The Underground Market of E-cigarette in UK and US

Apr.01.2025
The Underground Market of E-cigarette in UK and US
Underground e-cigarette market growth due to regulatory issues in UK and US, contrasting approved flavors and illegal sales.

Key highlights:

  • The e-cigarette market in the UK and US is shifting underground due to regulatory issues, with the UK's regulatory intentions contrasting with the illegal market expansion in the US.
  • The FDA has only approved a small number of e-cigarette flavors, leading to an increase in illegal sales as many products have been rejected.
  • The disposable e-cigarette market in the UK has shifted underground due to bans, with the illegal market accounting for 31% of sales, potentially leading to an increase in smoking rates.

According to a report by Filtermag on March 31, a study shows that e-cigarette products are increasingly turning to the black market in both the UK and the US jurisdictions.

 

Economist Roger Bate points out that the initial intention of regulating e-cigarettes in the UK was to ensure their safety, while also encouraging smokers to switch to e-cigarettes through lower taxes. However, the United States has yet to approve most e-cigarette products, leading to the expansion of illegal markets and confusion among retailers and consumers.

 

The Food and Drug Administration (FDA) has only approved a few flavors of e-cigarettes for legal sale, with only one flavor besides tobacco being available, and rejecting sales applications for thousands of other products. This situation has put many convenience store owners in a difficult position, with several store owners being forced to remove unauthorized products from their shelves due to warning letters from the FDA.

 

Market research firm WSPM analysis shows that in multiple states, up to 97% of abandoned e-cigarettes are being sold without authorization. Despite this, some unregulated vendors continue to sell products through informal channels such as street vendors and flea markets.

 

In the UK, the disposable e-cigarette market is gradually moving underground due to an impending ban. According to the latest study by Betts, the illegal e-cigarette market in the UK now accounts for 31%.

 

Bette points out that smoking is the real threat, and that banning or restricting e-cigarettes as an alternative product could actually lead to an increase in smoking rates. In the United States, the new FDA head Marty Makary should expedite the authorization of e-cigarette products currently in a legal gray area, in order to establish a legitimate market that meets consumer demand. In the UK, policies should be reinstated to encourage the legal use of high-quality e-cigarette products and lift the ban on disposable e-cigarettes, as recent data shows smoking rates in some areas of England have increased for the first time in 20 years, which may be related to crackdowns on e-cigarettes.

 

We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

BAT Regional Director Fred Monteiro Supports Spain’s Nicotine Rules but Opposes 0.99mg Nicotine Pouch Limit
BAT Regional Director Fred Monteiro Supports Spain’s Nicotine Rules but Opposes 0.99mg Nicotine Pouch Limit
Spanish newspaper El Confidencial interviewed Fred Monteiro, Regional Director for Americas and Europe at British American Tobacco (BAT). Monteiro said BAT supports setting regulatory limits for nicotine products but opposes Spain’s proposed 0.99mg nicotine-per-pouch limit, arguing that such a restriction could affect adult smokers’ transition to alternatives. He said nicotine regulation should be based on scientific evidence and harm reduction principles. Monteiro also said smoke-free products now account for around 25% of BAT’s Americas and Europe business and nearly 30% of its Europe business
BAT
Jul.30
PMI Q2 Call: ZYN Growth, IQOS Pricing and a Diverging Global Tobacco Market
PMI Q2 Call: ZYN Growth, IQOS Pricing and a Diverging Global Tobacco Market
Philip Morris International’s second-quarter earnings call offered new detail on its smoke-free strategy. Management said it would increase U.S. investment behind nicotine pouch brand ZYN, keep IQOS focused on volume before stronger pricing, and use SENTIA, DELIA, LEVIA, VEEV and ZYN to manage tax and regulatory pressure across Japan and Europe. Analysts from Goldman Sachs, Morgan Stanley, UBS and other firms also pressed PMI on profitability, market share, cigarette resilience and the durability of its global transformation over coming quarters.
Jul.24
UK Sets Oct. 29 Start for New Vape Retail Rules Covering Age Checks, Giveaways and Discounts
UK Sets Oct. 29 Start for New Vape Retail Rules Covering Age Checks, Giveaways and Discounts
The UK Department of Health and Social Care published new guidance on Aug. 11 outlining the next phase of retail rules under the Tobacco and Vapes Act 2026, which will take effect on Oct. 29, 2026. The measures extend the minimum age of sale of 18 to all vaping and consumer nicotine products and restrict proxy purchasing, promotional giveaways and substantial discounts. Relevant offences in England, Wales and Scotland may carry a £200 fixed penalty notice, while persistent offenders can face temporary sales bans.
Aug.12
BAT Restructuring to Affect 9,000 Roles as Tobacco Group Pushes Cost Cuts and AI
BAT Restructuring to Affect 9,000 Roles as Tobacco Group Pushes Cost Cuts and AI
British American Tobacco (BAT) plans to cut about 5,500 jobs globally and shift around 3,500 roles to strategic partners by the end of 2026, affecting about 9,000 roles in total, as the company seeks to simplify operations, strengthen technology capabilities and deliver £600 million in annual savings by 2028.
BAT
Jun.29
UK Parliament Briefing Puts Vape Hardware Design and Materials in Regulatory Focus
UK Parliament Briefing Puts Vape Hardware Design and Materials in Regulatory Focus
The UK Parliament’s Parliamentary Office of Science and Technology (POST) has published a scientific briefing reviewing current evidence on the health effects of vape device components, including heating elements, power settings, metals, plastics, batteries and e-liquid ingredients, signalling growing regulatory attention to device design and whole-product systems beyond e-liquids, flavours and packaging.
Special Report
Jun.29
U.S. House Defense Bill Includes Pilot Review of Vapes, Nicotine Pouches and Heated Tobacco for Military Smokers
U.S. House Defense Bill Includes Pilot Review of Vapes, Nicotine Pouches and Heated Tobacco for Military Smokers
On July 23, 2026, the U.S. House of Representatives passed its version of the Fiscal Year 2027 National Defense Authorization Act (NDAA), which includes Section 707 provisions requiring the Department of Defense to evaluate tobacco use and nicotine alternatives among military personnel. The pilot program would examine products including vapes, nicotine pouches and heated tobacco products, primarily among active-duty service members who continue using combustible tobacco. The provision is a policy evaluation effort, not an authorization for military vaping promotion or a ban on vape products.
Jul.28