Exclusive Interview: Vape Tax Special
Tax on Vapes: What Really Happens to Prices, Retailers and the Market
The UK vape duty, set to come into force in October 2026, will fundamentally reshape the e-liquid market. We sat down with Josh Douglas, Managing Director of Dispergo, one of the UK's most established vape brands, to get a frank assessment of what is coming, what it costs and what it means for every vaper in the country.
Setting the Scene
What Exactly Is the Vape Tax?
So Josh, just so everyone's on the same page, what actually is this vape tax and when does it kick in?
So basically, it's £2.20 of tax slapped on every 10ml of e-liquid. Doesn't matter if it's in a prefilled pod, a bottle on the shelf or a nic salt. If it's 10ml, it's £2.20. It hits in October 2026 and there's a grace period running through to March 2027 where retailers can sell off the stock they already have before the duty kicked in.
And look, on paper it sounds simple enough. But the actual impact completely depends on what you're buying. A little 2ml pod? That's only 44p of duty. A 100ml shortfill? That's £22. Same principle, totally different story. That's what makes this such a mess for certain parts of the market.
2026
The Real Cost
How Much Will Prices Actually Increase?
Right so let's get into the money side of it. What are people actually going to be paying more for?
Yeah so this is where it gets quite brutal depending on what you're into. Every format tells a different story and some of them are pretty grim, to be honest.
100ml Shortfill E-Liquids
A 100ml bottle holds 10 x 10ml units, so duty alone hits £22 per bottle. A product once selling for £15 realistically needs to reach around £37 after duty. With two nicotine shots added, total duty reaches £26.40 and the all-in cost rises to around £41.
10ml Nicotine Salts
Each bottle carries £2.20 of duty. A four-for-£10 bundle adds £8.80 in tax alone, pushing the same deal to roughly £18.80. This category survives but bundle deals will restructure. Expect two for £10 to become the new normal.
Small Pod Devices (2ml)
Products like the Elf Bar EB600 or Lost Mary BM600 hold only 2ml of e-liquid. Duty is just 44p per device. Most customers will barely notice given prices already vary between retailers.
What about those big puff devices, the 6000, 8000, 15k puff ones that everyone seems to be on now?
Yeah they sit in the middle really. Your Lost Mary BM6000, PIXL 8000, Nera 15k, those use 10ml pods so it's £2.20 per device. It's not going to kill the category but if you're buying them every few days it adds up and you're going to notice it. Margins in that space are already tight so it just adds more pressure on top of what's already there.
Price Impact Visual
Before & After: Key Product Price Comparison
Market Disruption
Three Stages Every Retailer Needs to Understand
So how do you see it all playing out, like from now through to the other side of the grace period?
The way I see it there are basically three phases and each one is its own headache. You've got to understand all three if you want to actually come out of this in one piece.
Oct 2026
Panic Buying
This is almost certain to happen. Every time this industry has faced a major regulatory shift (TPD in 2017, the prefilled pod ban in 2025) customers have front-loaded purchases before the change landed. The vape tax will be no different. Customers who understand what is coming will stock up on shortfills, nic salts and anything else they rely on while prices are still at their current levels.
to Mar 2027
The In-Between Period
This is where the real market disruption happens. Retailers who invested heavily before the duty date may still be selling pre-duty stock for months while smaller competitors have already moved onto duty-paid products. You could have two shops on the same street selling the same 100ml shortfill, one at £15 and one at £37. That is not a minor price difference. That is a market-distorting gap that will damage the retailers who simply could not afford to stockpile. It is not their fault but the commercial consequences are very real.
Mar 2027
The Aftermath
Once all pre-duty stock has cleared, the market will stabilise but it will look very different. Expect fewer independent retailers, reduced product diversity and smaller customer volumes. Some vapers will have quit during the price shock. Others will have stocked up and will not be buying for months. The structural question nobody can fully answer yet is: once all the dust settles, how large is the market that remains?
Shortfills may not survive this. They were built on value. When that value disappears, so does the reason to buy them.Josh Douglas, Managing Director, Dispergo
Looking Ahead
Will Shortfills Survive the Vape Tax?
You mentioned shortfills a couple of times. Do you genuinely think they're done after this?
Honestly? Yeah, I think so. Shortfills only ever made sense because of the value. A 100ml bottle for £15 when the alternative was buying loads of little bottles, that was the whole point of them. Strip that out and charge people £37 for the same thing and I just don't see who's buying it. The maths don't work and neither does the value story.
And when you factor in nic shots on top you're looking at around £41 for a setup that cost £15 before. I mean, some people will stay loyal but the market for shortfills as we know it? I think it's more or less done.
Last one. What would you say to vapers and retailers who haven't really thought about this yet?
Get your head around it now, basically. If you've got a go-to product, work out what it's going to cost you after October. Pod devices, you'll barely notice it. Shortfills, you're looking at nearly three times the price. That's a massive jump and the people who know it's coming are going to be in a much better position than the ones who get surprised by it in a shop next year.
For retailers it's the same message. The grace period sounds reassuring but it isn't really. It's six months of chaos where your competitors might be selling the same thing at half your price. You need to be thinking about your stock position, your cash flow and which categories you're going to back on the other side of this. Don't leave it too late.