Proactive Investors - You see them in the local off licence. You see them in Tesco (LON:TSCO). You see them littering the gutters of London’s streets.
Candy-flavoured, colourful vapes have swiftly become a mainstay of the public scenery, with adults and kids alike huffing vapourised blends of nicotine and glycerin from uniquely shaped devices, some representing traditional smoking products, others more akin to matchbox-sized cartridges.
If the word kids stood out to you in the above paragraph, you’re not alone.
Prime Minister Rishi Sunak pledged to crack down on underage vaping in his wide-reaching Tory conference speech in Manchester on Wednesday, where he also laid out plans to outlaw analogue vapes (cigarettes) from British stores entirely in the coming decades.
Sunak was not exactly clear on what he plans to do with vaping, but with the apparent prevalence of underage users, and compounding environmental concerns around single-use plastic products, tougher regulation is inevitably blowing the industry’s way.
What do stakeholders in the vaping industry think?
Alongside its own 88Vape brands, AIM-listed Supreme PLC (LON:SUP) is a prominent UK distributor of some of the most recognisable vaping brands on the market, including the ubiquitous ElfBar, as well as UK brand Liberty Flights.
Supreme has vocally backed support of a government crackdown on underage vaping.
Speaking to Proactive, Supreme’s chief financial officer Suzanne Smith reiterated the AIM-listed distributor's stance following Sunak’s Wednesday statements.
“He didn't say anything that he's not said before,” said Smith. “He's been quoted before saying, ‘if you are one of those firms that are peddling vapes to the youth, we're coming for you’. And that wasn't dissimilar to what he said today.”
For Smith, the negative press surrounding underage vaping is doing considerable harm to what she sees as a device whose primary purpose is getting adults off the smokes.
“If we can nip that in the bud, vaping can be celebrated again for what it was there to do, which was to get people off smoking,” said Smith.
That’s all well and good, but what if the government, as part of its crackdown, forces vape manufacturers to tone down those wacky colours and flavours that are a big part of their appeal, not just to kids, but younger adults too?
There is plenty of precedent here, and not just with generic cigarette packaging. Over 10 years ago, the alcopop moral panic caused a rethink on how sugary, tasty, alcoholic beverages were branded and marketed.
Through an air of reticence, Smith said Supreme would “absolutely” support certain measures, but warned of a double-edged sword.
Flavours and even packaging are “kind of peripheral” to the solution, apparently; getting rid of them could also deter long-term smokers from transitioning away from tobacco products.
This is debatable though. By Supreme’s own acknowledgement, the average consumer for the decidedly plainer 88Vape brand is between 30 to 50.
Does the same demographic really want to be seen outside the pub huffing on a bubblegum-favoured, bright-green smoking device? Kids aren’t vaping to kick the smoking habit, they’re vaping because they think it makes them look cool.
Regardless, a more pertinent angle would be tackling “where and how” vapes are being sold, according to Smith. After all, if a retailer is doing its job properly, no child can walk in and pick up an ElfBar and go on their merry way.
Why can you buy vapes pretty much anywhere, even hairdressers, when tobacco and alcohol require specific licences? Smith pondered.
The issue is compounded by something of a black market in off-brand vaping products pouring out of China.
“If there was much more focus on border control and the black market and making sure that this kind of illicit vape trade is really tackled… between that and the licensing, that’s how you really get to the heart of the problem with underage vaping.”
Vaping versus the environment
If only it was underage vaping causing all this negative press.
There is simply no denying that single-use vapes are an environmental catastrophe.
Material Focus, the non-profit organisation behind the Recycle Your Electricals campaign, said single-use vapes are “a strong contender for being the most environmentally wasteful, damaging and dangerous consumer product ever made”.
According to Material Focus, the five million vape kits discarded every week contain enough lithium metal to create 5,000 electric car batteries a year.
This has led to calls for a ban on disposable vapes from local councils and doctors, as well as a new petition from Greenpeace for a parliamentary debate on the matter.
As a prominent distributor, Supreme has to take some of the blame for the litter problem.
But “it's something that the entire industry has to take some responsibility for”, said Smith.
Though nothing is set in stone, the government is said to be mulling a total ban on disposable vapes following the increasing criticisms of the products.
This will be great for the environment but a major problem for an industry making big bucks on disposables.
Naturally, if there was a total ban, Supreme would no longer have disposables revenue, Smith conceded.
However, “if disposable vapes were banned, we are very confident that the average consumer that vapes… would just adapt to a different form of vaping”, said Smith, citing products like pod vaping and open-tank vaping.
Supreme and the wider vaping industry may very well find out if this is the case in the months and years ahead, if the candy-flavoured headwinds do indeed come crashing down on the party.