UK Report Reveals Flourishing Industry
First ever report into vaping’s impact on UK economy reveals flourishing multi-billion-pound industry
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by Dave Cross
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The report details the economic contribution of the vaping industry to the UK economy using key macroeconomic indicators such as turnover, Gross Value Added (GVA), employment and employee compensation.
- Leading research organisation underlines vaping’s true economic value
- Industry’s aggregate turnover valued at £2.8bn last year as record numbers of smokers switch to vaping
- Study reveals the sector supports almost 18,000 full time equivalent jobs in retail, manufacturing and supply chain
- Estimated cost saving to NHS of smokers switching to vaping was over £300m in 2019 alone
Whilst the High Street has generally suffered in recent years, vape retail stores have bucked the trend and represent one of the biggest growing sectors since the Noughties when they started to appear for the first time.
The report, compiled by the Centre for Economics and Business Research (Cebr), looked at vaping’s direct economic contributions as well as its broader footprint, taking into account factors such as supply chains and wider spending facilitated by the industry.
As a whole turnover within the UK vape sector grew by 23.4% from 2017 to 2021, an increase of £251m, and stood at £1.325bn last year alone. When indirect economic benefits such as supply chain support and the spending power of vape sector workers is factored in the economic impact more than doubles to £2.8bn.
The number of people directly and indirectly employed in the vape sector - such as those employed elsewhere in the supply chain – was 17,700 in 2021.
The contribution vaping made to the Exchequer through taxation was £310m in 2021.
The vaping sector has also had wider socio-economic benefits, most notably the positive impact it has had on the health economy. Cebr’s report estimates that the total saving in healthcare costs associated with smokers switching to using vaping products was £322m in 2019. The research organisation goes on to say that “the potential healthcare saving if 50% of all smokers switched to vaping” would have been £698m in 2020.
The gain in “economic productivity” associated with smokers switching to using vaping products was estimated to be £1.3bn in 2019, which, according to the study, would increase to £3.33bn if 50% of remaining UK smokers switched to vaping.
Owen Good, Head of Economic Advisory at Cebr, said: “The findings of the vaping industry’s first ever economic impact report demonstrates its significant success as a fast-growing disruptive sector.
“Whilst many high street retailers have suffered in recent years, the vaping sector has bucked the trend, with significant growth both in-store and online. Even the effects of the pandemic have not significantly hampered the sector’s growth.
“The sector’s growth has been hugely beneficial to the UK economy; businesses and their employees directly involved in the industry and those running operations across the wider supply chain; and the NHS which has seen a massive cost saving with increasing numbers of smokers switching to vaping in order to quit their habits.”
John Dunne, Director General of the UK Vaping Industry Association, which commissioned the study, added: “In little over a decade vaping in the UK has grown from very much a ‘cottage industry’ to one of the fastest growing sectors in not just retail, but the whole economy.
“More people than ever are vaping and by all measures this is a true British success story, creating employment and wealth, generating precious revenue for the Government through taxation while at the same time saving the NHS more than £300m a year through people switching from smoking to vaping.
“No wonder some of the world’s biggest retail brands are now extolling the virtues of vaping as they know how valuable it is both as a commodity and as a force for good when it comes to harm reduction.
“However, it is the specialist vape retailers and manufacturers who have led the way in forging this path, turning vaping into the economic powerhouse it is today as underlined by this important report.”
He added: “For some time now we have known that vaping supports smokers to turn their lives and health around by quitting for good, but now we know just how far this industry has come and what a massive impact it has had – and continues to have – on the health and wellbeing of the economy too.”
References:
- Centre for Economics and Business Research report - https://www.ukvia.co.uk/wp-content/uploads/2022/11/Cebr_Report_06092022-clean.pdf
Photo Credit:
Photo by Nick Fewings on Unsplash
Dave Cross
Journalist at POTVDave is a freelance writer; with articles on music, motorbikes, football, pop-science, vaping and tobacco harm reduction in Sounds, Melody Maker, UBG, AWoL, Bike, When Saturday Comes, Vape News Magazine, and syndicated across the Johnston Press group. He was published in an anthology of “Greatest Football Writing”, but still believes this was a mistake. Dave contributes sketches to comedy shows and used to co-host a radio sketch show. He’s worked with numerous start-ups to develop content for their websites.
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