LONDON -- As the popularity of electronic nicotine delivery systems (ENDS) has risen, so has a much darker problem: black market and counterfeit products. Liberty Flights founder Matthew Moden told The Wall Street Journal that black market versions of his company's vapor products have popped up in markets across the globe.
"We've got a brand, we're well-known," said Moden, who founded the Darwen, England-based company in 2009. "The same problem is faced by Louis Vuitton."
Liberty is hardly the only victim: British American Tobacco PLC's forensic experts have even discovered unlicensed e-cigarette versions of the company's combustible tobacco brands, including Kent and Vogue.
These black market products are usually made with cheaper materials, such as dead batteries or e-liquids with dangerously high levels of nicotine, and sell for well-below market rates.
"We do see a vast number of substandard products being sold," Emma Logan, a director at the Edinburgh, Scotland-based JAC Vapour Ltd., told the newspaper.
Although e-cigarettes currently only represent a small percentage of the total global tobacco market, Nikhil Nathwani, managing director of Nicocigs Ltd., said the "potential to attract illicit trade is a real concern."
That black market concern is expected to grow with the e-cigarette market: global sales of legitimate vapor products were valued at $7 billion in 2014 (compared with $800 billion for the regular tobacco market), but Euromonitor International predicts vapor sales will reach $51 billion by 2030.
The European Union is attempting to curb the vapor black market through stricter regulations and a standardization of products sold in the region, such as setting maximum nicotine content and a reduction in maximum cartridge size. EU officials argue these new regulations (which take effect next year) will protect consumers and keep lower-quality products out of the area.
"The commission doesn't estimate the new measures will have a significant effect on prices and there is no evidence that the provisions will contribute to increased illicit trade," Enrico Brivio, spokesperson for the European Commission for Health, told the Journal.
Vaping manufacturers, however, counter that compliance with these new regulations will drive up pricing and make lower-price black market options all the more appealing.
"The minute you make the real product more expensive, that's when the illicit trade really takes hold," Ray Story, chief executive of the Tobacco Vapor Electronic Cigarette Association, told the paper. "It's just the tip of the iceberg."
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