Government regulation of e-cigarettes will harm competition, increase prices and damage public health. New research released today by the Institute of Economic Affairs finds that excessive regulation of alternative nicotine products will actually do more harm than good.

This new study, Free Market Solutions in Health: The case of nicotine, finds that safer nicotine products are not a gateway to smoking, but a gateway from smoking. Evidence suggests that alternative nicotine products have little appeal to non-smokers, and have a marked impact on helping smokers to quit. Banning e-cigarettes will mean more people continue smoking cigarettes, a vastly unhealthier product.

Smokers should not be discouraged from switching to far less hazardous forms of nicotine. Harm reduction is a better strategy than prohibition.

The legalisation of alternative nicotine products is good for public health.

Evidence from Sweden shows that alternative products have a dramatic effect on the rates of smoking and smoking-related diseases. Over the last four decades the proliferation of alternative nicotine led to the lowest smoking rate in Europe by the end of the century.

Government regulation is regressive.

Heavy regulation of e-cigarettes incentivises the consumption of normal cigarettes and hampers the creation of healthier products. Regulation is not succeeding. Countries that employ extensive regulations on cigarettes such as warning labels, high taxes, and smoking bans do not have lower smoking rates than countries which do not use these tactics.

Smoking regulation harms competition.

The banning and regulation of e-cigarettes is a boon for both the tobacco and pharmaceutical industries as it eliminates competition from alternative products.

Consumers would benefit from the introduction of new products.

By supporting the current market and eliminating the opportunity for alternative nicotine products, government regulation of e-cigarettes will artificially inflate prices. With an increase in competition through the introduction of new products, prices would fall.

Recommendations:

• The government should treat e-cigarettes as an ordinary consumer product. This would allow consumer interests to be advanced through accurate information and free choice.


• The removal of harmful barriers to the alternative nicotine product market such as high taxes, bans and excessive warning labels will allow the industry to become more competitive, help to foster safer products, and lower prices for the consumer.

Commenting on the report, its author, Christopher Snowdon, said:

“E-cigarettes have the potential to dramatically reduce smoking rates, yet are increasingly subject to excessive restrictions. The peverse effect is that people continue smoking cigarettes. This is lunacy from the perspective of both public health and consumer freedom. Governments must recognise that regulating e-cigarettes as medicines will increase prices, harm competition and damage health.”

Notes to editors:

To arrange an interview about the report please contact Stephanie Lis, Communications Officer, slis@iea.org.uk or 07766 221 268.

The full report, Free Market Solutions in Health: The case of nicotine, written by Christopher Snowdon, can be downloaded here.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.