According to a report by the UK Vaping Industry Association, the rapidly growing electronic cigarette industry in the UK has now become a multi-billion pound industry, offering employment opportunities to nearly 18,000 full-time employees, and generating hundreds of millions of pounds in revenue for the Treasury.
According to a report, adult smokers switching to e-cigarettes have saved the UK's National Health Service (NHS) approximately one-third of a billion pounds. If 50% of smokers continue to use e-cigarettes, this number is estimated to more than double.
The report uses key macroeconomic indicators such as revenue, Gross Value Added (GVA), employment, and employee wages to provide a detailed account of the economic contribution of the e-cigarette industry to the UK economy.
Last year, as smokers switched to electronic cigarettes, the industry's total revenue reached 2.8 billion pounds.
According to research, the industry supports nearly 18,000 full-time equivalent jobs in retail, manufacturing, and supply chain.
It is estimated that in 2019 alone, the cost savings for the NHS from smokers switching to e-cigarettes exceeded £300 million.
Despite the adverse effects on commercial streets in recent years, electronic cigarette retail stores have defied the trend and emerged as one of the fastest-growing industries since their introduction in the 1960s.
The report was compiled by the Centre for Economics and Business Research (Cebr) and investigated the direct economic contribution of electronic cigarettes, as well as their wider impact, taking into account factors such as expenditure on supply chains and industry promotion.
From 2017 to 2021, the overall revenue of the e-cigarette industry in the UK has grown by 23.4%, adding £251 million, with last year alone reaching £1.325 billion. If indirect economic benefits such as supply chain support and the spending power of e-cigarette sector employees are taken into account, the economic impact will more than double to reach £2.8 billion.
In 2021, the combined number of direct and indirect employees in the e-cigarette industry stands at 17,700, including those working in other departments of the supply chain.
In 2021, a donation of £310 million was made to the Treasury through taxes.
The electronic cigarette industry has brought about wider social and economic benefits, particularly with regards to positive health impacts. According to a report by Cebr, in 2019 the total amount of medical expenses saved due to smokers switching to electronic cigarettes was estimated to be £322 million. The research institution also stated, "If 50% of smokers switch to electronic cigarettes, the potential savings in medical expenses in 2020 would be £698 million.
According to estimates, the "economic productivity" related to smokers switching to electronic cigarettes increased by £1.3 billion in 2019. Based on this research, if 50% of the remaining smokers in the UK switch to electronic cigarettes, this figure will increase to £3.33 billion.
Owen Good, Director of Cebr Economic Consulting, has stated that the first-ever economic impact report on the e-cigarette industry shows significant success as a rapidly growing disruptive industry.
He went on to say, "Despite many retail businesses on commercial streets suffering losses in recent years, the electronic cigarette industry has grown against the trend, with significant growth both in stores and online. Even the impact of the epidemic has not seriously hindered the growth of the industry.
The growth of the industry has benefited the UK economy, the businesses and employees directly involved in the industry, as well as those operating in the wider supply chain. As more and more smokers switch to e-cigarettes to quit smoking, the NHS has also made significant cost savings.
John Dunne, General Secretary of the UK Electronic Cigarette Industry Association, added: "In just over a decade, the UK electronic cigarette industry has transformed from a small cottage industry to one of the fastest-growing sectors, not only within the retail industry, but across the entire economy.
The number of people using e-cigarettes is at an all-time high, making it a true success story for the UK. The industry has created jobs, generated wealth, and provided the government with valuable tax revenue. Additionally, the shift from smoking to using e-cigarettes has saved the National Health Service over £300 million annually.
No wonder some of the world's biggest retail brands are now praising the benefits of electronic cigarettes, as they recognize the value of e-cigarettes both as a product and in reducing harm.
However, it was the expertise of electronic cigarette retailers and manufacturers that led the way in turning e-cigarettes into today's economic force, as emphasized by this significant report.
He added: "For some time now, we have known that the electronic cigarette has helped smokers change their lives and health by quitting smoking. But now we know that this industry has come a long way and has had a huge impact on the economic health and well-being of society.
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