Display restrictions to products and prices for herbal smoking products, heated tobacco devices, vaping and nicotine products in Scotland - Partial Business and Regulatory Impact Assessment

Section 3: Costs, impacts and benefits

Quantified costs to businesses

The following quantified costs have been identified as likely to be incurred by businesses as a result of these regulations. Several costs make use of average wage data, which only represents the wage costs of the employees, and does not reflect additional hourly costs associated with employment (such as national insurance contributions). To account for this, the proportion of labour costs that are non-wage costs are estimated using the Index of Labour Costs per hour, seasonally adjusted.^[56]

The labour costs per hour across the whole economy in 2020 Q3 was reported to be £22.80. The wage costs per hour across the whole economy in 2020 Q3 was reported to be £19.20. Based on this, the non-wage labour costs are calculated as 1 minus the wage costs per hour divided by the labour costs per hour, or 16%. To uplift hourly wage to account for this non-wage labour cost, wages are divided by 1 minus the non-wage labour cost of 16%, or multiplied by 1.19.

Familiarisation Costs

Familiarisation costs would apply to all businesses that stock products that are within the scope of the regulations and includes the cost to familiarise themselves with the new guidance, regulations, and implementation requirements. To estimate this cost, the number of people reading the new guidance is multiplied by the time taken to read the guidance and the hourly wage.

It is assumed that one person per business would be required to familiarise themselves with the guidance, and previous guidance for regulations on the display of tobacco was around 7,000 words long^[57]. Based on technical text reading speed, it is estimated that people responsible for reading the guidance will read approximately 75 words per minute^[58]. This implies that it would take around 1.5 hours to read the guidance in full. The familiarisation cost is the same under options 2 and 3, and slightly higher under option 1 due to the lack of exemptions for pharmacies.

For each retailer except pharmacies the 2025 median hourly wage for ‘Shopkeepers and owners – Retail and wholesale’ of £15.44 is used^[59]. For pharmacies, the 2025 median hourly wage for ‘pharmacists’ of £27.01 is used. An uplift of 19% to account for non-wage labour costs is applied to each to give a final hourly wage of £18.37 and £32.14 respectively.

The total familiarisation cost under each option is presented in the table below. Across all businesses affected in Scotland the total familiarisation cost is between £313,000 and £323,000 depending on the option.

Table 11: Familiarisation costs by business category

Business Category	Option 1	Option 2	Option 3
Bulk Suppliers and Wholesalers	£2,039	£2,039	£2,039
Convenience Stores and Small Shops	£173,107	£173,107	£173,107
Supermarkets and Large Shops	£30,427	£30,427	£30,427
Specialist Tobacconists	£1,654	£1,654	£1,654
Other Retailers non-pharmacies	£106,108	£106,108	£106,108
Pharmacies	£9,884	£-	£-
Total	£323,218	£313,334	£313,334

Storage Costs

Storage costs apply to retailers selling products in scope and include the cost for retailers to comply with regulations such as purchasing new storage for products or adapting and updating current storage. To estimate this cost the number of businesses requiring new or updated storage is multiplied by the cost of storage, plus the time taken to install the storage and the hourly wage.

The cost of storage is dependent on the business type, as some may require more or less storage to comply with this option. There are a number of different types of storage available which businesses may use to store products^[60]. The following storage products have been used for the purposes of this analysis:

• Under counter storage, ranging from £85 to £120 – an average of £99 is used.
• Drawer units, ranging from £349 to £432 – an average of £372 is used.
• Display cabinets, ranging from £595 to £716 – an average of £632 is used.
• The cost of installing storage units will also vary, as some storage units will take longer to install than others. Additionally, existing staff may install storage units in some businesses, whereas other businesses may choose to hire professional tradespeople to install the displays.

For all businesses except for bulk suppliers and wholesalers, the monetised storage cost will be the same under options 2 and 3. For bulk suppliers and wholesalers storage costs will be higher under option 3 due to the removal of exemptions. For all businesses, it is assumed that there would be no storage costs incurred under option 1, as under this option the ban is limited to end of aisle and promotional displays meaning businesses would be able to stock products elsewhere in the store without needing to purchase additional displays.

Supermarkets and Large Shops

It is assumed that supermarkets and large shops may opt to install additional display cabinets as they have more space available. It is assumed that each will only need one additional display cabinet. For these businesses, a display cabinet cost of £632 has been assumed.

Given the size of these display units, it is assumed that they will be more difficult to install, so businesses will choose to hire professional tradespeople to install them. It is assumed that it will take a single professional tradesperson 1 hour to install a large display.

For the labour cost of installation, the 2025 median hourly wage for “Construction and Building Trades” of £16.99 has been used.

Adjusted for non-wage labour costs this implies a final hourly labour cost of £20.22.

The total storage cost for supermarkets and large shops is presented in Table 12.

Table 12: Storage Costs for Supermarkets and Large Shops

Category	Option 1	Option 2	Option 3
Storage Unit Costs	£-	£697,905	£697,905
Labour Costs	£-	£22,321	£22,321
Total	£-	£720,225	£720,225

Bulk Suppliers and Wholesalers

Under the proposed regulations, in addition to placing the products in scope in complying storage, bulk suppliers would now also no longer be exempt from existing display restrictions relating to tobacco products in option 3. This represents a more significant change than for other types of businesses affected, and it assumed to result in larger storage costs. Although wholesalers would not be affected in the same way as bulk suppliers unless they meet the criteria for a ‘bulk supplier’, it is not possible to distinguish between bulk suppliers and wholesalers within the retailer register. Given this, it is assumed that bulk suppliers and wholesalers will both face the same storage costs, although wholesalers may not be affected to the same extent if they are not currently subject to the ‘bulk supplier’ exemption. This is a necessary simplifying assumption due to the lack of evidence available, which may result in an overestimate of storage costs for these businesses.

Under option 2, it is assumed that bulk suppliers and wholesalers will opt to install one additional display cabinet each. Under option 3, it is assumed that bulk suppliers and wholesalers will opt to install additional large display cabinets. It is assumed that bulk suppliers and wholesalers selling either tobacco only or vaping products only will each install one additional large display cabinet, and those selling both tobacco and vaping products will install two additional large display cabinets. For these businesses, a display cabinet cost of £632 per cabinet has been assumed.

Given the size of these display units, it is assumed that they will be more difficult to install, so businesses will choose to hire professional tradespeople to install them. It is assumed that it will take a single professional tradesperson 1 hour to install a single large display. For the labour cost of installation, the 2025 median hourly wage for “Construction and Building Trades” of £16.99 has been used.

Adjusted for non-wage labour costs this implies a final hourly labour cost of £20.22.

The total storage cost for Bulk Suppliers and Wholesalers is presented in Table 13. It is important to note that the removal of the exemption for tobacco displays also applies to duty free businesses, so these businesses would also likely incur these higher storage costs. Duty free businesses selling tobacco or nicotine products are not presented as a specific category in the retailer register, but it is assumed that these businesses are included within the bulk suppliers and wholesalers category.

Table 13: Storage Costs for Bulk Suppliers and Wholesalers

Category	Option 1	Option 2	Option 3
Storage Unit Costs	£ -	£46,780	£74,595
Labour Costs	£ -	£1,496	£2,386
Total	£ -	£48,276	£76,981

Convenience Stores and Small Shops

It is assumed that convenience and small shops will opt for additional storage with a smaller footprint and upfront cost. This could include under counter storage or drawer units rather than additional display cabinets. Additionally, industry may provide funding for small retailers for storage similar to when the previous display regulations were introduced.^{[61] [62] [63]}

Based on this, cost of display storage for convenience and small shops is taken as an average of: £0 where industry funds the cost of the storage, £99 where under counter storage is used, and £372 where additional drawer units are used. Each option is assumed equally likely and it is assumed that each store will purchase one additional storage unit, implying a final storage unit cost estimate of £156.

It is assumed that convenience and small shops will have existing staff install the storage units rather than hiring professional contractors. It is assumed that it will take one member of staff half an hour to install a storage unit. For the labour cost of installation, the 2025 median hourly wage has been used for ‘Shopkeepers and owners – Retail and wholesale’ of £15.44^[64]. Adjusted for non-wage labour costs this implies a final hourly labour cost of £18.37.

The total storage cost for convenience and small shops is presented below:

Table 14: Storage costs for convenience stores and small shops

Category	Option 1	Option 2	Option 3
Storage Unit Costs	£-	£981,092	£981,092
Labour Costs	£-	£115,405	£115,405
Total	£-	£1,096,497	£1,096,497

Specialist Tobacconists

It is assumed that specialist tobacconists will opt for additional storage with a smaller footprint and upfront cost. This could include under counter storage or drawer units rather than additional display cabinets. It is assumed that there would not be any industry funding available for these groups. Given this, the cost of display storage units is taken as an average of £99 where under counter storage is used and £372 where additional drawer units are used. Each option is assumed equally likely and it is assumed that each store will purchase one additional storage unit, implying a final storage unit cost estimate of £235.

It is assumed that specialist tobacconists will have existing staff install the storage units rather than hiring professional contractors. It is assumed that it will take one member of staff half an hour to install a storage unit.

For the labour cost of installation, the 2025 median hourly wage has been used for ‘Shopkeepers and owners – Retail and wholesale’ of £15.44. Adjusted for non-wage labour costs this implies a final hourly labour cost of £18.37.

The total storage cost for other retailers is presented below:

Table 15: Storage Costs for Specialist tobacconists

Category	Option 1	Option 2	Option 3
Storage Unit Costs	£-	£14,130	£14,130
Labour Costs	£-	£1,102	£1,102
Total	£-	£15,233	£15,233

Other Retailers

It is also assumed that other retailers will opt for additional storage with a smaller footprint and upfront cost. This could include under counter storage or drawer units rather than additional display cabinets. It is assumed that there would not be any industry funding available for these groups. Given this, the cost of display storage units is taken as an average of £99 where under counter storage is used and £372 where additional drawer units are used. Each option is assumed equally likely and it is assumed that each store will purchase one additional storage unit, implying a final storage unit cost estimate of £235.

It is assumed that other retailers will have existing staff install the storage units rather than hiring professional contractors. It is assumed that it will take one member of staff half an hour to install a storage unit.

For the labour cost of installation, the 2025 median hourly wage has been used for ‘Shopkeepers and owners – Retail and wholesale’ of £15.44^[65]. Adjusted for non-wage labour costs this implies a final hourly labour cost of £18.37.

The total storage cost for other retailers is presented in Table 16:

Table 16: Storage Costs for Specialist tobacconists and other retailers

Category	Option 1	Option 2	Option 3
Storage Unit Costs	£-	£906,714	£906,714
Labour Costs	£-	£70,738	£70,738
Total	£-	£977,452	£977,452

Total Storage Costs

Total storage costs for each option are presented in the table below. Total storage costs range from £0 under option 1 to around £2.9 million under options 2 and 3.

Table 17: Total Storage Costs by Business Category

Business Category	Option 1	Option 2	Option 3
Bulk Suppliers and Wholesalers	£-	£48,275	£76,981
Convenience Stores and Small Shops	£-	£1,096,497	£1,096,497
Supermarkets and Large Shops	£-	£720,225	£720,225
Specialist Tobacconists	£-	£15,233	£-
Other Retailers	£-	£977,451	£977,451
Total	£-	£2,857,683	£2,871,154.68

Restocking Costs

Restocking costs would apply to retailers selling products in scope and concerns the additional cost for staff to regularly assess and replenish stock levels of products now removed from display. To estimate this cost the number of people required to assess and replace stock levels of products is multiplied by the time required to assess and replenish stock, and by the hourly wage cost. It is assumed that one person per business would be required to assess and replenish stock.

Based on the impact assessment for the Display (2010)^[66] regulations in England, it is assumed that it takes an additional one hour per week to assess and replace stock for all products in scope in this option

Given this, it is assumed that businesses that already stock tobacco products are familiar with the process of monitoring stock levels of products behind displays it has been estimated that one person would spend 30 minutes per week assessing products and replenishing stock. Whereas in businesses that only stock vaping products, nicotine products and herbal smoking products it has been assumed that they will not be as familiar with the process and therefore the restocking time would be longer. Therefore it is estimated in this scenario that one person would spend one hour per week assessing in scope products and replenishing stock.

It is assumed that there would be no restocking costs associated with option 1, as under this option the ban is limited to end of aisle and promotional displays meaning businesses would be able to stock products elsewhere in the store and restock as usual. Under options 2 and 3 restocking costs would be the same for all businesses except specialist tobacconists, who be granted exemptions from the display regulations under option 3 for herbal smoking products and heated tobacco devices and therefore not face additional restocking costs.

For the labour cost of restocking for all businesses, the 2025 median hourly wage for “Sales Assistants and Retail Cashiers” of £12.63 has been used. When adjusted for non-wage labour costs, this implies a final hourly labour cost of £15.03.

The total annual restocking cost for businesses under each option is presented below. It is estimated that the total cost to businesses is between £0 and £5.2 million annually.

Table 18: Annual Restocking costs by business category

Business Category	Option 1	Option 2	Option 3
Bulk Suppliers and Wholesalers	£-	£34,779	£34,779
Convenience Stores and Small Shops	£-	£2,506,022	£2,506,022
Supermarkets and Large Shops	£-	£563,103	£563,103
Specialist Tobacconists	£-	£34,779	£-
Other Retailers	£-	£2,048,819	£2,048,819
Total	£-	£5,187,501	£5,152,722

Price List Costs

Price list costs apply to retailers selling products in scope and includes the additional cost for staff to regularly maintain an accurate price and stock list when products are not visible. To estimate this cost the number of people required to maintain an accurate price and stock list is multiplied by the time required to maintain an accurate price and stock list, and by the hourly wage cost.

It is assumed that one person per business would be required to maintain an accurate price and stock list. Based on the impact assessment for the Display (2010)^[67] regulations in England, it is assumed that it takes an additional half an hour per month to maintain an accurate price and stock list for all products in scope in this option.. Given this, it is assumed that in businesses that already stock tobacco products one person would spend 15 minutes per month maintaining accurate price and stock lists, whereas in businesses that only stock vapes or other non-tobacco products that are in scope one person would spend 30 minutes per month maintaining accurate price and stock lists.

It is assumed that there would be no price list costs associated with option 1, as under this option the ban is limited to end of aisle and promotional displays meaning businesses would be able to stock products elsewhere in the store and monitor prices as usual. Under options 2 and 3 price list costs would be the same for all businesses except specialist tobacconists, who under option 3 will not have restrictions on the display of prices unless the display of prices can be seen from outside. Given this it is assumed that specialist tobacconists will not face additional price list costs under option 3.

For the labour cost of price lists for all businesses, the 2025 median hourly wage for “Sales Assistants and Retail Cashiers” of £12.63 has been used. When adjusted for non-wage labour costs, this implies a final hourly labour cost of £15.03.

The total annual price list cost for businesses under each option is presented below. It is estimated that the total cost to businesses is between £0 and £600,000 annually.

Table 19: Annual Price list cost by business category

Business Category	Option 1	Option 2	Option 3
Bulk Suppliers and Wholesalers	£-	£4,013	£4,013
Convenience Stores and Small Shops	£-	£289,156	£289,156
Supermarkets and Large Shops	£-	£64,973	£64,973
Specialist Tobacconists	£-	£4,013	£-
Other Retailers	£-	£236,402	£236,402
Total	£-	£598,558	£598,558

Transaction Costs

Transaction costs would apply to retailers selling products in scope to the end consumer and includes the additional cost for staff to access products no longer visible and accessible to customers. To estimate this cost the additional time required to serve customers is multiplied by the hourly wage cost, and by the number of transactions each year. Based on the Display (2010) regulations, an additional serving time of 2 seconds per transaction is used.

Unfortunately, there is limited evidence of the scale of current use and frequency of use of several of the products affected by the regulations. There is evidence on the current use of vapes in Scotland in 2024, with prevalence amongst the adult population estimated at 10%^[68]. There is also evidence for Great Britain in 2025 on heated tobacco products and nicotine pouches, with prevalence estimated at 0.7%^[69] and 1%^[70] respectively. Based mid-2024 Scotland adult population estimates of 4,650,000^[71] this implies that there are 465,000 vape users in Scotland, 32,550 HTP users and 46,500 nicotine pouch users, which assumes there is no difference in population use between Scotland and the rest of Great Britian.

It is estimated that vape users make 2 transactions per week on vape-related products^[72], implying 104 transactions per year. It is estimated that 183 transactions per year are made by heated tobacco users, based on an average consumption of 10 sticks per day^[73] , totalling 3,650 per year, sold in packs of 20, plus an additional transaction for a replacement heating device. However, heated tobacco sticks are already subject to existing tobacco display restrictions, so only a single transaction per year would be affected by increased transaction costs. We estimate 156 transactions per year for nicotine pouches, based on a consumption rate of 3 packs of nicotine pouches per week^[74].

For the labour cost of restocking for all businesses, the 2025 median hourly wage for “Sales Assistants and Retail Cashiers” of £12.63 has been used. When adjusted for non-wage labour costs, this implies a final hourly labour cost of £15.03.

It is assumed that there are no additional transaction costs under option 1, as under this option the ban is limited to end of aisle and promotional displays meaning businesses would be able to stock products elsewhere in the store and transactions would continue as usual. Under options 2 and 3 the transactions costs are assumed to be the same. It is worth noting that this estimate for transaction costs is likely to be an underestimate, as it only covers 3 products out of the several that are within the scope of the regulations. A lack of available robust evidence prevents a more complete estimate of transaction costs. Based on the available evidence, the total transaction costs per year under each option are presented below.

Table 20: Annual Transaction Cost by Product

Product	Option 1	Option 2	Option 3
Vape	£-	£403,798	£403,798
HTD	£-	£272	£272
Nicotine pouch	£-	£60,570	£60,570
Total	£-	£464,639	£464,639

Lost Profits

Lost profits would apply to any business in the supply chain of products in scope, and includes the cost of impacts on the total revenue of products in scope from a reduction in the number of people using products, which in turn reduces sales and profits. The regulations introduced are expected to reduce the number of people who use nicotine products and herbal smoking products.

In order to accurately calculate the scale of lost profits as a result of these regulations, data are required on the profit margins for the products in scope, the number of users of each product in scope, the average spend of each user for each product in scope, and the scale of reductions in use as a result of the regulations.

There is currently insufficient publicly available data concerning the above. It is also possible that a reduction in sales of the products in scope may not be associated with a direct and proportional reduction in profits for businesses. Individuals that that no longer purchase products in scope as a result of the regulations may still choose to buy other goods from impacted businesses, and therefore the total impact on profits also depends on the profit margins of these substitute goods and the rate of substitution.

Given the above, although lost profits are likely to represent a significant cost to businesses, it has not been possible to quantify the scale of these lost profits in this partial BRIA.

Total Costs

In the first year following introduction of the regulations, each business will face familiarisation costs of between £313,000 and £323,000 under each option, and options 2 and 3 will also incur storage costs of around £2.9 million, restocking costs of around £5 million, price list costs of around £600,000 and transaction costs of around £460,000. In all following years, options 2 and 3 will also be associated with restocking costs, price list costs and transaction costs in each subsequent year.

The total costs for each option are presented below. Costs occurring in each year have been aggregated and discounted over a standard 10 year appraisal period in line with Green Book guidance^[75].

Table 21: Total cost by option

Cost	Option 1	Option 2	Option 3
Familiarisation Cost	£323,218	£313,334	£313,334
Storage Cost	£-	£2,857,683	£2,871,155
Restocking Cost	£-	£48,329,899	£48,005,879
Price List Cost	£-	£5,576,527	£5,539,140
Transaction Cost	£-	£4,328,862	£4,328,862
Lost Profits	Not Yet Quantified	Not Yet Quantified	Not Yet Quantified
Total	£323,218	£61,406,305	£61,058,370

Non-Monetised Benefits

In addition to the costs to businesses identified, the regulations are also likely to be associated with benefits for the wider population of Scotland. The purpose of these regulations is to reduce the visibility, youth appeal and promotion of herbal smoking products, vaping products and nicotine products. Given this, it is anticipated that these regulations will lead to in fewer people using these products, resulting in various public benefits.

Due to the lack of evidence available on the scale of the likely reduction in sales of these products and the harms associated with them, it has not been possible to monetise wider public benefits in this partial BRIA. Quantification of wider public benefits will be considered in more detail in the future.

Although it has not been possible to estimate the scale of reduction in sales as a result of these proposed regulations, evaluation of the impacts of the 2010 tobacco display regulation provides strong rationale that display restrictions can and reduce sales of products in scope.

Work funded by the National Institute for Health Research (NIHR)^[76] developed models to assess the impact of key measures aimed at reducing smoking prevalence in England, including the display ban for both large and small shops. Overall, this research found consistent evidence that the point of sale display ban, in both large and small shops, has supported the decline in smoking prevalence amongst both adults and children.

Similarly 2012 research^[77] found that in England although the display ban implementation was not immediately associated with a step change in smoking, there was a significantly greater decrease in current smoking post-ban compared to pre-ban after controlling for sociodemographic factors, e-cigarette use and seasonality, with a reduction over and above the secular trend of 0.46% per year.

The primary non-monetised benefits that have been identified are:

• health benefits associated with reduced tobacco and nicotine product experimentation among young people
• health benefits associated with reduced tobacco and nicotine product experimentation amongst adults
• environmental benefits from reduced litter associated with fewer people using vapes
• reduced fire costs from battery powered devices
• consumer surplus

Health Benefits Associated with Reduced Tobacco and Nicotine Product Experimentation Among Young People

There are health risks associated with young people using herbal smoking products, heated tobacco, vaping and using other nicotine products. Tobacco and nicotine related devices including heated tobacco products are often marketed as a less harmful alternative to smoking cigarettes and other forms of tobacco^[78], however they can pose a significant health risk.

These regulations are expected to reduce the exposure and experimentation with herbal smoking products, heated tobacco devices, vaping products and nicotine products by young people. This could translate to reduced youth use of these products however it has not been possible to estimate the scale of this through quantitative analysis. If this were the case, these regulations could provide health benefits through the reduced uptake of these products among young people.

Health Benefits Associated with Reduced Tobacco and Nicotine Product Experimentation Amongst Adults

These regulations are anticipated to reduce the prevalence of herbal smoking products, heated tobacco devices, vaping products and nicotine products, and this would likely be associated with health gains for individuals. If so, it is anticipated that demand on health and social care would be reduced.

It has not been possible to quantify the scale of reduction in the use of these products amongst adults, and therefore it is not possible to estimate the total benefit associated with this reduction.

Environmental benefits from reduced litter associated with fewer people using vapes

With the reduction in the number of people using vapes it is likely there would be reduced litter from people disposing of vapes. Whilst the disposable vape ban has been put in place, there still could be some associated litter from reusable vapes such as the packaging, refill pods, e-liquid containers and coils.

Data on the number of reusable vapes that are littered is not available, and it has not been possible to estimate the scale of reduction of people using vaping products. However, if reduced litter does arise as a result of these regulations, there would be environmental benefits.

Reduced fire costs from battery powered devices

According to the National Fire Protection Association (NFPA)^[79] , the likelihood of lithium-ion batteries (such as those used in vaping or heated tobacco products) overheating, catching on fire, or causing explosions increases when damaged, improperly used, charged or stored. If disposed of in household waste or recycling it can cause fires in transport landfill or recyclers. If prevalence of tobacco related devices including heated tobacco, and vaping falls, it can be assumed the number of related fires may also fall. This will reduce public costs associated with fires.

Whilst it could be assumed rechargeable vapes, and heated tobacco devices are not disposed of at the same rate as disposable vapes were, there could still be a fire risk if not disposed of correctly. It is not possible to estimate the reduction in the number of battery operated devices disposed of incorrectly as a result of these regulations, but if this does arise it would be associated with a public benefit due to the lower likelihood of fires arising.

Consumer surplus

Removal of desired features can be considered as a loss to the consumer, termed as a loss of ‘consumer surplus’. However, due to the addictive nature of tobacco, nicotine and vaping products applying the concept of consumer surplus is more complex.

It is expected that rational consumers would consider a trade-off between the utility gained from use of products in scope and the health harms of using these products. Activities that make products less appealing, such as removal of display, would alter the trade-off and a lower level of product use would become optimal.

However, with addictive products such as those in scope of this legislation, from the first use, individuals can lose autonomy through addiction to nicotine. For example, many people who smoke would like to quit, and it can take many attempt to quit successfully. Therefore, the trade-off between the utility and harms of smoking may not be based on rational decisions but influenced by addiction that many would like to be free from.

In addition, for addictive goods, branding can act as a cue that can stimulate cravings. Removing this cue by removing the display of these products can help those that use the products in scope identify their true preferences of consumption.

Given these complexities around consumer surplus, measuring the impact of the restrictions on display on consumer surplus is highly uncertain.

It is acknowledged that, under “rational choice” assumptions, the removal of display may result in a loss of consumer surplus.

However, it can also be argued that becoming free of addiction improves consumer surplus. Given the level of uncertainty of the direction and scale of impact of restrictions on display on consumer surplus, it has not been quantified in this analysis.

Scottish firms’ international competitiveness

This policy is not expected to have any effect on international competitiveness.

Small business impacts

Small businesses are not exempt from the regulations in any of the options considered, and a large amount of the businesses affected are likely to be small/micro businesses, with roughly 55% of the businesses identified on the retailer register being convenience stores and small shops. In 2020 there was 3,515 active retailers registered to sell tobacco and vaping products on the retailer register as of June 2026 this has increased to 6,867. For retailers registered only to sell vaping products there has been an increase from 722 in 2020 to 1713 in 2026. ^[80]

There is limited data on how small and micro businesses will specifically be impacted, but it is possible that they will be disproportionately affected in the following ways:

• Given the assumption that profits from the sale of products in scope will decrease as a result of the regulations, businesses for which these products make up a larger proportion of profit may be disproportionately burdened. This burden is likely to be higher for vape stores, where the majority of products are assumed to be impacted by the regulations.
• Larger businesses may be more equipped to deal with regulations, whereas small businesses may need to spend a larger proportion of their time on familiarisation with the regulations and implementing changes to comply with the regulations. Non-retail businesses, such as barbers, hotels and restaurants, are likely to be the least well equipped to deal with regulations, as they are less likely to have existing counters and/or display storage space.

Investment

These proposals are expected to have a neutral impact on investment.

Workforce and Fair Work

As noted in the small business impacts above, these regulations may have a disproportionate impact on the sales and profitability of small businesses, particularly convenience stores and small retailers. As a result, they may also have implications for workforce outcomes and fair work principles.

While there are no available estimates of the number of individuals from disadvantaged groups employed in small retail and convenience stores in Scotland, UK-wide evidence provides some insight. 2025 research from the association of convenience stores^[81] indicates that people from minority ethnic backgrounds are overrepresented in this sector, accounting for 42% of the total workforce.

In addition, younger individuals are more likely to be involved in operating these businesses, with 29% of convenience store owners and operators aged 30 or under, a higher proportion than observed across the workforce as a whole. Fair work practice appears to be less prevalent in convenience stores. It is estimated that 5% of convenience store owners in the UK work more than 70 hours per week, and 19% take no holiday per year.

Given the potential for the regulations to disproportionately affect small businesses and convenience stores, there is potential for workforce and fair work impacts. However, the scale of these impacts will depend on the extent of the profit loss for these businesses which is subject to considerable uncertainty.

Climate change/ Circular Economy

The Scottish Government is committed to moving towards a circular economy, transitioning from a “take, make and dispose” model to one in which materials are valued and kept in use.

Vapes and vaping products have been a focus of previous circular economy policy measures due to the environmental impact associated with their production and disposal. An estimated 26 million vapes were thrown away in Scotland in 2023, of which more than half were not recycled properly and around 10% were littered.

The batteries used within vapes are difficult to recycle and leak harmful waste especially if littered. Vapes which are thrown in general waste will either be landfilled or incinerated and pose a fire risk for waste collection vehicles and waste transfer sites due to their lithium-ion batteries. Environmental impacts from the production and manufacture of vapes is also a concern, since they contain critical raw materials including lithium and cobalt.

Vapes are regulated under The Waste Electrical and Electronic Equipment (WEEE) Regulations 2013. This seeks to encourage the reuse and recycling of these items by placing financial responsibilities on producers and distributors of electrical and electronic equipment (EEE) to pay for the collection and disposal schemes for end-of-life products.

All producers who place EEE on the UK market, including producers of vapes, are responsible for financing the costs of the collection, treatment, recovery, and environmentally sound disposal of WEEE, with a specific product category introduced as of August 2025, and collection targets for vapes from 2026. Vape retailers must also provide in-store takeback for customers as vapes are now excluded from the Distributor Takeback Scheme (DTS) for Waste Electrical and Electronic Equipment (WEEE). Scotland has also introduced a ban on the sale and supply of single-use vapes, which came into force on 1 June 2025.

The primary aim of proposals for the regulation of the display of vaping products is to reduce the appeal of these products to young people and adult non-smokers. The environmental impact of the proposal has not been quantified, but it is expected to be positive and support existing circular economy policy objectives by reducing the visibility and appeal of products, particularly ‘on the go’ vape purchases which are more likely to be treated as disposable by consumers (even if vapes are designed for reuse). Regulation of the display of vaping products may also support broader retailer compliance with takeback and recycling requirements.

Competition Assessment

It is possible that these proposals may affect competition by disproportionately affecting small and micro businesses, impacting competition. There is limited data on how small and micro businesses will specifically be impacted, but it is possible that they will be disproportionately affected in the following ways:

• Given the assumption that profits from the sale of products in scope will decrease as a result of the regulations, businesses for which these products make up a larger proportion of total profit may be disproportionately burdened. This burden is likely to be higher for vape stores, where the majority of products are assumed to be impacted by the regulations.
• Larger businesses may be more equipped to deal with regulations, whereas small businesses may need to spend a larger proportion of their time on familiarisation with the regulations and implementing changes to comply with the regulations. Non-retail businesses are likely to be the least well equipped to deal with regulations, as they are less likely to have existing counters and/or display storage space.

Although the proposed regulations may disproportionately affect small businesses, in line with the UK Government’s approach, it was concluded that varying regulatory requirements between businesses would be inconsistent with current tobacco display restrictions, which do not differentiate based on business size.

Additionally, evidence suggests people are more likely to purchase vapes from smaller shops like newsagents than large retailers, and according to the retailer register stores and small shops account for over 50% of businesses likely to be selling the products in scope.

Therefore, limiting restrictions to larger retailers would significantly limit the Scottish Government’s ability to reduce the appeal of these products to young people and adult non-smokers.

Consumer Duty

At present these products are available in attractive displays in a full range of retail setting, including some less traditional retail settings such as hair dressers and tanning salons. The proposals are expected to reduce the appeal of these products to young people and adult non-smokers g by removing the in-store display of these products and this meets the aims of the Tobacco and Vaping Framework.

These proposals do not limit access to the broad range of nicotine products, which some adult smokers use to stop smoking, but restricts the display of these products meaning that impulse purchasing of these products is less likely to happen. These proposals are therefore expected to support consumers to be able to make informed choices about product purchases.