China to strengthen supervision on e-cigarettes, new tobacco products; share of the e-vapor company hit
Chinese regulations on tobacco management are to be revised to strengthen supervision and administration of e-cigarettes and other new tobacco products. Shares of e-cigarette and e-vapor companies hit after the official statement was released on Monday.
A clause is planned to be added to the Detailed Rules for the Implementation of the Tobacco Patent Sales Law of China as Article 65, saying that "regulations on e-cigarettes and other new tobacco products shall be implemented about the relevant provisions on cigarettes in the regulations," read a statement by the Ministry of Industry and Information Technology (MIIT) on Monday.
The stock price of RLX Technology Inc, one of the biggest manufacturers, distributors, and sellers of e-vapor products in China, dropped more than 24 percent to $14.70 at 9:55 GMT in pre-market trading on the US market, following the MIIT statement. Its stock price closed at $19.46 on Friday, with a market value of $30.2 billion.
MIIT, together with State Tobacco Monopoly Administration, vowed to update current rules to fit into new situations that have emerged in the field of market supervision of new tobacco products such as e-cigarettes.
"The revision will clarify the legal basis for the supervision and administration of e-cigarettes and other new types of tobacco products. It will be coordinated with the Law of the People's Republic of China on the Protection of Minors and other laws and regulations," read the document.
Meanwhile, the new rules will effectively regulate the production and operation of e-cigarettes, solve the quality and safety risks and false advertising problems related to e-cigarettes, according to MIIT.
Before the revision, the State Tobacco Monopoly Administration said it will step up regulation of e-cigarettes and help build a new market supervision mechanism during a telephone meeting on Thursday.
Regulators are soliciting public opinions on the revision until April 22.