Background:
Understanding the internal structures of the tobacco industry is vital in the development of effective tobacco policy. Currently, little is known about the waterpipe tobacco industry. We aimed to understand more about product development, marketing methods, compliance with legislation and features of the waterpipe tobacco industry.

Methods:
We attended two annual waterpipe tobacco industry exhibitions held in Frankfurt, Germany, in 2014 and 2015. We collected information on the types of products on display, analysed marketing material, assessed compliance with health warning and labelling requirements, and questioned exhibitors to gather information about the features of the industry, including supply chains, cross-industry collaborations, customer loyalty, and lobby group membership.

Results:
Despite its presentation as a waterpipe trade exhibition, the fair was dominated by electronic cigarette (e-cigarette) companies and e-cigarette-like technology in waterpipe apparatuses. Waterpipe tobacco companies appeared distinct from those marketing e-cigarette-like waterpipe products. Marketing material across waterpipe tobacco products and accessories included claims of reduced harm (compared to cigarette smoking), safety, and quality. None of the 15 tobacco products collected complied with health warning and labelling requirements of FCTC Article 11, and over half of charcoal products contained misleading descriptors of safety and quality. Discussions with exhibitors identified a globalised but decentralised and industry with growing ties to transnational tobacco companies. Most waterpipe tobacco companies are family-run businesses with an absence of strategic partnerships such as lobby group membership. Deliberate breaches of tobacco policy, such as the use of high levels of glycerine in the tobacco manufacturing process, were confirmed by company representatives.

Conclusions:
Our observations add insight into key features of the waterpipe tobacco industry and can guide policy dialogue. We call for a waterpipe-specific policy framework to address unique aspects of the industry and the regulatory challenges it poses.