Quick Overview
This week saw three Asian countries (Vietnam, Indonesia, and Malaysia) simultaneously advancing restrictive vape policies, while Europe remained split between Spain’s hardline approach and Italy’s pragmatic resistance. PMI’s Q2 results confirmed the smoke-free transition is accelerating faster than most analysts predicted, with VEEV e-vapor growing 55% year-over-year.
1. Spain Approves Draft Tobacco Control Law: Vaping Treated Same as Smoking
Spain’s Council of Ministers approved a draft tobacco control law on July 21 that extends smoking bans to hospitality terraces, beaches, public pools, and national parks. E-cigarettes, heated tobacco, and nicotine pouches face the same restrictions as combustible cigarettes. A 15-meter protection zone around schools and hospitals is also included.
The hospitality sector opposes the terrace ban, arguing it will push consumption into private homes. The bill now moves to parliament, where amendments could narrow or expand its scope. Spain is Europe’s fourth-largest economy, and this law aligns it with the most restrictive EU tobacco control models. Spain’s approach mirrors a growing trend of treating all nicotine products identically, ignoring established risk differences between combustion and non-combustion products.
2. UK Targets Vape Shops with Higher Business Rates
The UK government is reviewing business rates relief for vape shops while granting a 20% reduction to pubs, according to a report from Tobacco Reporter. The UK Vaping Industry Association accused the Prime Minister of demonizing harm reduction retailers. The Vaping Products Duty remains on track for implementation in October 2026.
This follows the UK’s broader push to restrict vaping through plain packaging rules, flavor restrictions, and display bans, a 12-week consultation that runs through October 2. We published a full breakdown of the business rates story along with the proposed Vaping Products Duty timeline. The contradiction is clear: the UK government simultaneously promotes vaping as a smoking cessation tool while imposing financial penalties on the retailers selling those products.
3. Vietnam Proposes to Legislate Ban on Vapes, Heated Tobacco
Vietnam’s Ministry of Health is moving to codify the country’s de facto ban on e-cigarettes and heated tobacco into formal legislation. The draft law would define and prohibit these products while also introducing a nationwide ban on tobacco product displays at retail outlets. This is a shift from Vietnam’s current approach, where the ban exists in practice but lacks clear statutory foundation.
Vietnam joins a growing list of Southeast Asian nations tightening nicotine regulations. The trend toward codifying existing bans suggests governments are moving from temporary measures to permanent regulatory frameworks, making future policy reversals more difficult.
4. Indonesia Considers Vape Ban Over Drug Abuse Concerns
Indonesia’s President Prabowo Subianto has directed multiple government agencies to develop stricter regulations on vape imports, distribution, and sales. Drug abuse is cited as the primary concern. Government data shows 73% of drug abuse cases involve synthetic drugs, with e-cigarettes increasingly used to consume ketamine and etomidate. Similar debates are playing out in Malaysia, where health advocates have renewed calls for a nationwide vape ban over the same concerns.
The conflation of drug abuse with nicotine vaping is a recurring theme in Southeast Asia. Australia’s experience with drug-laced black market vapes shows that prohibition drives the problem underground rather than solving it.
5. PMI Q2 2026: Smoke-Free Revenue Breaks $11 Billion
Philip Morris International reported Q2 results on July 22 with net revenues of $11.2 billion, up 10.4% year-over-year. Smoke-free products now represent approximately 42% of total sales. IQOS shipments rose 7.6%, VEEV e-vapor shipments jumped 55.1%, and Zyn nicotine pouches are now available in 60 markets with 2.9 billion pouches shipped in the US alone.
Adjusted diluted EPS rose 15.2% to $2.20. PMI’s smoke-free transition is past the point of no return. The company now generates more revenue from non-combustible products than from cigarettes in many markets. The nicotine pouch category continues to attract new entrants as well, with ALP launching across 11 European markets in July.
6. Italy’s Meloni Government Resists EU Pressure on Vape Regulation
Italy’s coalition government under Prime Minister Meloni has maintained differentiated regulation for vaping products despite EU recommendations to treat all nicotine products identically. Milan’s 2025 outdoor smoking ban explicitly excludes vapes, distinguishing combustion from non-combustion. Deputy PM Salvini has defended e-cigarettes as viable alternatives to smoking.
Italy’s approach offers a counterweight to the EU’s trend toward uniform regulation. While the US moves toward taxing nicotine products and Spain toward a blanket ban, Italy’s pragmatic middle path may prove more durable if it can demonstrate better public health outcomes.
7. Indonesian Tobacco Groups Oppose Standardized Packaging for E-Cigarettes
Indonesian tobacco industry groups urged President Prabowo to delay or modify regulations under Government Regulation No. 28/2024. Proposed measures include plain packaging, limits on tar and nicotine, and restrictions on additives — covering both cigarettes and e-cigarettes. The Indonesian Employers Association (Apindo) supports some measures (ban on underage sales, raising purchase age to 21, health warnings covering 50% of packaging) but argued standardized packaging would undermine legitimate businesses.
This is a significant development because Indonesia operates one of the world’s most complex multi-tier tobacco excise systems. Adding plain packaging requirements for e-cigarettes while maintaining an 8-tier tax structure for combustibles creates a regulatory environment that even compliance professionals struggle to navigate.
Weekly Trends & Analysis
The most notable pattern this week is the coordinated push across Southeast Asia. Vietnam, Indonesia, and Malaysia all advanced restrictive vape policies within the same 48-hour window, and all three cited drug abuse rather than health concerns as the primary justification. This suggests a regional coordination effort, likely through ASEAN health channels, that treats vaping as a drug delivery mechanism rather than a harm reduction tool.
In Europe, the divergence between Spain and Italy highlights a fundamental disagreement about nicotine regulation. Spain’s approach treats all nicotine products as equivalent to smoking. Italy’s approach distinguishes between combustion and non-combustion. The EU’s Tobacco Products Directive revision, currently under consultation with over 80,000 submissions, will effectively decide which approach becomes the European standard.
PMI’s 55% VEEV growth and 60-market Zyn expansion confirm that the industry’s center of gravity is shifting from open systems to closed pod systems and nicotine pouches. This has regulatory implications: closed systems are easier to tax and regulate than open systems, which may explain why governments are accelerating regulatory frameworks rather than waiting for the market to mature.
What to Watch Next Week
Spain’s tobacco control bill enters parliamentary debate. Amendments could substantially change the scope of the vaping restrictions. The UK’s Vaping Products Duty implementation timeline becomes clearer as October approaches. Indonesia’s agencies are expected to report back to President Prabowo with specific regulatory proposals. PMI’s sustained smoke-free momentum will face its next test when Q3 data begins to emerge. The EU’s TPD revision consultation closes in the coming weeks, and the volume of submissions (80,000+) suggests the commission will need time to process responses before publishing its legislative proposal.
Kevin Li — Founder & Editor, VapeObservation.com Kevin reviews vape products hands-on, prioritizing real-world performance over manufacturer claims. His goal: honest, practical advice that helps everyday vapers make informed choices. Before launching VapeObservation, he was a longtime vaper frustrated by promotional content disguised as reviews. Every article on the site reflects his commitment to data-driven, reader-first testing.
