Synthetic nicotine: British American Tobacco exploits a legislative loophole in South Korea

British American Tobacco (BAT) has launched a new synthetic nicotine e-cigarette product, the Nomad Sync 5000, in South Korea, marking a world first for the tobacco giant. With attractive flavours and a competitive price, the product aims to capture a growing share of the e-cigarette market in the country.

However, the launch has drawn strong criticism, particularly because the manufacturer is circumventing existing legislation by exploiting a regulatory loophole that allows it to avoid taxes applied to products containing natural nicotine.

A legislative loophole exploited

In South Korea, products containing synthetic nicotine are not classified as tobacco products, as current legislation defines them only as substances derived from tobacco leaves. This distinction allows BAT to market its e-cigarettes without the high taxes (about 1,800 won per milliliter for natural nicotine products) and legal requirements such as advertising restrictions or the posting of health warnings.

The tax exemption represents a significant loss of revenue for the South Korean state. According to estimates, nearly 3.38 billion won (about 2.37 million euros) in potential tax revenue has been lost over the past four years due to the loophole.[1].

Growing criticism

Public health experts point out that synthetic nicotine poses the same health risks as natural nicotine and that its addictive power is even reinforced, making its exclusion from the regulatory framework inconsistent. They also warn of the potentially dangerous chemicals generated during the manufacture of synthetic nicotine.

In response to these concerns, the South Korean Health Ministry is considering legislative reforms. The main goal is to classify nicotine, regardless of its origin, as a regulated substance like tobacco, in order to impose taxes, restrictions on sales to minors and labeling requirements.[2].

A growing market

For health players, there is urgency, the South Korean market for e-cigarettes based on synthetic nicotine is experiencing strong growth. In 2022, these products represented 92.2 % of e-cigarettes sold, compared to 76 % in 2020. This popularity is explained by growing demand and lower costs compared to products based on natural nicotine.

The launch of the Nomad Sync 5000 is increasing pressure for a review of the country's current laws. By aligning the regulations for synthetic nicotine products with those for natural nicotine products, the authorities hope to better protect consumers and ensure tax fairness. Debates in the National Assembly are intensifying, reflecting a growing desire to regulate this booming sector.

©Generation Without Tobacco

RK

[1] https://www.chosun.com/english/industry-en/2024/11/26/7PLSW43CK5GN7BKWOA34KKCPGI/ (accessed 11/26/2024)

[2] https://m.theinvestor.co.kr/view.php?ud=20241126050001 (accessed 11/26/2024)

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