E-cigarette sales are booming in Germany, with revenues reaching an estimated one billion euros in the past year. The industry is set to showcase its products at a major trade fair in Dortmund this week.
Industry growth and market expansion
The e-cigarette business is gaining momentum in Germany. Retailers and manufacturers of electronic devices and associated liquids generated an estimated revenue of over one billion euros last year, approximately 25% more than in 2022, according to the Alliance for Tobacco-Free Enjoyment (BfTG) in Dortmund.
The Ruhr area city will host the Intertabac trade fair starting Thursday (September 19), where numerous e-cigarette companies will present their products alongside tobacco companies. Electronic cigarettes, also known as vapes or e-shishas, heat liquids and the resulting vapor is inhaled. Compared to traditional tobacco cigarettes, they release fewer harmful substances. However, “vapes” still carry health risks, and medical professionals advise smokers to quit completely rather than view e-cigarettes as a lesser evil.
The e-cigarette market has been experiencing strong growth for years. Initially a niche market, it has now become a mass business. According to the BfTG, revenues increased by 40% in both 2022 and 2023. The industry spokesperson derived these figures from member companies and their own analyses. While the growth has slightly slowed to 25% this year, it remains at a high level.
BfTG CEO Dustin Dahlmann attributes this growth to an increase in points of sale. “More and more points of sale outside of specialist shops, such as gas stations, supermarkets, and kiosks, now offer e-cigarettes and liquids,” he says. “This has increased awareness of the products, and many smokers are switching from cigarettes to e-cigarettes.” According to the BfTG, around 3 million people in Germany use e-cigarettes, 0.5 million more than a year ago.
Disposable products and environmental concerns
Disposable e-cigarettes, which are discarded when their battery is empty, are controversial. Although they should be disposed of as electronic devices, they often end up in residual waste or recycling bins, as waste industry representatives complain. This can lead to fires in garbage trucks and disposal facilities if the electronic devices short-circuit and ignite other nearby waste. Environmentalists also criticize these disposable products for wasting resources.
According to the BfTG, the share of these disposable products in the overall e-cigarette market has decreased in recent years. While it was 40% in 2022, it dropped to 30% in 2023. This year, it is estimated to be only 20%. Industry representative Dahlmann expects the disposable share to continue declining next year. An EU ban on such products will take effect in 2027.
In addition to disposable products, there are reusable vapes with replaceable liquid cartridges (pods) and classic e-cigarettes where users buy liquids in small bottles or mix them themselves. Both of these products have rechargeable batteries.
Concerns over tax increase and black market
Industry representatives are worried about the upcoming tax increase, which will impose a tobacco tax of 26 cents per milliliter of liquid, six cents more than before. For the usual 10-milliliter liquids, which currently cost roughly eight to ten euros, the tax burden will increase by almost one euro, according to the BfTG.
The tax increase on liquids, effective at the turn of the year, is causing deep concern in the industry, as revealed by a BfTG survey of 300 e-cigarette companies in Germany. Many of them fear that the tax-induced price increase will lead to growth in the black market. The black market is already strong, with German citizens estimated to spend around 300 million euros annually on illegal liquids and e-cigarettes. “These products come from dubious sources, and their quality is extremely questionable,” says Dahlmann. “For our legal retailers and manufacturers, this leads to painful losses in revenue.”
Despite the efforts of authorities, the black market has hardly been contained due to a lack of sufficient personnel and structural resources, Dahlmann complains. “Politicians are failing to effectively counteract this.”
