More than half of vape retailers plan to cut or overhaul their ranges as a new duty nearly doubles the price of some e-liquids from tomorrow.
From 1 October, duty of £2.20 per 10ml will apply to vaping liquids, whether they include nicotine or not. Including VAT, it means a £2.95 10ml bottle of e-liquid will rise to £5.59.
Shops can sell unstamped inventory they already have until 31 March 2027 during a transitional period, and from 1 April 2027 must only sell products with a duty stamp.
A survey of 200 convenience store owners and managers by Lumina Intelligence found 52% plan to streamline, change or stock fewer vape products as a result of the duty hike. Only 23% don’t anticipate any changes, while 22% are not sure if or how their range will change.
One-third expected that consumers would switch to cheaper vape brands, 13.5% that they would stock up while products were cheaper, and 10.5% that customers would buy less overall.
A parallel survey of 1,000 consumers found almost two-thirds didn’t know or knew very little about imminent tax rises. Lumina warned of a “high risk of severe pushback among consumers when prices increase” and called on suppliers and wholesalers to help inform consumers about the changes.
Nic Mynott, commercial lead at Lumina Intelligence, said: “The introduction of vaping products duty is expected to accelerate a rationalisation of the category at retail. Our research shows over half of convenience retailers anticipate streamlining their vape ranges, changing the products they stock or reducing the number of SKUs available. At the same time, retailers expect consumers to become increasingly price-sensitive, with many anticipating a shift towards cheaper vape brands.
“This creates a challenging environment for both retailers and manufacturers, making it more important than ever to support ranging decisions with robust data, clear category guidance and strong value propositions.”
Separate research commissioned by the UK Vaping Industry Association (UKVIA) also found that almost half of vapers had no idea the new duty was being introduced. It warned that half of respondents would return to smoking or turn to the black market once the duty comes into force – equivalent to around 2.5 million adults based on the UK vaping population. Only one in 10 said their vaping habits would be unaffected, while two-thirds predicted the duty would put off adult smokers from making the switch.
The UKVIA research also found that average reported weekly e-liquid consumption was 24ml – more than twice the 11.9ml estimate used by HMRC in its modelling for the duty. The disparity was evidence that the Treasury could achieve its intended revenue at a lower duty rate, the UKVIA claimed.
UKVIA director general John Dunne said: “The government says the duty will help reduce the appeal of vaping to young people while preserving the financial incentive for smokers to switch, with the money raised also intended to support the NHS. But if the result is more adults returning to smoking and a greater burden on the health service from smoking-related illness, that is completely at odds with what this policy is trying to achieve.”
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