Bulgaria has been embroiled in debate about a potential vape ban, including proposals to target disposable vapes. Arkadi Sharkov shines a light on the situation in Bulgaria, including the impact a disposable vape ban could have on a developing illicit market and the knock-on effect such a ban may have on vapers in the country.
Transcription:
[Joanna Junak] (00:04 - 01:42)
Hello and welcome! I'm Joanna Junak and this is GFN News on GFN.TV. Bulgaria has one of the highest smoking rates in Europe, which presents a significant public health and social issue. However, given the recent proposals to ban all vaping products, followed by the decision to limit the ban to disposable vaping products, it might suggest that Bulgaria does not fully support harm reduction strategies. How does the situation in the country look? Will it succeed in finding a balance between the fight against tobacco smoking and regulating the e-cigarette market? Joining us today to discuss the smoking and vaping situation in the country is Arkadi Sharkov, a macroeconomist specializing in health systems analysis and public sector management. His areas of expertise include health budgeting, fiscal policy, the design of incentives to promote affordable health care and the optimization of public expenditure. Hello Arkadi. First of all, can you tell me what the smoking rate is in Bulgaria and whether smoking is a major problem in the country?
[Arkadi Sharkov] (01:42 - 03:36)
Smoking, it is a major problem, not only in Bulgaria, of course, in the whole European Union. However, Bulgaria, in terms of rates, it's the first place in the European Union. Over one third of adults smoke. It still remains a major public health issue, contributing significantly, of course, to preventable diseases and healthcare costs. So it's around 38% the prevalence of smoking adults. Of course, the bigger proportion is in the male, so 50% of male smoke compared to the 27% of female smoke, and the age gaps in which they are consuming tobacco, we can say smoking, of course, let's put it like that, is between 25 and 54 years of age. So another problem that occurs here is that people start smoking from an early age. So the earliest reported age, not publicly reported, it was 15 years of age. However, if you go to some areas of Bulgaria which are with minorities, some of the children start smoking from 7, 8 years of age. phage. So it's a big problem and of course it's the biggest contributor towards cardiovascular diseases like stroke, like ischemic heart disease. We have the highest rate of cardiovascular diseases compared to the European Union. We also have one of the highest rates in terms of Oncological diseases and one of the slow cures, which is also invisible to detect on early stage, is the respiratory disease like COPD. So COPD also is on a very high percentage. Sadly, it gets diagnosed very late, very late in time. So it's a problem.
[Joanna Junak] (03:38 - 03:47)
And despite the high smoking rate, the government has decided to ban vaping. What was the original proposed regulation in this regard?
[Arkadi Sharkov] (03:48 - 07:08)
So we started from a case of a child that has fallen after New Year, that has fallen from a window after using a vape, which Of course, the vape was not with nicotine. It had some narcotic substance in it. And narcotic, I speak of these artificially produced narcotic substances. And, of course, it lost consciousness and fell out of the window. This was the first case. And the second case came in February this year when a child, after consuming a vape, illicit vape, has fallen on the street and had some head trauma. And after that, of course, politicians reacted to that and decided to do an overall ban of all vapes in order to protect children's health. or young adults health because it is a trend currently, instead of smoking cigarettes to use vapes with different tastes, etc. So this was the first step towards the regulation that was proposed after that. Interestingly enough, when we're speaking about vapes, I think both of the Both of the cases were examples of illicit vapes, not vapes which were taxed by excise and which VAT was paid for, but with illicit substances within them. So it was basically narcotic consumption. And as we say, instead of curing the problem, politicians of course decided to ban the vapes as a whole, and currently still the ban is not in place because there are discussions in the parliament. Typically, discussions when speaking about excise goods roam around first, of course, the public health effects, and second, the income that comes to the Ministry of Finance from excise taxes. So from vapes, it's around 200 million per year because they're taxed with an excess tax. So it's 200 million a year that comes into the overall budget, which is a good portion, although a small percentage compared to funds that come from tobacco, other tobacco products that come from gasoline and other types of products. effect size goods, it's still a big proportion. Since we are, it's another topic, we're striving for a deficit under 3%, deficit for the budget under 3% in order to enter the Eurozone. I think still this is why the law has not passed, otherwise they will lose these 200 million and they cannot put them in the overall budget prognosis and predictions. So it's still just voted once, it has to be voted twice in order for it to become an efficient law.
[Joanna Junak] (07:10 - 07:19)
But despite the issues mentioned, sometime later the government decided to limit the ban to disposable vapes. Can you explain why?
[Arkadi Sharkov] (07:19 - 09:56)
It could be some issues also about, how should I say, within the market of different competitors. You can put it like that. Some kind of a protectionism. It could be also a reason like that. Of course, it was not discussed publicly, but you can always think when certain kinds of vapes are banned, instead of other kinds of products, why there is a different, differentiated treatment of those products. So this is a further decision. As we say, it's still under discussion. The Ministry of Health has to give its feedback to the healthcare committee and also to the budgetary committee and also I believe also the customs under the Ministry of Finance also have to give their feedback on the fiscal effects of such a ban. Another interesting topic when we're speaking about balance of certain products is ecology. There were some also ecological ideas behind the ban of disposable waste because the lithium in the battery cannot be recycled. So this is another topic that has a reason from the political point of view. And the As we economists say, once you ban something, you create a bigger illicit market for it, so contraband goods. The problem with Bulgaria is that we are at the, let's put it, the outskirts. We are within the European Union, but after us, there are countries which are not members of the European Union, from where some contraband goods can enter the market, since there is a ban in Bulgaria. It might start an illicit market for contraband goods, which could become, of course, more harmful not only towards the economy because taxes wouldn't go in the right place, but also harmful towards consumers due to that if a good has a bond role and it's illegal. it's under the law with an excise tax, it is easily traceable. If it doesn't have anything and you don't know that it's in on the market, then many other public health problems could arise. The one that we actually saw in those two cases when the first sadly ended with the death of a child, the second one only with the fracture of the head. Thankfully, nothing like this was reported since then, but you never know.
[Joanna Junak] (09:58 - 10:09)
Okay, so let's briefly talk about the reactions of anti-smoking organizations and the vaping industry to the government's initial proposal. What was their opinion?
[Arkadi Sharkov] (10:10 - 11:13)
So let's put it like that. The vaping industry, of course, resisted. They have, I believe, two associations here, so they resisted by sending their letters of... letters of opinion towards the parliament. And I believe that they are still taken into account. When we speak about how the organizations which are anti-smoking, so It was opposed by the vaping industry, argued it would help smokers trying to quit. Some anti-smoking groups supported tire regulations of youth access, but were divided on completely banning less harmful alternatives for adult smokers, you can say. So it was divided on the topics of fully banning these less harmful alternatives.
[Joanna Junak] (11:14 - 11:19)
So how might a complete ban affect public health in the country?
[Arkadi Sharkov] (11:19 - 11:47)
Total ban could drive current vapors, and some of them are ex-smokers, of course, back to traditional cigarettes, potentially increasing, of course, smoking rates, which we're trying to decrease. And it will also remove the harm reduction option for those looking to quit combustible tobacco. So we can say that there can be a correlation between those two actions.
[Joanna Junak] (11:49 - 11:54)
And what consequences could a vaping ban have for the country in general?
[Arkadi Sharkov] (11:54 - 13:50)
would likely spur an unregulated black market, leading to unsafe counterfeit products, and of course, making it harder to control the product quality and limit the yield taxes. As we say that Bulgaria is on the border of the European Union, and we are bordering with countries which are outside the EU, one which is with Asia, the other still that are under, how should I say, accession, toward accession for the EU. So we had problems with illicit cigarettes in the past with our border with Turkey, with contraband goods. Thankfully, you know, the customs were now currently a better equipped to stop such a trade but still it's a land border it can easily be crossed and second we have also a sea border through the ports that can be easily used as a route for such an illicit trade. Typically, this is what happens. This also can and could happen if excise taxes are increased with an irregular pace, typically when you put a very high taxation on something. it gets, someone finds a black market tool and presents it at a lower price, one of the first. And second, there is the Lafayette curve, it's an economic, you can say it's an economic lesson that you get the most of taxation until a certain point, once it reaches a level that cannot be sustained, the benefits from this taxation drop down, meaning that people start avoiding it or thinking of other ways to hide their use of a certain good or to hide their income as it is represented in the Lafayette curve.
[Joanna Junak] (13:50 - 14:20)
Thank you, Arkadi. We will keep an eye on the situation. That's all for today. Tune in next time here on GFN TV or on our podcast. And make sure to check out our social media pages for the latest updates on this year's Global Forum on Nicotine conference. We also encourage you to submit your work for GFN Science Lab, the Film Festival and GFN Fives. Thanks for watching or listening. See you next time.