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Vuse owner BAT welcomes vape tax

March 7, 2024


British American Tobacco, owner of Vuse vaping products, said it supports the introduction of a “low” excise tax on the nicotine-infused liquid in vapes to better control the market, but said a tax linked to nicotine content would be difficult to enforce.

In his budget speech on Wednesday, chancellor Jeremy Hunt has confirmed the introduction of an excise duty on liquids used in vaping products from October 2026.

“We encourage the government to implement a vape tax sooner than October 2026 to tackle the illicit market that is already prolific,” a BAT UK spokesperson added.

Given ever-stricter tobacco regulations and falling smoking rates in some markets, for tobacco giants like British American Tobacco and Imperial Brands vapes potentially represent an increasingly important revenue stream.

Imperial, the owner of the blu vape brand, has in December proposed the introduction of an excise duty on all vaping products to help fund enforcement efforts.

Jefferies analyst Owen Bennett said the tax could benefit larger players by making it harder for smaller players to compete.

“BAT, especially given its highly profitable broader cigarette business, can afford to swallow the tax and not adjust prices,” he said, whereas it could make smaller firms’ products unviable.

Just before the budget speech, BAT chief executive Tadeu Marroco has endorsed the plans for a vaping tax, claiming the cigarette maker has learned to “love regulation”.

Asked if he endorsed a vaping duty, BAT chief executive Tadeu Marroco told the Financial Times: “I think that could be a good idea, I think that we need more regulation”.

A vaping tax would allow the government to exercise “better control” of the industry, said Marroco, who claimed that illegal products comprised up to a third of the UK vaping sector.

Dozens of US states and several European Union countries including Belgium and Portugal have already introduced duties on e-cigarettes. The European Commission has previously proposed an EU-wide vaping tax but its implementation has been delayed.