Why British American Tobacco is campaigning for higher taxes on vapes
You might not expect a tobacco company to advocate for more taxes and regulation, but that’s just what BAT—formally known as British American Tobacco—has been doing following the government’s recent plans to introduce a tax on vapes in the UK.
In 2020, the company started rolling out its Better Tomorrow transformation, which was built around the principle that the world is moving away from traditional cigarettes. The products replacing cigarettes vary from market to market, although they all have some nicotine links.
This varies from market to market, with the company prioritising products such as heat not burn tobacco in Japan, where this product has a 40 per cent market share while prioritising e-cigarettes and vapes in markets such as the UK.
In other markets, smokeless and non-tobacco products are rapidly gaining market share, and VAT wants to be across all of these markets as it diversifies its business lines.
In the UK, BAT has argued the government needs to go further than its current proposed regulation. Under the new proposals, the government has said it will introduce an exercise tax on vaping, potentially bringing as much as £120m by the 2026 to 2027 tax year.
At the same time, the government has said it will outlaw disposable vapes next April and introduce a £100 on-the-spot fine for shops in England and Wales that sell these products to anyone under the age of 18.
However, research presented by BAT has shown many people want the rules to go further to protect and enhance the market. According to the research, 90 per cent of primary school parents have said they are worried about underage vaping. Of the 2000 parents of secondary school children surveyed by the company, more than half believe that shops failing to check IDs is the biggest source of underage vaping.
It’s also calling for higher exercise taxes and taxes on these products in general. BAT has argued that increasing the taxes will increase authorities’ oversight and reduce the risk of illicit or illegal products entering the market.
Ultimately, by campaigning for tougher restrictions, BAT hopes to improve sentiment towards vaping and other smoke-free products.
The company’s research has shown some smokers have been put off using vapes and e-cigarettes due to the risks associated with purchasing potentially unregulated and illegal products. They have argued this is harming public health in the UK and preventing smokers from switching and improving their lifestyles.
“We recognise that traditionally, companies like BAT have been perceived as opposing regulation,” said Asli Ertonguc, BAT lead for the UK.
“We are clear on our responsibilities, and therefore want to have an open conversation about appropriate regulation that will tackle underage vaping while keeping vapes as a vital tool to help the UK reach its smoke-free 2030 goal, an ambition that BAT supports.”
“Vaping is the key to unlocking the UK’s smoke-free target,” Ertonguc said. “As the largest manufacturer of vaping products in the UK, we believe there is a narrow window to get this right with the Tobacco and Vapes Bill. Put simply, parents want more to be done to tackle underage vaping, and so do we.”
In its 2023 annual report, BAT highlighted “the growth of illicit single-use vapour products” as one of the main risks to growth. It argued that the growth of these products could undermine its ambition to generate 50 per cent of revenue from non-combustibles by 2035 while hurting international ambitions to reduce cigarette consumption.