Session 2024-25
Tobacco and Vapes Bill
Written svidence Submitted by the Association of Convenience Stores (ACS) to the Tobacco and Vapes Public Bill Committee (TVB49).
ACS Submission: Public Bill Committee - Tobacco and Vapes Bill
ACS represents over 50,000 convenience stores across the UK that play a key role in communities, providing essential goods and services. Our members have a strong track record of the responsible retailing of age restricted products, including tobacco and vaping products. ACS welcomes the opportunity to provide written evidence to the Bill Committee. In relation to the World Health Organization Framework Convention on Tobacco Control, ACS has provided DHSC with a statement about ACS’ membership and funding structures on ACS’ website here.
This submission sets out ACS’ general position on the measures contained in the Tobacco and Vapes Bill. We have highlighted in more detail the potential economic impact of the bill’s new measures to introduce a licensing scheme for the retail sale of tobacco and vaping product.
Tobacco and Vapes Licensing (Part 1 Clause 16 to 18 and Schedule 1)
Licensing schemes can be an effective tool to enhance regulatory compliance if they are backed by sufficient resources. Retailers have a positive disposition towards licensing schemes, in our latest polling 58% of retailers indicated that a licensing scheme for the sale of tobacco and vapes could be effective (23% ineffective, 19% neither effective or ineffective). [1] However, our members are concerned about restricting access to licenses to sell tobacco and vapes based on proximity to schools or hospitals and/ or density of retail outlets in certain locations. A licensing system that blocks responsible retailers from establishing new premises would be bad for convenience retailers, the high streets they trade on, the provision of essential services in communities and the government’s wider objective to deliver growth.
Enforcement (Part 1 Clause 37)
We welcome the introduction of £200 fixed penalty notices for breaching age of sale requirements and would support higher levels of fine and more stringent penalties. However, we believe that the government must substantially increase the resources for Trading Standards’ services to enforce the powers in this Bill. We commissioned analysis that suggests Trading Standards services in England would need £140.4 million over five years just to enforce new vaping restrictions, this is nearly three times the current amount of funding the government is offering for enforcement of the powers contained in the Tobacco and Vapes Bill. [2]
Vaping Restrictions – Display of Products or Prices (Part 1 Clause 13)
We agree there is need for a tighter regulatory framework for the sale of vapes in the UK. New regulations must still allow adult vapers to identify and access vapes in local shops to realise their benefits as a smoking cessation option. We support pragmatic and implementable limits on the placement of vaping products in shops so they are not accessible by children throughout the store. The policy objectives of restricting the siting and display of vapes are different to those related to tobacco restrictions, so we would not support equivalent display restrictions. We would like the government to commit to detailed consultation on these regulations and to ensuring these are cost neutral for retailers to implement.
Substantial D iscounts of Tobacco and V aping P roducts (Part 1 Clause 15)
The introduction of restrictions on businesses from offering substantial discounts of tobacco and vaping products does not have a set criterion in the legislation as to what counts as a "substantial discount". If the government is going to introduce these restrictions, the definition of a "substantial discount" needs to be clearly defined and non-subjective to ensure businesses and the enforcement community can follow the regulations under one interpretation. Ambiguity will lead to inconsistent enforcement and unintentional non-compliance from businesses, causing confusion, adding unnecessary extra costs and putting businesses at risk of breaching competition law when deciding what constitutes a "substantial discount".
Accepting Digital Proof of Age for Sale of Tobacco Products ( Part 1, Clause 1)
Section 1(3) explicitly rules out the ability for retail businesses to legally accept digital forms of proof of age for the purchase of tobacco products by customers. Given the recent announcement by the Home Office that confirms its plans to allow businesses to legally accept the use of digital proof of age for alcohol products, we question why the government made this decision to exclude tobacco products in the Bill. Excluding digital proof of age for tobacco products creates challenges for businesses and misses an opportunity to embrace technological advancements that benefit both consumers and retailers. Digital wallets and applications are being increasingly used for identification and over time customers will gradually expect seamless, tech-enabled interactions for all age restricted products. The decision to solely require physical ID for tobacco products however will create friction in the purchasing process and could alienate customers in doing so. We recommend amending the legislation to allow for the use of digital proof of age to be accepted for the purchase of tobacco products.
Generational Tobacco Ban (Part 1 Clause 1)
We did not oppose the generational tobacco ban in our response to the government’s consultation in 2023. There will be some significant operational challenges for retailers implementing this and the government must fund a comprehensive communications campaign to consumers as well as within the retail trade to ensure awareness of the change in policy. We must avoid a situation where consumers are finding out about the generational tobacco ban for the first time when they walk into shops.
We have dedicated the rest of the submission to expanding on our views about the new proposals for the introduction of a retailer licensing scheme for the sale of tobacco and vaping products.
Tobacco and Vapes Licensing
In the Tobacco and Vapes Bill the government is proposing to introduce a licensing scheme for all retailers that sell tobacco and vaping products (Clauses 16 to 18 and Schedule 1), this will be set out in secondary regulations and subject to further consultation. We believe that licensing schemes can be an effective tool for increasing compliance and stamping out underage sales and the illicit tobacco and vapes market.
We are concerned that the inclusion of powers to restrict access to licenses to sell tobacco and vaping products based on proximity and density could have a negative impact on our members’ ability to establish and invest in new premises that offer essential goods and services to the community.
Our members see the potential benefits of a licensing scheme, especially in relation to the vaping market where there has been a proliferation of businesses selling vaping products that are not used to managing age restricted products. We would like future consultation to include consideration of all options that could help achieve these objectives, including adapting the existing tobacco track and trace system, introducing a registration scheme as currently in place in Scotland, or enhancing the use of restricted sales or banning orders to the sale of vaping products. We have set out below key areas of the licensing system measures we would like the Bill Committee to further scrutinise to ensure the bill is fit for purpose.
Licensing Conditions – Proximity and Density (Schedule 1, Subsection 3, Paragraph 2)
There is very little detail in the bill on the introduction of a licensing scheme for retailers of tobacco and vaping products because this will be subject to further consultation and secondary regulations. However, there are specific powers (Schedule 1, Subsection 3, Paragraph 2) to give the government and local authorities the ability to refuse the granting of a licence to sell tobacco and vapes products based on the density of other businesses operating within a specific area, for example limiting the number of outlets in a town centre. There are also powers to refuse a licence to sell tobacco and vapes products based on a business’ proximity to other local features, such as being within a certain distance of a school or hospital.
While we support the introduction of licensing scheme to enhance compliance, we are concerned by the introduction of powers that make it harder to establish new retail premises based on local features (school and hospitals) or high levels of competition from existing businesses. The establishment of a licensing scheme for the sales of tobacco and vapes products should seek to drive up compliance standards not to block businesses entering a community. A business can control factors such as age restriction policies, staff training, store signage and test purchasing rates, but it cannot account for the number of competitors or the location of local amenities.
The unintended consequences of a licensing scheme including proximity and density requirements include:
- Reducing essential service provision. Convenience stores were recognised as essential business during the pandemic because of the breadth of goods and service they offer close to where people live and work. In addition to selling tobacco and vapes, they also host Post Offices, provide access to fresh and ambient food and bill payment services. A licensing scheme that blocks the sales of tobacco and vaping products will block the provision of other essential services. The tobacco and vapes category typically contributes 20% of sales by value in a convenience store. [3] Reliance on the tobacco and vape category will gradually decline overtime, but for the foreseeable future almost all convenience stores would not be viable without the footfall and income generated by these categories as part of a full product offering. Convenience stores are resilient and relevant to consumers because of the breadth of products and services they offer, limiting this breadth, especially related to their largest product categories, would fundamentally undermine their viability.
- Delivers uncertainty for established businesses near schools or in densely populated areas. It is not clear how a licensing scheme that includes proximity and density restrictions would be applied for established businesses or new businesses wanting to open near schools or in densely populated areas that have lots of shops. There needs to be clear guidance and evidential thresholds for when licenses to sell tobacco and products will be refused based on density or proximity. For example, will existing shops within a set distance of a school be banned from selling these products or is this just for new entrants? What is the evidential framework for deciding if the density of outlets is too high? Will the evidential thresholds for density of outlets account for population density (urban vs rural), tobacco and vape related health harm or other criteria?
Many of these issues will need to be worked through in secondary legislation, but we would like reassurance from the government that the main intention of the powers to introduce a licensing scheme for retailers of vape and tobacco products is to increase regulatory compliance and operating standards that they can control, instead of arbitrarily reducing the number of convenience stores and supermarkets serving communities. If retailers are only selling age-restricted products to adults old enough to buy them, there is no reason to ban them from selling these products in any location.
We note with concern that the impact assessment supporting the Bill states: "There are international examples of tobacco licensing schemes and evidence that introducing or strengthening licensing leads to a decrease in tobacco retail density (28% decrease in Finland, 83% decrease in Hungary, 24% decrease in Australia)." [4] To be clear, a reduction of outlets of anywhere near this scale in the UK would see the closure of thousands of village shops, stores in deprived areas and stores that include Post Offices and other essential services, with a severe social and economic impact. There is no reason to think that these stores would be replaced by others selling a different product range. We want to work towards a licensing scheme that enables businesses with high compliance standards to operate instead of increasing barriers to establishment of shops that sell vaping and tobacco products.
Licensing Fees and Enforcement (Schedule 1, Subsection 4)
Under the licensing scheme, a retailer would have to apply for both a personal licence (business owner) and premises license (shop premises) to sell vaping and tobacco products. The retailer will be charged a fee for the licence, the cost of the fee is to be determined in regulations. The fee will attempt to cover local authorities’ administrative and enforcement costs (Schedule 1, Subsection 4). If the licensing fees replicated the same rates as the alcohol licensing scheme for the convenience sector, we estimate it would result in an additional cost of £11.4million per year initial sign up and £10.4million for annual renewal fees for convenience retailers. This is another increase in costs for local shops that are already dealing with rising employment costs and an uncertain economic outlook.
It is essential that this scheme serves as a tool to enhance compliance and tackle the illegal trade effectively, rather than creating unnecessary administrative challenges that could divert resources away from enforcement efforts. A key question for the government when designing a new licensing scheme is; does the policy increase the number of enforcement officers’ delivery compliance checks? We do not want the outcome of a new licensing scheme to be more enforcement officers administering the licensing scheme (applications, reviews, conditions) instead of enforcing compliance.
Our survey of trading standards teams in 2022 indicated that 61% of Trading Standards officers feel they do not have the resources to tackle the illicit tobacco and vape markets. [5] In a report we commissioned earlier this year we found that Trading Standards would need triple the amount of current funding to adequately address enforce new measures in the Tobacco and Vapes Bill. This means the government need to commitment £140.4 million of funding over five years to Trading Standards teams just to enforce new tobacco and vaping measures. This represents a once in a generation uplift in funding for trading standards enabling them to invest in 438 new full time equivalent enforcement officers. [6] The full report Resource Analysis For Vape Enforcement in England is available here.
We do not believe that the licensing fees alone should cover the cost of enforcement and administration of a new licensing system. We urge the government to formally consider in the Spending Review the use of new revenues raised from the introduction of the Vaping Product Duty to fund new enforcement action for regulations contained in the Tobacco and Vapes Bill [7] .
January 2025
[1] ACS Voice of Local Shop Polling November 2024. Sample 807 retailers
[2] Resource Analysis For Vape Enforcement England
[3] ACS Local Shop Report 2024
[4] Tobacco and Vapes Bill: Impact Assessment para 1466, page 270
[5] ACS Trading Standards Survey 2022 Sample Size 27.