Decline in Tobacco and Alcohol Taxes in UK

Market by 2FIRSTS.ai
Jan.18.2024
Decline in Tobacco and Alcohol Taxes in UK
According to a recent analysis by financial experts RIFT, tobacco and alcohol tax in the UK has dropped at the fastest annual rate in two decades.

According to a January 17th report by British media outlet EINPresswire, the latest analysis from financial experts at RIFT suggests that the total amount of tobacco and alcohol tax received by the HM Revenue and Customs (HMRC) in the UK last year declined at the fastest annual rate in twenty years. Despite a continuous upward trend in tobacco and alcohol revenue during the same period, the data suggests that we may be seeing a trend of decreasing alcohol consumption and smoking habits.

 

RIFT has analyzed the latest data on tobacco and alcohol tax revenues from HMRC (up to December 2023), illustrating the changes in these tax revenues over the past 20 years and comparing them to NHS healthcare expenditures caused by smoking and alcohol consumption.

 

Analysis shows that the UK customs collected over £10 billion in tobacco taxes in the 2022/23 fiscal year. Although this is the second-highest total in the past twenty years, it signifies a 2.7% annual decrease, marking the third significant annual decline in two decades. Meanwhile, alcohol taxes paid in the 2022/23 fiscal year amounted to £12.4 billion, the highest total in the past 20 years. However, this represents a 5.1% annual decrease, the most severe single-year decline in two decades. Consequently, the total amount of taxes paid on tobacco and alcohol products last year reached £22.4 billion, despite the substantial sum, it indicates a 4% annual decrease, representing the largest annual reduction in the past 20 years.

 

This also marks the fourth consecutive year of decline in overall tobacco and alcohol tax revenues over the past two decades. Interestingly, in 2003/04, tobacco taxes accounted for 52% of HMRC's total income, but this proportion has now shifted, with alcohol taxes making up 55%. While smoking and drinking are detrimental to health, additional research by RIFT reveals that smoking-related medical expenses cost the NHS approximately £3.4 billion annually, whereas alcohol-related healthcare issues amount to £4.1 billion each year. Together, these expenses result in an expenditure of nearly £7.5 billion per year due to smoking and alcohol-related problems.

 

Although the figure itself is substantial, it only represents one-third of HMRC's total revenue from tobacco and alcohol taxes for the 2022/23 fiscal year.

 

RIFT General Manager Bradley Post commented, "Smoking and drinking are primary vices that many of us hope to quit, and we expect to begin the new year with a positive attitude. Currently, tobacco and alcohol tax revenues remain at their second-highest level in the past twenty years, generating approximately three times the estimated cost of medical services. However, both sources of tax revenue have seen the fastest decline in the past two decades.

 

One important issue to consider is the rise of e-cigarettes. Currently, e-cigarettes are not subject to the same taxation as tobacco products, although this situation may soon change. As a relatively new phenomenon, we do not yet know how many people choose to use e-cigarettes or what impact this will have on the NHS in the coming years.

 

We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

Ispire Q4 Revenue Rebounds 33% but Full-Year Sales Still Fall 25% as FY2027 Focus Shifts to Malaysia Manufacturing, ODM, Nicotine Pouches and Age Verification
Ispire Q4 Revenue Rebounds 33% but Full-Year Sales Still Fall 25% as FY2027 Focus Shifts to Malaysia Manufacturing, ODM, Nicotine Pouches and Age Verification
Ispire Technology reported FY2026 revenue of about $96 million, down 24.7% year over year, as U.S. cannabis-vapor hardware and European e-cigarette sales declined by $17.4 million and $12.7 million, respectively. Fourth-quarter revenue rose 32.5% to $26.7 million, while quarterly gross margin fell to 6.3%. For FY2027, the company is prioritizing Malaysia manufacturing and vapor ODM while continuing to develop nicotine pouches, IKE Tech age-verification technology and G-Mesh licensing. Ispire has not separately disclosed the revenue or profit contribution of those newer businesses.
Regulations
Sep.17 by 2Firsts Perspectives
Smoore Wins Three Heated Device Supply Lots in China Tobacco Jiangsu’s Overseas Market Project Covering Japan, South Korea and Southeast Asia
Smoore Wins Three Heated Device Supply Lots in China Tobacco Jiangsu’s Overseas Market Project Covering Japan, South Korea and Southeast Asia
China Tobacco Jiangsu Industrial Co., Ltd. (JSIC) has completed its 2026-2028 heated device procurement project, with Shenzhen Smoore Technology Limited securing final supply contracts for three lots: U1, C1 and C2. The project was launched through a public tender in June 2026 to support overseas markets and involved heated tobacco devices carrying JSIC’s “iRod” trademark. Candidate supplier results published on July 13 showed Smoore ranked first for the three awarded lots, while Shenzhen Yunxi Intelligent Technology Co., Ltd. and Shenzhen Bodi Technology Development Co., Ltd. participated in the bidding process.
Aug.03
R.J. Reynolds Vapor Company Launches Flavored Vuse Pro Pods in U.S. Without FDA Marketing Authorization
R.J. Reynolds Vapor Company Launches Flavored Vuse Pro Pods in U.S. Without FDA Marketing Authorization
R.J. Reynolds Vapor Company has begun selling four flavored Vuse Pro pods — Peach, Berry, Watermelon and Fresh Mint — in Ohio and selected other U.S. markets. According to the Vuse U.S. FAQ, Vuse Pro contains approximately 5.0% nicotine by weight, and Vuse Pro pre-filled pods are intended for use with Vuse Alto devices. Reynolds told 2Firsts that product labeling lists an e-liquid capacity of 2.0 mL per pod. The Vuse Alto Power Unit received FDA marketing authorization in 2024, while the new Vuse Pro pods themselves have not received marketing granted orders. The rollout follows the FDA’s May 2026 revision of enforcement priorities for certain unauthorized vaping products with qualifying pending applications.
BAT
Sep.10
UK-Listed Consumer Goods Group Supreme Sees Vape Duty as Potential Consolidation Opportunity, Holds FY27 Outlook
UK-Listed Consumer Goods Group Supreme Sees Vape Duty as Potential Consolidation Opportunity, Holds FY27 Outlook
UK-listed consumer goods group Supreme plc says it continues to expect FY27 trading to meet market expectations as the Vaping Products Duty takes effect on October 1, while maintaining a comparatively positive view of the new tax and compliance regime. Supreme has said the framework could increase compliance complexity for smaller operators and contribute to market consolidation, while its manufacturing, compliance and distribution scale may allow it to gain share. Its 88Vape brand will retain its value positioning.
Sep.18
From Vuse, Velo and glo to AI Consulting: Former BAT Content Lead Launches Destreza
From Vuse, Velo and glo to AI Consulting: Former BAT Content Lead Launches Destreza
Former BAT global content lead Andy Parton has left the company and launched Destreza, a London-based AI-native marketing consultancy. Parton previously worked across BAT's New Category brands Vuse, Velo and glo and had also served as Global Brand Lead for Vuse Go. Destreza says it will advise consumer businesses on AI in brand strategy, operating models, capability and agency configuration, using specialist AI agents to support research, strategy and creative development. BAT reported £3.621 billion in New Category revenue in 2025.
Sep.22
Couche-Tard Posts Double-Digit U.S. Same-Store Growth in Other Nicotine Products, Led by Pouches
Couche-Tard Posts Double-Digit U.S. Same-Store Growth in Other Nicotine Products, Led by Pouches
Alimentation Couche-Tard said U.S. same-store sales in its “other nicotine products” category grew at a double-digit rate in the first quarter of fiscal 2027, led by nicotine pouches, while overall U.S. same-store merchandise revenues increased 1.7%. The company also said its Canadian nicotine business continued to face regulatory pressure and illicit-market headwinds. The U.S. performance coincides with Couche-Tard's participation in efforts to reopen Canadian convenience-store access to authorized nicotine pouches, though the company has not established a direct causal link between the two.
Sep.14