LONDON, U.K.: The U.S. Postal Service has begun blocking business shipments of unregulated vaping products from at least one major distributor, stepping up enforcement against an industry already facing mounting legal and regulatory pressure.

Letters reviewed by Reuters show USPS revoked the mailing exception for Demand Vape, a New York-based distributor, after New York City's Law Department provided evidence the company had shipped products without required U.S. Food and Drug Administration (FDA) authorisation and in violation of a local flavour ban.

The July 15 letter informed Demand Vape that its local Buffalo Business Mail Entry office would no longer accept packages containing electronic nicotine delivery systems.

The move is expected to benefit tobacco giants like Altria and British American Tobacco, which have long fought the sale of unauthorised vapes, most of which originate from China. While the FDA has authorised just 39 e-cigarette products, the U.S. market remains flooded with unauthorised devices.

Demand Vape said it complies with the law and is contesting the revocation. "We reject any characterisation that paints Demand Vape as anything other than a transparent, lawful and reputable business," it said, describing the industry as operating in a "regulatory grey zone" with few authorised products meeting consumer demand.

USPS did not respond to a request for comment.

Since 2021, USPS has been barred from mailing vaping products directly to consumers internationally and in most other cases. Exceptions exist for domestic shipments between businesses, but these require a special "mailing exception" and compliance with all relevant laws. Other major carriers have similarly restricted service; FedEx does not ship vapes at all, and DHL only accepts approved business shipments.

USPS has also provided New York City's Law Department with a list of other companies holding mailing exceptions so the city can review whether they are complying with the law, Eric Proshansky, deputy chief of the division of affirmative litigation, told Reuters. This could further reduce shipping options for the unauthorised vape trade, forcing reliance on smaller, more expensive carriers.

British American Tobacco estimates the unauthorised U.S. vape market was worth about £6 billion (US$8.05 billion) last year. However, that market has been hit by a combination of new tariffs, seizures at U.S. ports, and a May crackdown in which the FDA sent warning letters to 24 distributors central to the supply chain.

The actions have left many vape store shelves empty, according to Tony Abboud, executive director of the Vapor Technology Association, whose members include Demand Vape. He said the USPS ban will deal another blow to the sector.

Court filings in a New York City lawsuit show that Demand Vape, one of the largest U.S. e-cigarette distributors, sells to roughly 5,000 retailers in 49 states. Evidence supplied by city attorneys to USPS included invoices documenting sales of unauthorised e-cigarettes, including brands the FDA has explicitly named as illegal.