Prohibition of the sale and supply of single-use vapes Full Business and Regulatory Impact Assessment

Scottish Firms Impact Test

154. Stakeholders from all affected businesses were consulted on the proposed ban on single-use vapes. Businesses and business organisations of varying size were consulted between March and May 2024 and the results are detailed below. This process sought to establish:

• Industry views on the implementation considerations for a ban on single-use vapes. i.e., what actions may different businesses take in response? Will they pivot towards reusable vapes, supply secondary equipment such as liquids, or exit the market altogether? Or a mixture of the above?
• What effect will these actions have on consumer demand and overall material use?
• The potential for unintended consequences of the ban e.g. what will happen to surplus stock if not sold prior to the ban.

155. The Scottish Firms Impact Test considers the impact of a ban on the sale and supply of single-use vapes on key sectors and groups. Consultations were held with 11 businesses of varying sizes and sectors. Below is the full summary of responses, giving details of the questions asked, responses given and how business engagement fed into the development of this proposal. Ten interviews were carried out face to face; one business provided responses via email. Interviews were conducted as part of the development of the BRIA and focused on the implementation of the policy only.

Obligation under Article 5.3 of the World Health Organization Framework Convention on Tobacco Control

156. The United Kingdom is a party to the World Health Organization’s Framework Convention on Tobacco Control. Of particular relevance to the proposed ban is Article 5.3 of the Framework Convention. The Scottish Government is committed to protecting the development of public health policy and tobacco control generally from the vested interests of the tobacco industry seriously, ensuring compliance with the UK’s international obligations when pursuing policies in devolved areas.

157. To meet this obligation we asked participants to declare any direct or indirect links to, or funding received from, the tobacco industry, and to explain what these are. Of the 11 businesses consulted, 4 declared no links to the tobacco industry, 4 declared direct links, and 3 declared indirect links.

158. We would consider a direct link to be a person, company, or organisation who receives funding directly from the tobacco industry, or an organisation which has tobacco companies as members. We would consider an indirect link to be any person, company, or organisation who derives any form of indirect benefit from the tobacco industry – this would include retailers who sell tobacco products, or anyone who receives gifts, services or hospitality from tobacco companies. A full list of the organisations interviewed and their declared links to the tobacco industry can be found in Table 6 below..

159. In line with the requirements of article 5.3 of the FCTC, we have summarised the views of respondents with disclosed links to the tobacco industry. But we have not considered these views when determining our policy response due to the vested interests of the tobacco industry. While these views have not been considered during the earlier policy making process, the Scottish Firms Impact Test relates to implementation of the proposed measure and seeks to capture the impact of the proposed measure on businesses. At the time of the interviews for the Scottish Firms Impact Test, the policy had already been established, with draft regulations and interim impact assessments published.

160. Interactions with the tobacco industry have taken place only to the extent strictly necessary to enable us to effectively regulate the tobacco industry and tobacco products.

161. Lastly, representatives were made aware, that, as the purpose of the discussion was to discuss the impacts of the proposed ban on the sale and supply of single-use vapes, officials would be unable to discuss work of the Tobacco and Vaping Framework or the Tobacco and Vaping Bill, both of which are led by the Tobacco Control team in the Population Health Directorate.

162. Table 6 below summarises the businesses interviewed for the Scottish Firms Impact Test. The stakeholders were selected to represent the breadth of the sectors and activities potentially affected by the ban on single-use vapes.

Scottish Firms Impact Test Results

163. Below we summarise the responses given by stakeholders interviewed for each of the twelve core questions that were developed for the Scottish Firms Impact Test. These interviews were conducted as part of the development of the final BRIA. To ensure transparency under Article 5.3, a summary of the interviews can be found below.

164. Question 1 “The Scottish Government is currently consulting on legislation aimed at banning the sale of single-use vapes in Scotland. Are you supportive of the introduction of this ban? Why (not)? Please give your reasons.”

165. Agree with environmental objectives of the ban Four organisations (Asda, LAWMN, RMAS, and VPZ) supported the environmental objectives of the ban. Asda and VPZ stated that the ban would be good for the community and wider environment. LAWMN and RMAS were supportive due to the environmental benefits and reduction in the risk of fires caused by batteries ending up in general waste. RMAS further highlighted the reduction in litter and contamination of other material which could be recycled.

166. Partial support Five organisations (ACS, FIR, IBVTA, SRC, and Tesco) expressed partial support for the ban. ACS stated that the focus must be on responsible delivery and the need for awareness raising campaigns. FIR suggested that the ban would have been better undertaken on a transnational basis, or replaced with a deposit return scheme for single-use vapes. Both ACS and FIR expressed concern regarding resources for enforcement authorities. The IBVTA highlighted concerns about potential equalities issues for people who are unable to operate a reusable product. The SRC expressed concerns that while a ban is in the interest of legitimate retailers, it could disadvantage those who follow the rules. Tesco also highlighted a number of other policies aimed at improving the environmental outcomes and reducing vaping, such as WEEE collection buckets, avoiding stocking products aimed at children, and robust age verification processes.

167. Do not support One organisation (SGF) stated that they did not support a ban. SGF expressed that they consider a range of vaping products useful as a smoking cessation tool for adults.

168. Question 2. “In your opinion what will be the biggest potential impacts (both costs and benefits) of introducing the ban on your business or, on those which you represent? Which businesses, in your opinion, will be most affected by the ban? Please provide evidence where possible.”

Costs

169. Three organisations (ACS, Asda, VPZ) highlighted the perceived risk of increasing the size of the illicit market by banning single-use vapes.

170. One organisation (VPZ) expressed concerns around the potential disposal costs of illicit products once a ban comes into place, as the illicit market does not comply with regulatory requirements but will continue to produce these items.

171. Four organisations (FIR, IBVTA, SGF, SRC) raised concerns around the potential cost to small businesses of introducing a ban on the sale and supply of single-use vapes, as these are high margin items. It was argued that in the context of a number of policy measures which impact the retail industry, as well as rising running costs, this could potentially cause businesses to struggle.

172. Two organisations (ACS, SGF) were of the view that a ban on the sale and supply of single-use vapes could potentially lead to an increase in tobacco sales.

173. One organisation (Tesco) expressed concern about the risk of potential inconsistency in enforcement across the UK, as this could have cost and resource implications.

Benefits

174. One organisation (LAWMN) stated that they expect the ban to have a positive impact for local authority waste managers, as a ban would likely lead to a reduction in littering.

175. Two organisations (LAWMN, RMAS) stated that a further benefit of the ban will be the reduced risk of fires at waste treatment facilities, which currently have significant costs in terms of insurance premiums and rebuild costs.

176. Question 3. “A ban on single-use vapes could bring about a change in the consumption patterns for reusable vaping products. Do you, or those businesses that you represent, hold a view on what new consumption patterns or new vaping products could potentially emerge?”

177. Three organisations (ACS, LAWMN, Tesco), stated that a ban is likely to cause a shift in consumers towards reusable vapes. The IBVTA and ACS commented on the possibility of single-use vape users sourcing products from the illicit market.

178. Four organisations (Asda, FIR, IBVTA, VPZ), commented that the market is already moving towards reusable vapes. It was highlighted that these often produced by the same brands currently producing single-use vapes. Two organisations (SRC, Tesco) raised concerns about the importance of the definition of single-use in the regulations, as producers are likely to design devices which technically comply with the legislation but are treated as single-use in practice.

179. Two organisations (LAWMN, RMAS) commented on the need for improved advice and systems for recycling reusable vapes once the ban is introduced. A further two (RMAS, FIR) raised the possibility of introducing a deposit return scheme for vapes to encourage behaviour change and incentivise returns.

180. SGF raised concerns that a ban would lead to a potential for reduced footfall for convenience stores.

181. Question 4. “Do you, or those businesses that you represent, hold a view on what impacts a ban on single-use vapes could have on illicit sales of vapes? Are there specific issues in this area that you would like to raise? Do you have any evidence that you can share?”

182. Six organisations (ACS, Asda, FIR, RMAS, SGF, and SRC) commented on the need for more resources for Trading Standards and other enforcement authorities in order to enforce the ban and to clamp down on the illicit market. ACS, FIR and SGF all specifically stated that the £30 million budget previously announced by the UK Government for enforcement is insufficient. Asda and VPZ raised further concerns about the safety of unregulated and dangerous products making their way onto the market. The upcoming UK General Election has caused some uncertainty around funding for enforcement, but the Scottish Government remains firmly committed to banning single-use vapes and addressing any complexities to achieve long-term benefits for communities across Scotland. The Scottish Government will continue to meet with relevant authorities such as COSLA and Trading Standards to determine additional funding needs resulting from resourcing requirements for enforcement purposes.

183. FIR expressed the view that vape retailers should be required to have a tobacco licence. RMAS highlighted the difficulty of policing online sales. SRC stated that guidance will be required for local authorities and retailers, particularly to ensure that legitimate retailers are not inadvertently breaking the law.

184. Question 5. “Our understanding is that most single-use and reusable vapes are manufactured outside the U.K. Are you, or those businesses that you represent, aware of any vape manufacturing businesses located in Scotland?”

185. None of the organisations interviewed were aware of any vapes manufacturing businesses located in Scotland. The IBVTA, SGF, Tesco and VPZ commented that they were aware of e-liquid manufacturers based in the UK.

186. Question 6. “To what extent do you expect the market restrictions to put your business, or those which you represent, at a disadvantage, nationally or internationally? Please provide evidence where possible.”

187. Asda and VPZ stated that provided the ban is properly enforced, this should lead to a level playing field for responsible retailers, with no disadvantage experienced on a national level. However 5 organisations (ACS, Asda, LAWMN, SGF and VPZ) also stated that the disadvantage is likely to arise through legitimate business potentially losing custom to the illicit market.

188. FIR expressed concerns that small businesses could be put at a disadvantage by the ban, due to their reliance on the high margins from single-use vapes to mitigate the rising costs elsewhere.

189. The IBVTA and SGF commented on the likelihood of single-use vapes continuing to make their way onto UK market through neighbouring EU countries. It was highlighted that a ban would be more effective if Northern Ireland, the Republic of Ireland and neighbouring EU countries also brought in a ban.

190. Question 7. “It is expected that the ban will result in lower levels of litter, fewer fires linked to lithium batteries that are incorrectly disposed and improved overall environmental outcomes. How would this impact your organization?”

191. ACS commented that banning single-use vapes may result in fewer being returned for recycling, and that the ban should not have been introduced prior to the mandatory single-use vapes returned points being embedded in through the WEEE regulations. Note that at the time of interview, all stores selling vapes (both reusable and disposable) were already required to provide a waste vape bin for in-store takeback in line with the Waste Electrical and Electronic Equipment Regulations 2013 (the WEEE regulations), as all vapes sales are now excluded from the new Distributor Takeback Scheme with effect from 1 Jan 2024.

192. SGF commented on the need for the environmental impact of the illicit market to be accounted for. SGF and VPZ argued that continuing to obligate retailers to host return points after the ban is introduced could be dangerous, as they would be made to accept unregulated products which could pose a fire risk. VPZ raised concerns that there will be no proper route to dispose of illicit vapes, and a lack of funding from producers paying for illicit products to be disposed.

193. FIR commented that in their view a deposit return scheme for vapes would help reduce littering.

194. The IBVTA highlighted the risk of low-price reusable vapes entering the market, which due to their low price point could be treated as single-use by consumers. They were of the view that the success of the ban could be impacted by consumer behaviour.

195. Asda, LAWMN and RMAS commented on the positive impact the ban could have in terms of the reduction of litter. LAWMN and RMAS highlighted that for waste management companies a ban would likely lead to improved health and safety, fewer fires caused by batteries in single-use vapes, and lower associated costs in terms of repairs and down time.

196. Question 8. “Is there anything else you wish to add not covered by the above questions noting that we cannot discuss wider tobacco control policies as noted at the start of the meeting?”

197. Asda commented on the importance of a simultaneous implementation date across UK, and expressed a preference for a longer period of time to sell off existing stock in advance of the ban.

198. FIR and LAWMN expressed the importance of an educational programme on the dangers of vaping, and around end-of-life of both single-use and reusable vapes in order to reduce the risk of waste fires.

199. IBVTA, SGF and VPZ commented on the need for increased funding and resources for Trading Standards in order to successfully enforce the ban, and to prevent the growth of the illicit market.

200. RMAS commented in support of a deposit return scheme for single-use vapes, failing which, a separate category in the WEEE regulations [and WEEE takeback ]for vapes.

201. SGF expressed that there was a lack of engagement with business, and encouraged the Scottish Government to engage as much as possible in the lead up to the ban. They raised further concerns around the potential ‘race to the bottom’ where producers continue to produce low price products that while technically reusable, are treated as single-use in practice.

202. Tesco commented on the importance to balance plans to tackle youth vaping with the importance of vapes as a tool for adult smoking cessation. They suggested that this could be achieved through limiting the choice of available flavours. In addition, they expressed concerns around the role that packaging plays in helping staff to quickly differentiate between products.

Summary

203. Under article 5.3, we should interact with the tobacco industry only when and to the extent strictly necessary to enable us to effectively regulate the tobacco industry and tobacco products.

204. The above responses have, in part, informed the development of this Business and Regulatory Impact Assessment and the approach to implementation of the ban on the sale and supply of single-use vapes . The range of issues raised have been addressed throughout the suite of published documents accompanying the Regulations, including the potential impact on small retailers, the need for additional funding for enforcement, and concerns around the possible growth of the illicit market.