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UKVIA-commissioned report highlights UK vape industry’s contributions to the national and regional economies, the jobs it creates, the cost savings to the NHS and more…

  • 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

The UK’s fast-growing vaping sector is officially a multi-billion-pound industry supporting jobs for nearly 18,000 full-time equivalent workers and raking in hundreds of millions for the exchequer.

Meanwhile the cost savings to the NHS of adult smokers switching to vaping is circa a third of a billion pounds – a figure estimated to more than double if 50% of UK smokers switched to vaping.

Those are just two key findings of the first ever study measuring the impact vaping has on the UK’s economy.

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.”


Notes to editors:

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 to the UK economy using key macroeconomic indicators such as turnover, Gross Value Added (GVA), employment and employee compensation.

The vaping industry, particularly standalone vape shops, has seen significant growth in recent years. Between 2017 and 2020, the number of vape shops in the United Kingdom (UK) has increased from 2,280 to close to 3,650, approximately a 61% increase. This trend is also mirrored by the number of vapers in the UK.

Report overview

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 the analysis, it considers 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, the analysis has been supplemented with a bespoke survey, capturing the trends in vaping over the years.

The research seeks to estimate the economic impact of the UK’s vaping industry. Specifically, we estimate the economic contribution of the vaping industry, defined as incorporating the following:

  • Vaping retailers
  • Other retailers, who sell vaping products (e.g. supermarkets or pharmacies)
  • Wholesalers selling vaping products
  • Vaping manufacturers

In addition, the report examines the indirect contributions made by the vaping industry to the wider economy through the wider supply chain and the additional economic activity supported through employee spending. It also considers the wider spillover impacts of the vaping industry, including the impact on ex-smokers switching from smoking to vaping and the health benefits associated with the switch.

Regional economic footprint

The total number of vape shops across the UK has increased approximately from 2,281 in 2017 to 3,644 in 2020. From a regional perspective, the North West had the highest number of vape shops in each of the years from 2017 to 2020, increasing from 381 in 2017 to 573 in 2020, a rise of approximately 50%.

The direct regional impacts contributed by the UK vaping industry:

  • The region with the highest level of GVA generated by the vaping industry was the South East in 2020 at £72 million. The region with the lowest level of GVA was the South West at £12 million. The region which saw the highest GVA growth over the 2017 to 2020 period was the North East at 156%.
  • The vaping industry directly employed the most people in 2020 in Scotland at 1,341 which also grew the most (in absolute terms) over the 2017 to 2020 period at 70%. The region which had the least employees was Northern Ireland at 261.
  • The highest levels of turnover and employee compensation were also supported in the South East.

Read the full report here: Economic impact assessment of the vaping industry.

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