Interview with Germany’s BfTG: 40% of Market Lost to Illicit Trade, Industry Calls for Smarter Regulation

Key Points | Conversation with BfTG

• Association profile: Founded a decade ago, representing small and medium-sized vaping firms in Germany and companies operating in the German market; core work is policy advocacy and harm-reduction education.

• Market potential: Germany’s smoking rate is still about 30%; with supportive harm-reduction policy, growth headroom is significant.

• Policy uncertainty: The EU Tobacco Products Directive (TPD) is up for revision; future regulatory direction will profoundly affect the sector.

• Industry transition: The EU 2027 battery regulation will phase out disposables; companies should invest early in rechargeable systems.

• Association stance: Evidence-based advocacy and compliance leadership to help build a policy environment that supports harm reduction.

2Firsts, September 20, 2025, Dortmund, Germany —— during InterTabac in Dortmund, 2Firsts held an in-depth discussion with Philip Drögemüller, Managing Director of the German Smoke-Free Alliance (Bündnis für Tabakfreien Genuss e.V.，BfTG), on the current state of Germany’s vaping market, policy risks, and the industry outlook.

A Decade-Old Association: Focus on SMEs and Harm-Reduction Education

Founded ten years ago, BfTG represents small and medium-sized enterprises in Germany and companies doing business in the country. Its core functions are giving the industry a voice, advancing policy dialogue, and communicating the concept of tobacco harm reduction to media and the public.

“Many policymakers still cannot distinguish the risk differences between smoking and vaping—this is a long-term area where we must keep working,” Drögemüller noted.

Black Market Share as High as 40%

On the current market, Drögemüller acknowledged that the legal sector faces serious challenges, with the illegal trade being the biggest threat.

“We estimate the black market accounts for 40% of Germany’s market. According to our survey last year, member companies lost about 30% of turnover on average,” he said.

The popularity of disposable products has made it easier for illegal products to enter distribution channels such as kiosks and other retail outlets.Although German customs are active in enforcement, manpower and political-structural constraints make full coverage difficult.

Flavor Bans Could Be “Devastating”

Asked whether Germany might follow the Netherlands or the UK, Drögemüller said flavor bans are “the greatest threat to the entire industry.”

“In early 2024, the Netherlands implemented a flavor ban. Within just three months, the legal market shrank sharply while the illicit market surged—resulting in more minors encountering unsafe products.”

He emphasized that flavor restrictions are likely in the coming TPD revision, so the industry must engage at the EU level to prevent one-size-fits-all extremes.

Active Advocacy: Using Scientific Facts to Persuade Policymakers

BfTG maintains dialogue with parties across Germany and is a founding member of the Independent European Vape Alliance (IEVA) at the EU level.

“Our method is to use scientific data and concise charts to communicate with policymakers, stressing that vaping is a harm-reduction tool for adults, not a gateway for youth,” Drögemüller said. “More politicians are willing to listen, and we’re cautiously optimistic.”

Market Potential and Policy Advice

Germany’s smoking rate remains about 30%, far higher than the UK’s 12%. Drögemüller believes that if Germany clearly supports vaping as a harm-reduction tool—as the UK has—the market still has tremendous growth potential, alongside significant reductions in public healthcare expenditures.

For companies, he urged strict compliance, avoiding any involvement in illicit trade, and planning an early transition from disposables to rechargeable systems, as the EU battery regulation will eliminate disposables by 2027.

Drögemüller concluded: “Vaping is currently the most effective smoking-cessation alternative. If it is wiped out by blanket policies, that would be a setback for public health. Our mission is to ensure compliant businesses have a stable, predictable future.”

For more on-the-ground coverage, visit the 2Firsts InterTabac Special Section.