🇨🇳 China Confirms Nicotine Pouches Are Now Under the State Tobacco Monopoly
China’s move to classify nicotine pouches within the state tobacco monopoly is now confirmed not only by specialist regulatory trackers but also by 2Firsts, which has published detailed reporting on the shift https://lnkd.in/gnx-jTTd
The direction of travel is clear: a domestic market increasingly dominated by China Tobacco, with very limited space for private pouch manufacturers.
Additional confirmation
- Regulatory analysts report that STMA has now formally classified nicotine pouches and other smokeless nicotine products as tobacco, ending their grey‑area status and placing them under the same rules as cigarettes and cut tobacco.
- Earlier State Council and General Office documents had already pulled “oral tobacco products, nicotine pouches and nicotine gels” into full‑chain tobacco enforcement, signalling this shift well in advance.
What this means for private Chinese manufacturers
Both 2Firsts and external trackers converge on the same outlook: private‑label oral nicotine manufacturers will not have a viable domestic future once monopoly rules and “restricted” industrial policy are fully applied. This mirrors the earlier elimination of herbal heated products after their reclassification as tobacco.
Expected responses include:
- Pivoting to OEM/ODM export production under China Tobacco where possible
- Relocating capital, IP and machinery to more permissive, lower cost manufacturing hubs — especially Indonesia
Likely relocation to Indonesia and similar markets
Indonesia offers:
- Lower regulatory barriers
- Established ecosystems for novel nicotine and tobacco products
A likely pattern: Chinese entrepreneurs shift production offshore (e.g., Indonesia), focus on exports to Europe/MENA/Asia, and gradually exit the tightly controlled domestic pouch space — while China Tobacco develops its own state‑backed pouch lines.
GINN perspective: harm reduction & revenue logic
From a harm‑reduction standpoint, treating low‑toxicity, smoke‑free pouches the same as combustible cigarettes is not risk‑proportionate and restricts the development of reduced‑risk alternatives inside China.
From a political–economic standpoint, the logic is clearer: by folding pouches into the monopoly, the state ensures that any shift from smoking to oral nicotine happens under China Tobacco’s control, protecting monopoly revenues and tax flows.
