicotine, in terms of product groups and taxation. Under Swedish law, liquids with a concentration higher than 17 mg/ml can be sold as consumer goods. However, this is allowed in the EU under the EU Tobacco Directive. This trumps the Swedish ban, while Swedish legislation has made taxation impossible, until now.

How much e-liquid will cost in 2021

Flavoured e-juice with nicotine, including nicotine salt: 
  • 10 ml with 15-20 mg/ml = +50 crowns per bottle (tax 4 kr/ml + VAT). Standard prices vary between 30 SEK and 70 SEK today.
  • 10 ml with 1-15 mg/ml = same as before (tax 2 kr/ml). Prices vary between £60 and £100 today.
  • Normal consumption is between 10 and 20 ml of fluid per week.
Unflavoured nicotine liquids (so-called nicotine shots)
  • 10 ml 15-20 mg/ml = + 50 against the current standard price of 20 kr.
  • 10 ml 1-15 mg/ml = tax 2 kr/ml. Rare on the market, no standard price. 
  • Nicotine caps are intended as part of a so-called shortfill. 10 to 20 ml of nicotine liquid can be added to a larger amount of e-juice to give a final nicotine content of 3, 6 or 12 mg/ml.

You can read the full Ministry of Finance proposal here!

Previous articles on the subject:
New nicotine tax could triple the price

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