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Vape Industry Licensing Scheme Could Generate £50M+ Per Year to Combat Underage and Illicit Vape Sales

By Oliver Smith 23rd February 2024 7 Mins


A first-of-its kind licensing framework for the UK vape industry has been unveiled in Parliament, just days after a new investigation revealed a near 20-fold increase in the number of illicit vapes seized by councils across the UK since 2020.

The FOI research found more than 1.5 million illegal vapes were confiscated between 152 surveyed councils last year alone, with industry experts warning that, unless an effective enforcement strategy is put in place, this figure could ‘spiral even further out of control’ under newly announced plans to ban disposable vapes.

The shocking data comes days before a new industry-led mandatory vape retailer and distributor licensing scheme was put forward to parliamentarians, which will allow Trading Standards to get tough on retailers guilty of underage and illicit vape sales.

It is estimated that the proposed scheme could generate upwards of £50 million per year for enhanced enforcement.

The framework follows a comprehensive consultation period over the last six months involving leading figures representing the retail industry, trade bodies, regulatory landscape and consumer groups.

It also follows a number of MPs publicly expressing support for the idea of a vape licensing or registration scheme including Peter Gibson MP, Jim Shannon MP, Mary Kelly Foy MP, Mark Eastwood MP and Dr Caroline Johnson MP.

Currently, no such system for the vaping industry exists in the UK, meaning anyone, whether specialist store, off-licence, takeaway, sweet shop, taxi driver or wholesaler, has free-rein to sell vaping products.

It also means those retailers and distributors who wrongfully sell vapes to minors and stock illicit goods can more easily stay under the radar of regulators and Trading Standards.

Deborah Arnott, Chief Executive of leading public health charity Action on Smoking and Health UK recently warned that illegal vapes are ‘already flooding the market’ and that ‘strict enforcement’ is required for a disposable ban to be effective.

Industry figures and leading retailers have said that a fit-for-purpose licensing scheme is key to ensuring any current and future legislation – including the newly announced disposable ban – can be effectively enforced.

They warned that Trading Standards is already struggling to tackle the black market and that the government’s decision to outlaw an entire category of products will stretch already thinly-spread enforcement officers even further by ‘turbo-charging’ the issue.

As well as a self-sustaining fee structure, the proposed scheme also includes a governance and robust oversight mechanisms and stringent criteria which businesses would need to meet before qualifying for a licence.

It also outlines a fine and penalty system for those who breach the terms of the licence and the conditions under which a licence can and should be revoked which – in some cases – could see businesses shut down when they are found to be guilty of flouting the law.

It includes a model for wholesalers and distributors with its own fit-for-purpose fee structure and increased penalty amounts to reflect the scale of distributors versus retailers.

To qualify for a licence, retailers will need to show they have put measures in place to prevent the sale of vapes to minors; do not sell nicotine-free vapes to minors; only stock and sell compliant products; operate legally across all areas of the business – i.e., payment of VAT; promote products within the advertising regulations; and meet their environmental obligations.

Distributors will also need to ensure they are meeting marketing, environmental and business obligations, as well as ensuring they only stock and sell compliant goods; train staff in the correct handling and storage of vaping products; and do not stock or sell any products which could be deemed as overtly youth appealing.

The plans include a four-strike penalty system with the highest fine being £10,000 for retailers and £100,000 for distributors.

Trading Standards would also be given the ability to issue on-the-spot fines – this aligns with newly announced powers for enforcement officers.

Retailers and distributors caught selling and supplying vapes without a licence would be subject to an immediate fine equal to the maximum penalty amount for licence holders.

They will also have all stock seized and would be required to cover the cost of a future inspection.

Vape retailers and distributors may be blocked from obtaining a licence under a number of circumstances including, if they’ve previously been caught selling vapes, as well as products in other categories, without the appropriate certifications or if they are attempting to reapply within two years of having their licence revoked.

Businesses such as takeaways, hairdressers, beauticians, taxi drivers and ranks, event venues such as cinemas and theatres, and event operations, such as fairgrounds and carnivals, will not be allowed to sell vapes.

Under the plans, retail licensees would also have to undergo test purchasing exercises at least every six months to ensure they are following youth access prevention procedures.

As well as having their stock inspected to ensure the products they sell are registered on the MHRA notified products list and comply with TRPR provisions.

They would also be checked on a regular basis to ensure they are complying with advertising and environmental regulations.

Licensed distributors would be subject to regular inspections to ensure they are meeting compliance requirements across the board.

The proposed scheme draws upon a similar initiative in New Zealand as well as other retail licensing schemes, such as for the alcohol industry.

Many of those consulted as part of the development of the licensing regime believe such a scheme is not only possible, but preferable if youth vaping and the scourge of the illicit vape market are to be tackled.

Dan Marchant, co-founder of the UK Vaping Industry Association (UKVIA) and Managing Director of Vape Club, which has led on the development of the proposed scheme and conducted the FOI investigation, said:

“It doesn’t matter what legislation the government introduces, whether the newly announced ban on disposables or any future restrictions, a robust and balanced licensing system is critical to ensuring the law can actually be enforced and for ushering in a new era of responsibility, accountability and best practice.

“Trading Standards has been calling for ‘more boots on the ground’ and a more joined up ‘national picture’ to deal with the issues of underage and illicit vape sales and there is no doubt that the introduction of prohibitive new measures will make this challenge even harder.

“The scheme we are proposing is not only self-funding but would be relatively quick and easy to implement and could generate upwards of £50 million in annual funding from retailers alone – this could, in part, be used as a sustainable funding base for enforcement.

“If our licensing scheme was in force, the 2,871 retailers identified as being in possession of, stocking or selling illegal vapes through the newly released FOI research would have been fined a collective £7.1 million – alarmingly 95% of these rogue traders went ‘unpunished’ under the current system.

He added: “We don’t allow businesses to sell alcohol, surgeons to operate or drivers to get behind the wheel without a licence – why should the sale and supply of vaping products be any different?”

John Dunne, Director General of the UK Vaping Industry Association, said:

“This is an incredibly important and timely piece of work,

“One the government should pay careful consideration to if it is serious about its commitment to tackling youth vaping while also working towards a smokefree future and giving adults the best chance of quitting.

“Action must be taken to put an end to underage and illicit vape sales but a ban on disposables will turbo-charge the black market and make illegal vapes more readily accessible to young people,

“While also outlawing a product which has successfully helped adult smokers move away from and completely stay off cigarettes.

“Instead, the government must bring the hammer down on rogue traders by ensuring existing laws can be effectively and proactively enforced – this is the blueprint to make that happen.”



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Oliver Smith