DIMITRIOU, Mr Savvas, Chairperson, Australian Vaping Advocacy, Trade and Research Inc.

CHAIR: Welcome. Thank you for joining us this afternoon. Do you have any objection to being recorded by the media if they happen to be present this afternoon?

Mr Dimitriou : No.

CHAIR: I should advise you that these are formal proceedings of the parliament and the giving of false or misleading evidence is a serious matter and, in some circumstances, could be regarded as a contempt of the parliament. Today's proceedings will be recorded by Hansard and attract parliamentary privilege. We have your written submission. Would you like to make an opening statement?

Mr Dimitriou : Yes, I would. Firstly, we are appreciative of the opportunity to be here today and engage in this dialogue. For the longest time this debate has continued in Australia without any industry input whatsoever. We have often found that decisions have been made at a state level without any consultation whatsoever with the hundreds of men and women who run small vaping businesses in Australia who between them contribute hundreds of millions of dollars to the Australian economy and employ many hundreds of people. So thank you for inviting me to be part of this process and, indeed, thank you for undertaking this immense challenge. This is one of the most important public health opportunities in recent decades. Australia is seriously lagging behind other countries in respect of sensible, proportional regulation of this industry. In particular, our prohibitionist attitude towards liquid nicotine, which, as I am sure every member of the committee is aware, stands in stark contrast to much of the rest of the world.

I am here in my capacity as the chairperson AVATAR, which is Australia's vape industry peak body. Our membership comprises many of the largest retailers and wholesalers of vaporisers and e-liquids in Australia, and lots of mum and dad retail stores as well. AVATAR is an industry association. We advocate on behalf of vendors, manufacturers and consumers of vaporisers and e-liquids. I think it is important to acknowledge up-front that we are not a medical or a scientific body. We don't present ourselves as such. We don't make any health claims nor are we are seeking to have vaporisers regulated as a cessation product in Australia. But we do think it is incredibly important that the government look to countries like the United Kingdom and New Zealand and to the hundreds of public health bodies in those countries that overwhelmingly support the use of electronic cigarettes, and who are actively reshaping their tobacco harm reduction policies around these products.

Our funding comes entirely from our membership and membership fees. We have no affiliations with the tobacco industry whatsoever. In fact, across the thousands of product lines that are sold in our members' stores not a single one comes from a tobacco company or even someone peripherally affiliated with a tobacco company—zero out of the thousands. As an industry association, we maintain and record mountains of retail data about these products. We actively collect statistics on the use of vaporisers—age groups, demographics and things like that.

As an industry body, we have also taken the initiative to introduce a set of standards for the sale, advertising and distribution of vaporisers and e-liquids for our members—an industry first The reason we have done that is we desperately want regulation. We have literally been asking for years to have this industry properly regulated, but proportional, sensible regulation that falls in line with the standards that are being set by countries like the United Kingdom and New Zealand.

Where AVATAR can contribute most in this discussion is something that up until now nobody has really had the opportunity or even the ability to present to this inquiry, which is the realistic and factual way in which vaporisers are actually being used by vapers and the way that they are being sold and how they are being manufactured and distributed, and of course the immense challenges that the government will face when it finally comes time to regulate this industry properly. There has been a lack of an industry voice. I think it is important to recognise that perhaps the opinions that people have about the way these products are sold don't match up with the reality. That is what I would like to provide you with today. I welcome any questions.

CHAIR: By way of background, could you describe for us the different regulatory situations between the states in relation to the sale of vaping products?

Mr Dimitriou : It is very hodgepodge in Australia.

CHAIR: That's the Federation for you!

Mr Dimitriou : Absolutely.

Mr TIM WILSON: It's called competitive government.

Mr Dimitriou : There's a lot of conflicting regulation and this is what makes it so difficult. You have to remember that the vast majority of retailers operate online; they don't operate physical retail stores. There are many retail stores but almost all of them will have an online component and there are many stores that are only online. So there is a disparate level of competition between companies, depending on which state they are based in. Western Australia has some extremely prohibitionist legislation with regard to the sale of vaporisers and e-liquids. Queensland, similarly, has some fairly crazy kinds of regulations around the manner in which these products can be sold. They set up a tip line, a dob-in line, so you can tell the government if your mate used a vaporiser with nicotine in it, for instance, which is an insane waste of public resources. In South Australia, where AVATAR is based, there is legislation pending at the moment. It was semi-introduced into the parliament and then there was a shake-up in the ministry that introduced it, so we are waiting to see how things will go in South Australia. Tasmania is similar in that there is legislation pending there.

CHAIR: Can you describe what the regulations are? You say Western Australia is a bit crazy, but what do they actually do?

Mr Dimitriou : It's different in each state but, for instance, in Western Australia this hardware cannot be sold or supplied. These are just consumer electronic products. Let's not forget that a vaporiser without e-liquid is just a battery and a coil. That can't be supplied in Western Australia. You can't have a storefront. It has just been banned outright essentially. In Queensland there are restrictions on store fronts and the manner in which you display products. Here in Victoria recently there was legislation passed. Some stores were grandfathered, so some stores have the ability to have a small display area in their store. They have banned vaping inside the store, so you can't test products inside the stores. Newer stores cannot display products at all. You have to have them covered up, as you would for cigarettes and other things. This makes it extremely difficult to sell these products in a safe manner let alone an open manner.

One of the things about vaping that many of its opponents don't understand is that there is such a wide variety of products in this industry. They are not all the same. It may seem that you just pick it up and press the button and it works, but it's not like a cigarette—anybody can pick up a cigarette and use it. These devices are vastly different from each other. They have complex electronics inside, so not being able to show a customer how a device functions means you are essentially handing them a piece of electronic equipment that they may not know how to use safely.

CHAIR: So you are prohibited from unpacking it and showing them how to use it?

Mr Dimitriou : In some jurisdictions, yes. One of the huge problems with all of this disparate legislation is that none of it is particularly well fleshed out. This legislation is written typically by people who genuinely have no understanding of what it is they are regulating. That's not out of malice—it's not as though they are writing legislation with the intention of making it difficult for store owners to live up to those requirements—it is that they genuinely don't know how these products operate, how they are being sold and what customers need. That's one of the problems. It can be hard to know, without sensible regulation, where the boundaries are, what you can do, what you can't do, what will run foul of the legislation and so on. That can be a huge difficulty.

CHAIR: So you would be opposed to sort of tobacco type controls?

Mr Dimitriou : Absolutely. This is not a tobacco product. We are the enemy of tobacco products, and that's the fact of it. Obviously the tobacco industry has an interest in this industry—and why wouldn't it when its business is dying? I'm sure they are desperate for anything that will replace that revenue. That doesn't mean that it's a sad thing that they are selling e-cigarettes. Every cigarette they don't sell is a positive. Every cigarette they don't sell may mean a person does not end up dying of emphysema. We are not the tobacco industry, and that's the important thing. To regulate e-cigarettes like the tobacco industry is insane to a degree.

CHAIR: What proportion of your customers buy e-liquid without nicotine?

Mr Dimitriou : One hundred per cent of customers who shop at AVATAR member stores buy liquid without nicotine, because we can't sell them liquid with nicotine. That probably comes across a bit glib, but the point is obviously none of our member stores are allowed to sell nicotine, because it is a scheduled substance. Customers purchase nicotine themselves from overseas—from New Zealand, the US, Europe and places like that. They import it into this country and then mix it themselves. Well over 80 per cent of the customers we service will purchase nicotine to add to the e-liquid they purchase in the store.

CHAIR: So they will actually mix it themselves?

Mr Dimitriou : They will mix it themselves. That actually introduces another problem, which is that in order to import nicotine you generally have to import pretty high strength nicotine—100 milligrams per millilitre, which is a 10 per cent solution of nicotine. At that concentration you could kill yourself if you handled that substance without the proper knowledge. If you spill liquid nicotine on your skin and you don't immediately wash it off, it can soak into the skin and cause nausea and dizziness. One hundred milligrams per millilitre is not going to kill you instantly, but certainly if you drank it it would kill you.

CHAIR: So your proposition is that the current environment is actually encouraging riskier behaviour?

Mr Dimitriou : Absolutely, without any shadow of a doubt. If we were allowed to sell liquid nicotine—

Mr TIM WILSON: Nicotine moonshine!

Mr Dimitriou : Precisely—nicotine moonshine is the way to sum it up. If we were allowed to sell liquid nicotine that had been premixed into e-liquid in concentrations of 20 milligrams per millilitre or less, which is in line with European tobacco control directives and the rest, it would be a far safer product for end users and there wouldn't be any risk of them spilling it on themselves when they were mixing it, with syringes and all the rest. It would be a far safer situation, and it would mean that the government had control over the quality of the nicotine that went in. There can be regulations around the way in which e-liquid is mixed and made and the ingredients that are used within it. At the moment it's a free-for-all.

CHAIR: Are you able to describe the regulatory environment that is being introduced in New Zealand and comment on that?

Mr Dimitriou : The New Zealand system is not perfect but it's a great start. It's certainly more permissive than anything that's been proposed in any of the states here in Australia. It has its problems as well. I'm not saying it's the perfect situation. I think the proper approach for Australia to take is a hybrid mix of what the UK is doing and what New Zealand is doing, with a view to encouraging the uptake of electronic cigarettes as a replacement for smoking. One of the big problems in New Zealand is the cost of application and the potential cost to retailers who want to sell these products, and anyone who wants to design and manufacture these products as well. One of the reasons the TGA solution here is not going to work is that, if you put up a huge barrier to these devices, especially a huge cost barrier, all you're doing is handing control over to the people who can afford to go through that process, which, ipso facto, is the tobacco industry. That is the only industry that will have the money to pay the TGA $200,000 in order to get one of their terrible devices approved. In the New Zealand model, that's where we have a lot of problems—the cost of doing those sorts of things.

Mr ZAPPIA: Can you tell me a bit more about the legislation that was proposed in South Australia?

Mr Dimitriou : There are a few different bits and pieces to it. One of the problems with that legislation was that there was a proposal to ban all online sales within South Australia. Obviously, tobacco products can't be sold to customers in South Australia currently. If you are Woolworths, Coles, Smokemart or whatever and you have an online website, you can't sell to customers in South Australia but you can sell to customers in Western Australia and every other part of the country. One of the proposals in South Australia was to have that same model for electronic cigarettes, which we were obviously very much against. A lot of our customers are in rural and regional areas. In Australia, you can walk into any deli or any Woolworths or Coles and buy a packet of cigarettes that the government knows will kill you. You can't do that with electronic cigarettes. The vast majority of towns don't have a vape store. So customers in those areas have to order online; they have no option but to order online. Banning online sales to just one group of people within a country doesn't change the demand for the product. No customer is going to say, 'I can't order from a South Australian company. I guess I just won't order.' They'll order from overseas or from interstate. The only thing that happens is that you disadvantage retailers in South Australia at no benefit to the public. That was our primary issue with the legislation introduced in South Australia.

There's also a lot of discussion around the advertising of electronic cigarettes. I hear a lot from opponents that vaporiser marketing is targeted towards children, that it's prolific or that it's everywhere, or whatever. None of that is true. We maintain a lot of statistics on the age of people who come into our stores. The average age of customers across our industry in South Australia is 39. Not only do we have the data to support that but we have invited pretty much anyone to come in and do the statistics themselves, independent of AVATAR, independent of the store itself. You can come in to any of our member stores, sit there and take ages, and you will find the same solution. Nobody has taken us up on that offer yet, funnily enough, but the offer is out there.

CHAIR: I think most of the examples given to the committee have come from either the United States or online. We have seen some fairly dramatic examples of targeting from the United States.

Mr Dimitriou : This is not to say it doesn't happen. It absolutely does happen. This is why regulation is important. There are cowboy vendors out there who don't care how old the person is. If you are a member of AVATAR, one of the requirements is that you don't sell to anyone under 18. It's not a law but it is a requirement of being a member of AVATAR. It's one of the things that we propose comes into effect as soon as legislation is passed in any state: ban sales to minors. It does happen; there is no doubt about it. The point is that it doesn't happen in stores that do the right thing—stores that would benefit under regulation.

Mr TIM WILSON: How do you enforce that? For sales online, is it like alcohol business websites, where you just enter your date of birth or something along those lines?

Mr Dimitriou : First and foremost, to make a purchase, most are using a credit card, which limits age groups anyway. You will find that pretty much every store will have an age verification pop up before you can make a purchase. There are other methods. In the US, for example, they have a system called BlueCheck, where a customer has to scan a copy of their driver's licence before they can make a purchase online. That is an optional thing they do there. It's technology that AVATAR's been looking into as well, to see whether we can design something similar for the Australian market. There are myriad ways around it, and there are myriad ways to enforce it. But the point is that you can buy alcohol online, and you can buy cigarettes online, so clearly the model works. It's just a question of how you apply it to this industry.

Mr ZAPPIA: Are any of the states bringing in, or have they brought in, legislation that you're supportive of?

Mr Dimitriou : None that we support in totality, obviously. The discussions that we've had with the South Australian government are very promising. We put up a convincing argument regarding the online sales side of things, and I believe that we've won some small concessions in that particular area. And we're happy with the level of negotiation we've been able to have with them and the dialogue we've been able to have. They've been willing to listen. So yes, I'd say South Australia is probably the closest thing, in terms of what we're happy with. But it will depend on the final form of legislation and when that actually gets put through parliament. We don't know what that will look like yet.

Mr TIM WILSON: Could we just, for the record, go through them, because there are lots of different devices. Today you have in front of you, for the record, we would say quite an obtuse vaping device in comparison with some of the other ones we saw earlier in the day that have been secured overseas. When you talk about the technical capacities of the different products and the risks that may come as a consequence, why is the one that you have in front of you now different from, say, one that is more slender and let's say more elegant in its design?

Mr Dimitriou : The difference in size just accounts for the battery, really. Fundamentally, that's what it is. So, this device will last longer than will a small pen-like device. And the quality of manufacturing is much better with this kind of product than in that slim pen device that the gentleman from the convenience stores association showed you. And for what it's worth, for those pen-like devices that you see sold in tobacconists—the disposable kind of pens—evidence is fairly clear that they're not anywhere near as effective as a proper device, something that's manufactured in a particular way.

But there is a lot of variation. The fundamental mode of operation is the same. There are batteries that heat a coil that atomises a liquid. But there are many different types of ways to heat a liquid. There are coils that are designed to operate at a very specific temperature that are made out of a very specific metal that heats up in exactly the right way with the right sort of profile. There are devices that output just a constant voltage. There is output of constant wattage—myriad different ways to do it.

Mr TIM WILSON: One of the things we've heard from some other advocates and lobby groups in this morning's session has been around the health consequences of people consuming e-cigarettes and that therefore they should be regulated like tobacco products, as the chair raised earlier, including point-of-sale restrictions et cetera. In the absence of having a framework for the sale of liquid nicotine at the moment, people import it from overseas. If it were to be plain packaged or something along those lines, would that lead to any changing behaviour in the market, do you think?—and similarly for the variations in the models of the vaporisers.

Mr Dimitriou : I think absolutely. You would see what's happened with the tobacco industry, which is that there's a mad race to the bottom in terms of pricing, and that's all that would happen. And let me tell you, there is a hell of a long way to go down when it comes to e-liquid pricing in Australia and in fact around the world. Liquid can be produced incredibly cheaply. So, all that would happen if you forced people down the plain packaging road is that you would just have incredibly cheap e-liquid sold for $1. And it wouldn't do anything to curb demand; it wouldn't do anything to curb the appeal.

The other thing is that when you smoke a cigarette—and I'm a former smoker; I smoked for 10 years—you don't particularly care which cigarette you smoke, as long as you're getting the nicotine and the mechanical action of smoking. But e-liquid is very different; e-liquid has flavour. Different people like different flavour profiles. I like a fruity kind of flavour, or a dessert kind of flavour. Someone else might like only bakery flavours. So, there's differentiation there in terms of the way in which people vape, and which products they're going to choose.

Mr TIM WILSON: Do you have any data about the number of people who have never been a smoker and have chosen to take up vaping without having gone through the process of being a smoker in the first place? A lot of what we've been hearing today is that vaping is a gateway for people to consumer tobacco.

Mr Dimitriou : We have a lot of data on that, as a matter of fact. Again, this data all comes from member stores. I can't speak to the cowboy stores that are doing things wrong, but certainly, within the stores that we're talking about, I think 97 per cent of people that walked into the store were former smokers or were still smoking and wanted to transition away from smoking. It was a very small percentage of people who came to a vape store—one of our member vape stores, anyway—who wanted to take up vaping having never smoked before.

But I make the point as well that the truth is I was young once. I'm not hugely old now, but I started smoking when I was younger, and I started smoking because people around me were smoking. My father smoked, my friends smoked and I wanted to experiment in that same sort of way. I was 15 years old, and I picked up a cigarette and smoked it. I became hooked, and then it did all kinds of damage to my lungs. I was always going to experiment. I wish that I had had access to e-cigarettes at that time, because I would much rather that I had experimented with an e-cigarette and then not continued to vape instead of experimenting with a cigarette and ending up with all kinds of lung problems and other issues in later life. This is an issue about harm minimisation. It's not just about transitioning people away from smoking; it's about minimising the harm that smoking does to people. The choice that people make is not between vaping and not smoking at all; it's between vaping and smoking. If you take away their access to vaporisers then they will smoke, and that's the reality of it. That's what we see. That's what we hear from the people who come into our stores.

Mr TIM WILSON: The data you just talked about seemed to be based on people presenting at a retail store. When your members sell product online, is that data collected through online transactions, or are we flying in the dark in that space?

Mr Dimitriou : We intentionally collected this information in the run-up to our submission not only to this committee but also to the South Australian select committee a couple of years ago. We had online surveys at the point of checkout on various member stores. We had Google forms and stuff like that set up that we distributed throughout the vaping community—self-selected, obviously. We're not going out and forcing people to give this information, but we got many thousand responses, so there's statistical significance to that data, and it came online from within the retail stores and from all walks of life.

CHAIR: There are just two further questions from me. You mentioned that in Western Australia the Western Australian government set up a 'dob in' line.

Mr Dimitriou : Queensland.

CHAIR: The Queensland government had done that. What type of interest did they get from the public in relation to that?

Mr Dimitriou : As far as I'm aware, not very much.

CHAIR: Were there prosecutions that arose?

Mr Dimitriou : As far as I'm aware, no, not yet. It just seems like an incredible waste of resources, and this is one of the other issues with the way in which you will regulate this industry eventually: if you put too much regulation on it, it is just a waste of resources to a degree, because the black market and the grey market in Queensland and Western Australia are prolific. The day that you were no longer allowed to have a vape store in Western Australia, the level of demand didn't change one bit. Nobody said, 'Well, it's illegal now; I'll never vape again.' They just said, 'Well, I know a guy at the markets who sells nicotine under the table,' or, 'I know a guy at that tobacconist who will sell me a vape under the table,' or, 'I can just order from China or whatever.' It didn't make a single bit of difference to the number of people that vaped. All it did was push all of that activity underground and all of the revenue underground. Australia loses out on tax money, and obviously it didn't make any difference in the number of people who vaped.

CHAIR: Sorry, I had three questions. This is my second question: we heard evidence and have seen some pretty graphic demonstration of the impact of exploding batteries. I'm just wondering whether you have any idea on what the incidence of that is in Australia, whether it's something that's affected your products and what are the triggers for batteries to explode.

Mr Dimitriou : Yes, absolutely. It is nowhere near as common as you might imagine. To be clear, these batteries are not special batteries just made for vaporisers; these are torch batteries. These are lithium ion 18650 batteries, which you can buy in any electronics store. They are high-powered batteries. Unlike with a AA battery, where, if you short the contacts, nothing's going to happen, if you do that on a high-powered battery like a car battery, for instance, you'll get a spark, and, if you do it for too long, eventually the battery will vent, in the same way that you've seen certain Samsung phones explode and blow people's legs off or whatever. The incidence is very low and is almost entirely due to a lack of knowledge about safe handling of these products, which is another of the issues that AVATAR wants to see solved in regulation. One of the points that we made in our submission is that we think there should be a certain level of training required to sell these products. So, if you're going to sell someone a vaporiser and the high-powered batteries, you should know how to tell that customer how to safely use those batteries. If you take one of these batteries and put it in your pocket with your keys, obviously the metal will short the contacts and you'll burn a hole in your leg, which is why we sell the little plastic containers that you keep your batteries in so that can never possibly happen. It's just an education problem, and it's not a huge problem, but it is one that we still want to tackle.

CHAIR: My final question was about the marketplace. In the current environment, it seems to be a sector where there is a domestic industry, if I can put it that way. If, within the Australian market, you saw the arrival of the large tobacco companies legally selling a product, what would do for the marketplace?

Mr Dimitriou : It's a very interesting question and one that we've thought about a lot. Like I said previously, we don't sell any products made by the tobacco industry and we have no interest in selling any of the products made by the tobacco industry.

CHAIR: Why? Are they not as good?

Mr Dimitriou : Genuinely, yes. Thankfully, I'm under parliamentary privilege, so I can say this!

CHAIR: Parliamentary privilege has its limits!

Mr Dimitriou : But our opinion is that a lot of these devices, especially the disposable kind of e-cigarettes, are not particularly effective in getting people to quit smoking, especially if they don't contain nicotine; they are almost never likely to quit smoking—which, by the way, is a problem with the methodology in the studies that antivaping lobbyists use to try to convince people that vaping doesn't work. If you test a device that doesn't work then obviously it's not going to get someone to quit smoking. If you test a device in a way that no reasonable human being could ever possibly use that device, then, yes, you're going to find that it doesn't work in the way you expect. But I digress. There is no great problem with them entering the industry. As I said, every cigarette that they don't sell is of benefit to Australia and to the person who otherwise would have smoked. I think it will introduce a whole new group of people to vaping who may not have been exposed to it previously, because there are so few vape stores in Australia that if you live in a country town you may not even know that they exist whereas if you walk into a tobacconist and they are selling an e-cigarette made by a tobacco company then you have the exposure to it. But that isn't very much a benefit for those people. Again if they don't buy a pouch of tobacco and instead buy a vaporiser then at least it gets them away from the tobacco, potentially. But I think that in fact it opens up the market a lot more to people like us and to our members.

Once those people experience an e-cigarette and figure out it is something that they want to continue with and try and use it to quit smoking, they will go online and they will find the community that exists, and that community will guide them towards more effective products like the one that I am using here today. It is important not to discount that fact. Nobody ever set up a Facebook group for Marlboro. Nobody ever had a smoking meet at their local pub. Do you know what I mean? Nobody ever wore a T-shirt that said how much they love the taste of Dunhill blue. But vaping is very much a lifestyle for a lot of people—people whose only group of friends will be people who vape. It's a very different type of consumer product from anything else that is regulated in this country, and that's something to think about.

Mr ZAPPIA: Can you tell the committee where most of the vaping products are actually made—not where they come from but where they are actually made?

Mr Dimitriou : In terms of hardware—a device like this: literally nobody makes hardware in Australia. We don't have any local manufacturers. It's a complex process, making a device like this. Ninety per cent of that hardware will come from Europe and the US—and China, of course, where quite a few of the larger companies are based. So it is just imported into Australia, duty is paid on it and all that sort of stuff, and then it is sold at retail, with GST and blah blah blah.

We would love to set up manufacturing in Australia, but the problem is that it is a big capital outlay in a landscape that has no certainty. Without regulation, nobody knows whether it's safe to spend or invest a million dollars in a facility or whatever only to find out the next week that regulation is going to shut you down. There will be a huge manufacturing boom, I think, in Australia, if regulations allow it.

In terms of the liquid that goes into these devices: quite a lot of the liquid sold in Australia is made in Australia, because it's an easy process. There is very little barrier to entry to making e-liquid. There are three primary ingredients, which are: food flavouring, propylene glycol and vegetable glycerine. All three of those ingredients are on the FDA's generally-regarded-as-safe list, and, in the case of propylene glycol, it has been used in asthma nebulisers and Nicorette inhalers for the last 50 years. Access to those products is easy, so anybody can start mixing—

Mr ZAPPIA: So, as to the liquid, you are saying that some of it is made in Australia?

Mr Dimitriou : Yes.

Mr ZAPPIA: I assume it's made legally?

Mr Dimitriou : The majority that's sold here is certainly made in Australia. It's an interesting question when you say 'legally'. The product, at least when it's sold legitimately, doesn't have nicotine in it. As I said, there are certainly cowboys who will sell nicotine liquid. None of our member stores do. That liquid is literally just food flavouring. It is chemically identical to the food flavouring that you buy from Woolworths or Coles that you put in your cake. So there's no reasonable way that you can turn e-liquid without nicotine into a prohibited product. It's insane, because quite literally you could walk into Coles, get some Queen food flavouring and pour it into your e-cigarette and it would be the same experience—though maybe it wouldn't taste as good—as vaping any other e-liquid made in Australia. So there is plenty of it made here. The big question is: is it being mixed in a sanitary environment? One of the big pushers that AVATAR has is that, if you are a juicemaker in this country and you want to join AVATAR, there is a list of minimum requirements that you have to demonstrate that you're producing your product safely. You need to be using sanitised bottles. You need to be mixing in a commercial kitchen or better. You need to be mixing in a certified environment—it has to be certified or ISO 9001—to make sure that the liquids that you are producing aren't going to cause any problems for people. Again, we'd love to see all of this enshrined in law but, until there is regulation, we'll self-regulate. We'll make sure that that happens.

Mr ZAPPIA: Is the production of that liquid controlled in any way under health regulations, state health regulations, or by the TGA?

Mr Dimitriou : Again, who knows, because nobody has really challenged it. We just do not have the level of knowledge. We think, yes, it should be. In fact, when you think about it, it is the production of a food product. That is the manner in which we treat it. So, the same kind of regulations that exist for producing a food flavouring that would go into a cake are the regulations that AVATAR says you have to follow if you are going to produce e-liquids.

CHAIR: What you are saying is that there is not any regulation at the moment?

Mr Dimitriou : No, but there absolutely should be. It is so important that you understand the process by which it happens and actually see on the ground how it is happening, before you write any regulations. Otherwise you end up regulating around the margins and people will just slip through.

Mr TIM WILSON: How do you feel about licensing arrangements for retailers, particularly in light of the issue around education, which you yourself have said you think might be necessary?

Mr Dimitriou : This is something we asked for in South Australia. We propose that a separate license class be created for vape stores, basically—separate and distinct from a tobacco licence. We said at the time that we have no problem really with refusing dual licences. So, if you sell tobacco products you cannot sell e-cigs, and if you sell e-cigs you cannot sell tobacco. We have no great problem with it. We would prefer that did not happen, because we want tobacconists to be able to sell electronic cigarettes, because we think people will stop smoking if they are in that environment. But it was dependent on what the government wanted. We certainly are not opposed to licences. In fact, we think it would be beneficial to have licences available relatively cheaply: not done in the same way as tobacco, where you have a very limited supply of those licences and there are a lot of hoops to jump through, but just so that you can keep track of it. Keep the barrier to entry relatively low so that people will do it, and apply for a licence, and then keep track of who is signing up on how things are being produced. Have at least a minimum set of requirements for doing that safely, including the training stuff.

If you make that barrier too high, people will just slip under it. People will just ignore the law and continue to supply it. Certainly, international lenders have no problem with shipping into Australia. They have no regard whatsoever for any laws that exist here.

CHAIR: Regarding the proposition that nicotine-based liquid could be sold in Australia but only on the basis of a doctor's prescription, in the same way that nicotine replacement therapies at first were, before they became more broadly available, how do you think that would work?

Mr Dimitriou : Not at all. I don't think it would work at all. For that process to happen you will need to go through the TGA in order for doctors to sign-off and all that sort of stuff. Straight away, you've killed the domestic market completely. Nobody in Australia who makes juice is going to go through that process. What will happen is that you will get vendors just moving to New Zealand and start shipping into New Zealand, which has already happened. There is a big proliferation of stores in New Zealand now that exist only to ship to Australia. That happened pretty much right away. As soon as regulations started to come down in places like Western Australia, that is what started happening. I think there should be regulation, but it should not be done on that particular way.

You might be interested to learn, and in fact the guy from the AMA might be interested to learn, that the AMA membership does not necessarily agree with him. A very big percentage of our customers are doctors and people referred by their doctors, so doctors are already recommending that people take up of vaping. That is already happening to customers who are coming into our member stores.

CHAIR: Thank you for your time this afternoon. You will be given a Hansard transcript of today's proceedings. If there are any corrections you would like to make, please notify the committee secretariat. Thank you for your time today.

Mr Dimitriou : Thank you very much.