New legislation comes into effect over the next two months and so SLR gives the low down on how retailers should prepare for the changes ahead.
This month sees an the introduction of new legislation under an act of the Scottish Parliament which imposes an age limit of 18 on purchasing e-cigarette devices, bringing vaping under the same rules that govern tobacco products. This new law also includes a ban on adults proxy-purchasing the product for under-18s, a registration system similar to the tobacco retailer’s register and a challenge 25 age verification policy.
Next month will mark the arrival of the long-awaited implementation of the final stage EUTPD2 legislation. The latest developments mean there is still a little work to do by retailers on educating themselves (and their customers) on the changes to the vaping category. Retailers should already be keeping a close eye to stock levels to ensure that all non-compliant stock will be sold through ahead of the May 20 deadline. The penalties for any retailers found to be selling non-compliant products include fines and even jail sentences in severe cases.
- An age limit of 18 on purchasing the devices (from April 2017)
- A ban on ‘proxy purchasing’ by adults for under-18s (from April 2017)
- Prohibition on selling e-cigarettes from vending machines (from April 2017)
- A registration system for e-cigarette vendors, similar to the tobacco retailer’s register (from April 2017, with enforcement from October 2017)
- A ‘Challenge 25’ age verification policy for e-cigarette purchase (from April 2017)
- Powers to regulate domestic e-cigarette adverting – e.g. billboards, distributing samples and leaflets, point of sale (2018)
What is compliant?
Under the new legislation, a number of rules denoting what counts as compliant stock will be in enforced from May 2017. These include:
- the requirement for e-cigarettes to have health warnings covering 30% of the pack
- a 10ml maximum volume for e-liquid bottles
- a 20mg/ml maximum concentration of nicotine in e-liquids
- E-liquids in cartridges and single-use devices will be subject to a 2ml maximum volume.
It is estimated by the 100k Campaign Survey that the arrival of EUTPD2 will lead to the closure of up to 55% of vape stores, presenting a real opportunity for local retailers to make their store a destination for vapers. Jennifer Roberts, VP Customer Marketing at blu UK, says that it’s crucial to make the most of this opportunity by ensuring 100% product availability at all times to capture and retain loyal customers.
“Scotland’s sales are growing ahead of the market, up 17.5% year on year, with a market value of £16.4m,” says Roberts. “The higher growth has been the result of more sales moving into open system kits, which tend to have a higher retail selling price than other devices.”
As the price of conventional cigarettes and other tobacco related products continues to rise, vaping products present a more affordable option for existing smokers. In the UK, the average vaper spends about £2 on vaping related products on a daily basis.
“For retailers, tobacco sales may be significant at present but the profit margins are minimal.” Roberts says. “While on the flip side, vaping product sales may be small, but the margins available are high. With the value and size of the category growing in popularity, as more and more smokers look to switch to vaping products, this is an opportunity that shouldn’t be missed.”
She advises that retailers make sure they offer customers the right product for their smoking needs, with open systems for heavy smokers, and closed systems for light smokers as well as the range of e-liquids associated with the open system ranges. She also recommends stocking one closed system kit and the associated refill cartridges.
- Stock a strong range 2-3 of the top selling brands.
- Stock the three key product types – disposables, rechargeables and tank kits.
- Stock refills in a variety of flavours – tobacco, menthol, blueberry, etc.
- Stock and actively sell accessories – consumers should be replacing their clearomisers every two to four weeks.
- Make your range visible.
- Q Use counter top displays to enable consumers to see and interact with products.
- Use back wall if counter space limited or for stock.
- Provide consumer product information to help them choose.
- Train staff to be able to guide shoppers to the right products and upsell.
- Promote slow selling lines to clear stock.
