• June 19, 2024

Vape Sector Boosts U.K. Economy: Report

 Vape Sector Boosts U.K. Economy: Report
Photo: VPZ

The vape industry has had a considerable positive impact on the U.K. economy, according to a new report compiled by the Centre for Economics and Business Research (CEBR) on behalf of the U.K. Vaping Industry Association (UKVIA).

Valued at £2.8 billion ($3.36 billion) in 2021, the U.K. vape sector supports almost 18,000 full-time-equivalent jobs in retail, manufacturing and supply chain. What’s more, smokers abandoning cigarettes in favor of less harmful e-cigarettes have saved the National Health Service (NHS) more than £300 million in 2019 alone, according to the report.

Even as many businesses suffered in recent years, vape retail stores have bucked the trend and represent one of the biggest growing sectors since the first decade of the 21st century when they started to appear for the first time.

From 2017 to 2021, the U.K. vape sector’s turnover grew by 23.4 percent to £1.33 billion 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.

In 2021, the vaping industry paid £310 million in taxes to the British exchequer.

CEBR estimates that the vaping sector saved the U.K. £322 million in smoking-related healthcare costs in 2019. The research organization reckons that if 50 percent of smokers switched to vaping, the potential healthcare savings would have been £698 million in 2020.

Meanwhile, the gain in economic productivity associated with smokers switching to using vaping products was estimated to be £1.3 billion in 2019. If 50 percent of remaining U.K. smokers switched to vaping, this would increase to £3.33 billion, according to the study.

"In little over a decade, vaping in the U.K. has grown from very much a ‘cottage industry’ to one of the fastest growing sectors in not just retail but the whole economy."

John Dunne, director general, UKVIA

“The findings of the vaping industry’s first ever economic impact report demonstrates its significant success as a fast-growing disruptive sector,” says Owen Good, head of economic advisory at CEBR.

“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 U.K. 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.”

“In little over a decade, vaping in the U.K. has grown from very much a ‘cottage industry’ to one of the fastest growing sectors in not just retail but the whole economy,” said UKVIA Director General John Dunne in a statement.

“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 £300 million a year through people switching from smoking to vaping.”