How vaping has helped the economy in the UK

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In September 2022, a report from the Centre of Economics and Business Research (Cebr) was commissioned by the United Kingdom Vaping Industry Association (UKVIA) asking them to detail the economic contribution to the United Kingdom by the Vaping industry.

This report looked into and gave report in great detail of the economic contributions that vaping directly has had, as well as the wider spread economic footprint through indirect methods, such as the supply chain as well as spending behaviours by looking at things at a regional level. And finally, the report then looks at the impact that Vaping has had, and is continuing to have on the NHS.

This report is something that has not been seen before, and gives a fascinating insight into the contributions vaping is having across all the above mentioned. In this article, I’m going to break the article down into an abridged summary (as the Cebr report is 61 pages long, not a light read) and give my views on the report alongside the statistics. Let’s take a look.

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Direct Economic Contributions by vaping

Starting off the report, Cebr look at the direct economic contributions that vaping had in the year 2021.

As the above graphic shows, turnover stood at a whopping £1.3 Billion for the year 2021, with a Gross Added Value of £401 million. This is great to see and shows what a huge contribution that vaping has had to the economy here in the UK. The report states that these figures have grown between 2017-2021, with turnover increasing by £251 million during this period, a growth percentage of 23.4%. And Gross Added Value had increased by £122 million, a 44% increase.

What the report does highlight is that the Turnover value did decrease in 2019 from £1.3 billion to £1.24 billion, with it widely believed that the EVALI outbreak crisis which cast a very dark shadow over the vaping industry played a part in this, with more people opting to quit or not start vaping after reading the papers. EVALI was then proven to be caused by Vitamin E Acetate that was included in illegal THC containing vape cartridges, and not in the usual run of the mill vaping products.

However, despite the numbers being high, employment of Full Time Employees (FTE) as well as compensation had declined from previous years. Cebr says that over the 4 year span mentioned above, employment rates had risen by 11.6% to 9673, but then saw quite a dip in volume, with the total number being 8215 in 2021.

The report makes a suggestion which I believe has some weight behind it, with the fact that more supermarkets and convenience stores are now stocking a healthy variety of vaping products, and consumers are now opting to shop there as an “all in one” experience, rather than going to a stand alone vape shop to get their vaping supplies. Sad to see, but a harsh reality. And of course, the COVID pandemic didn’t help matters, with a lot of businesses succumbing to the crushing financial problems that it caused.

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Aggregate economic footprint

The report goes on to talk about the aggregate economic footprint that Vaping has had with it’s contributions; 

  • For every £10 of turnover generated by the UK vaping industry, a further £11.16 worth of turnover is supported in the wider economy.
  • For every £10 of GVA directly generated by the UK vaping industry, a further £13.39 of GVA is supported in the wider economy.
  • For every 10 jobs directly generated by the UK vaping industry, a further 11.6 jobs are supported in the economy.
  • For every £10 in employee compensation paid by the UK vaping industry, a further £11.1 worth of compensation is supported in the wider economy.

It’s quite interesting to see the somewhat “ripple” effect that vaping has on the bigger picture of the economy, with the numbers increasing quite a lot due to the direct impact vaping has had, which is really good to see. I didn’t quite understand all of this prior to reading the article, but I think you’ll agree this explains it quite simply and breaks it down to understand easier.

Regional Economic Footprint

We move on to look at the regional economic footprint that vaping has had across the UK. The report starts by looking at the number of stand alone vape stores currently operating in the UK at the time of this report being compiled. In 2017, there was 2,281 vape shops operating in the UK which increased to 3,644 in 2020, which is just shy of a 50% increase over the 4 years, brilliant to see more shops operating and succeeding in the market.

They show a table which looks at the different regions of the UK, and how much contribution each region had to the economy year on year from 2017 to 2020, which you can see below;

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I find it interesting that the South West remained top from 2017-2018, before the South East then caught up and took over from 2019 and 2020. What is also interesting is that the volume of physical vape shops was the highest in these areas att he time they were top of the turnover table.

As you can see, London holds the biggest increase in turnover across the 4 year span, growing from £79 million to £165 million which is a 104% increase! Absolutely crazy statistics to read when it’s put out in front of me.

The GVA contributions by region

As you probably would suspect, the South East had the largest GVA total across the 4 years, and by quite some way as well when compared to the others. Spanning from £39 million in 2017, right up to £72 million in 2020.

But what is interesting is the highest volume percentage of growth actually belongs to the North East, which started at £21 million in 2017, and reached £54 million in 2020. This equates to a growth of 156%! Scotland also had an increase of 139% growth of GVA over the 4 year period that’s reported on.

The table below documents everything by region for you to see;

figure4 | Vape69

Employment in the Vaping Industry by region

This is where it gets quite interesting, as the report breaks down the Employment rates by region and the region that is top for employment may come as a surprise for you, as it did me.

Scotland employed the most people within the Vaping industry in 2020, increasing the rate of employment value from £789 million in 2017, to £1.3 billion in 2020. An increase of 70% across the 4 years. The South East had previously held the throne as the biggest contributors, but was then taken over in 2020 by Scotland.

The lowest contributors are Northern Ireland, which were responsible for only £261 million in 2020, a decrease for the £283 million first reported in 2017. This could be widely down to the fact hat Vaping is not supported over there, like it is here. With the rumours of a potential vape juice flavour ban incoming in the country, it’s no wonder the employment figures are not that high.

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Wider Socio-Economic spill over benefits of Vaping

We conclude this article, with the conclusion segment of the Cebr report, and that is taking a look at the wider socio-economic benefits that vaping has had in the country.

This is looking at the reduction in healthcare costs associated with smokers making the switch from smoking to vaping, therefore not costing the NHS money for treatments of smoking related diseases. The total increase in productivity associated with workers choosing to switch to vaping, and the consumer behaviours of vapers using an e-cigarette as a smoking cessation tool.

Healthcare

We all know that smoking is one of the biggest contributors for serious health conditions, such as heart attacks, strokes, irreversible lung damage and the most deadly disease; cancer. It’s reported that a total of 64% of deaths of current smokers in the UK were attributable to cigarette smoking. And 28% of deaths were ex-smokers. Did you know smoking causes seven out of every ten cases of lung cancer? And obviously whilst we do not pay for our healthcare, this doesn’t mean it’s not causing the NHS billions a year treating these diseases.

Public Health England declared back in 2015 that smoking is costing the NHS almost £2.6 billion in primary costs, which include GP visits as well as secondary costs such as hospital admissions and treatments during admissions. Action on Smoking and Health updated this research in 2018, which found the costs had gone down slightly to £2.4 billion, which probably is constituted by the amount of smokers reducing down in the UK.

The cost saving if more people made the switch

Cebr then go on to create a scenario where they make out that the vapers who have made the switch from smoking to vaping, never actually did make the switch to see what impact it would have, and the results are fascinating.

They also go on to create a table looking at the amount of money that would be saved if 1%, 10% and 50% of smokers accounted for in 2020 decided to quit smoking and make the change, and the amounts are astronomical! See the table below for all the statistics;

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Ash Table 10 | Vape69

Productivity increase associated with people switching to vaping from smoking

The report then takes a look at the impact in productivity that smoking has to employers and work places. Due to the high volume of deaths associated with smoking (64%) this can have somewhat of a ripple effect on things including the workplace. People could be absent from work for health reasons due to smoking, hospital visits, doctors visits etc, and it comes at a cost to employers.

Smoking also decreases productivity hours too, by employees going out for frequent smoking breaks during work hours. Whilst all employers have to offer an official break of a set time, it’s quite common for workers to sneak out for additional breaks when they should be working so they can have a cigarette. It’s estimated that smokers will take an additional 40 minutes of smoke breaks every day during their working hours, on top of their allocated break times, which is staggering to read. What is interesting is that vapers who step outside for vaping breaks take significantly less time than smokers to get their nicotine fix, as only a few puffs on a vape can be substantial enough compared to the prolonged period of smoking a cigarette, excluding the time it may take to prepare the cigarette if they smoke hand rolled cigarettes.

Some workplaces are even becoming “vape friendly” environments to encourage smokers to make the switch, and allowing the use of small devices being used within the work place, to encourage workers to make a healthy switch, as well as continuing to work and not interrupt the working day by frequently going out for a cigarette.

Conclusion

As I’ve mentioned numerous times, this report carried out by Cebr for the UKVIA is an absolutely fascinating read, and I hope you have enjoyed reading my report on it, highlighting the key areas. I think we will see a continued growth on all areas like what has been happening over the last few years as the vaping industry seems to continue going from strength to strength.

You can read the report by Cebr in the entirety by clicking this link

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