In The King’s Speech this week, His Majesty King Charles III outlined the government’s new approach to cracking down on smoking and vaping which could be bad news for specialty vape shops and others that have made a big investment in vapes and vaping accessories.
The proposed Tobacco and Vapes Bill will aim to clamp down on smoking and vaping amongst under 16s.
His Majesty said: “My government will introduce legislation to create a smoke-free generation by restricting the sale of tobacco so that children currently aged fourteen or younger can never be sold cigarettes, and to restrict the sale and marketing of e-cigarettes to children.”
The text of the speech goes into more detail about the proposed crackdown on youth vaping. It says that the government is looking at new regulations to reduce the appeal and availability of vapes to children – while ensuring that vapes remain available for adult smokers to quit.
An eight-week consultation was launched in October testing proposals including:-
- Restricting the flavours and descriptions of vapes so they are no longer targeted at children
- Regulating point of sale displays so that vapes are kept out of sight of children
- Regulating vape packaging and product presentation
- Ensuring that neither are targeted to children
- Closing loopholes in the law which allow children to get free samples and buy non-nicotine vapes
- Considering measures to restrict the sale and supply of disposable vapes including considering prohibiting their sale
- Action on the affordability of vapes including exploring a new duty on vapes as other countries have done while ensuring their is a significant differential between duty on vapes and tobacco products
Hazel Cheeseman, Deputy Chief Executive of health charity ASH, said: “Vapes have been a valuable aid to help smokers quit but vaping has been growing among teens.
“Further regulations are needed to ensure products are not promoted or sold to teens. In addition, we’d welcome a further duty on disposable vapes to reduce their affordability for teenages while ensuring they remain cheaper than lethal tobacco products.”
There are over 4 million vapers in the UK with the vaping market currently worth around £1.2 billion with around 35% of sales taking place in traditional retail shops.
Disposable vapes are overwhelmingly the most popular product accounting for 83% of all vape sales in 2022 with sales in this segment alone rising from £141 million in 2021 to £973 million in 2022.
It’s estimated that there are 2,900 specialist vape shops in the country making it Europe’s largest market and the second largest in the world behind the USA. This figure does not include newsagents or other stores that sell vapes among other products.
The government’s hand has been forced as it has committed to making the country smoke free from 2030 and the latest trends for young people experimenting with vaping are alarming.
In 2022, 15.8% of 11-17 year olds and a third of 16/17 year olds had tried vaping, up from 11.2% in 2021. Also almost half (46.5%) of 11-17 year olds bought their vape products from shops – despite sales to under 18s being banned.
Trading standards have seen complaints about illegal vape sales rise from dozens to hundreds a month and have seized thousands of counterfeit and unregulated products but their resources are limited and can’t follow up every tip off.
So what does the outlook look like for vape shops?
There are several reasons why retailers that sell vapes and vaping accessories could be uncomfortable for the rest of 2023 and into 2024.
- Local trading standards taking an interest
In April 2023 the Health Minister Neil O’Brien announced a new ‘illicit vapes enforcement squad’ – backed by £3 million of government funding – to enforce the rules on vaping and tackle illicit vapes and underage sales.
Although it is beneficial to remove illegal vape shops it also puts more pressure on those businesses who are compliant with the law. Trading standards are meticulous with their investigations which can result in more work for law abiding businesses such as paperwork, more time on Challenge 25 training and longer interactions with customers.
- New research
E-Cigarettes were originally introduced with the attempt to support smokers in quitting and has been proven to be effective. According to the Office for National Statistics, the level of smoking in the UK in 2022 was the lowest it had been since 2011.
However, they were not intended for usage by non-smokers or as a long-term alternative for cigarettes.As more research comes forward about the side effects of vaping the less appeal it has to consumers.
A new study carried out among adults who have used e-cigarettes and quit or attempted to, showed about 42% of participants reported quitting due to health concerns.
- Saturated market
The purchasing of E-cigarettes and vapes has become more readily available over the years. Customers no longer have to rely on vape stores to get their fix with local supermarkets, corner shops, online retailers and club toilets all offering them.
The announcement of the new measures coming in will cause a massive strain on existing retailers more and more until it becomes unprofitable. However unlike traditional vape shops these businesses are not solely reliant on the sale of vapes to keep their business running.
What can they do about it?
If you’re a business that is specialised in vapes and are concerned about the future of your business following the King’s announcements, it may be time to consider what options are available to you.
One route you may choose is an administration. This will buy your business time while you figure out work out what your next steps are and if you can turn things around.
Alternatively you may choose to quit while you’re ahead and start a new adventure ready for 2024 by opting for a liquidation.
If you have had a successful few years and your company is solvent you may opt for a Members Voluntary Liquidation (MVL). Alternatively if the past few years haven’t been too kind to your business and you are insolvent your best option is a Creditors Voluntary Liquidation (CVL).
It is important that if you are a business that specialises in e cigarettes and vaping products to get all your ducks in a row now before it is too late.
We offer a free initial consultation for any business owner or director who would like to better understand what tools are available to them if they would like to make changes before change is forced on them externally.