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  • NEWS

UK Vaping Industry’s First Ever Economic Impact Report Published

Report Overview

● This is a report by the Centre for Economics and Business Research (Cebr), on behalf of the United Kingdom Vaping Industry Association (UKVIA) detailing the economic contribution of the vaping industry.

● The report considers the direct economic contributions made as well as the wider economic footprint supported through indirect (supply-chain) and induced (wider-spending) impact layers. Within our analysis, we consider these impacts both at national and regional level.

● The report then considers the wider socio-economic spillover benefits associated with the vaping industry. Specifically, it considers the economic benefit of ex-smokers switching to vaping in accordance with current rates of switching and the associated cost to the NHS. The current cost of smoking to the NHS is estimated to be around £2.6 billion in 2015. Finally, we have supplemented the analysis with a bespoke survey, capturing the trends in vaping over the years.


● The analysis presented in this report relied on data from Bureau Van Dijk, a data provider that provides financial information on companies across the United Kingdom (UK), broken down by Standard Industrial Classification (SIC) code. SIC codes categorise the industries that companies belong to based on their business activities. As such, the vaping sector falls into SIC code 47260 – Retail sale of tobacco products in specialized stores. Following this, we downloaded company financial data relating to SIC 47260 and filtered for vaping companies, using a range of filters. The filters enabled us to specifically identify vape shops across the UK, as the SIC code provides financial data on all companies that fall into the retail of tobacco products. This is further explained in the methodology section of the report.

● Additionally, to provide more granular regional data points, we gathered data from the Local Data Company, to map the location of the stores to UK regions. This, in tandem with data from our survey on the consumption patterns of vapers within different regions, was used to estimate the regional distribution of economic impacts.

● Finally, to supplement the analysis above, we undertook a bespoke vaping survey to understand the various trends across the vaping industry over the last few years, ranging from consumption on vaping products to the reasons for consumers switching from smoking to vaping.

Direct economic contributions

In 2021, it is estimated that the vaping industry directly contributed:
Direct impacts, 2021
Turnover: £1,325m
Gross Value Added: £401m
Employment: 8,215 FTE jobs
Employee Compensation: £154m

● The turnover and gross value added (GVA) contributed by the vaping industry have both increased over the period from 2017 to 2021. However, employment and compensation of employees declined over the same period.

● In absolute terms, turnover grew by £251 million over the 2017 to 2021 period, amounting to a 23.4% growth rate. GVA contributed by the vaping industry grew in absolute terms by £122 million over the 2017 to 2021 period. This amounts to a 44% growth in GVA over the period.

● Full-time equivalent employment fluctuated between approximately 8,200 and 9,700 over the period. This increased from 8,669 in 2017 to 9,673 in 2020; equivalent to a 11.6% increase over the period. However, employment declined in 2021, in line with a slight decline in turnover and GVA, to 8,215. The decline in employment may have resulted from consumers switching preferences, from purchasing vape products in vape stores to other avenues that sell vape products such as newsagents and supermarkets. This is further supported by analyzing the turnover to employment ratio for vape shops and comparing it to newsagents and supermarkets. The turnover to employment ratio is approximately double for newsagents and supermarkets compared to vape shops. As individuals' preferences changed to newsagents and supermarkets, this may have resulted in the decline in employment. Additionally, as COVID-19 support for businesses ended in 2021, this may have further contributed to the decline in employment.

● The contribution to the Exchequer through tax revenues was £310 million in 2021.

Post time: Mar-29-2023