Crackdown: Vape maker Chill Brands lost almost a third of its value after Rishi Sunak announced ban on disposable products
Shares in London-listed vaping companies took a hit yesterday after Rishi Sunak announced a ban on disposable products.
Vape maker Chill Brands lost almost a third of its value as its shares fell 30%, wiping £4.6m from its value and leaving it with a market capitalization of just over £12m of pounds sterling.
Shares of Supreme also fell about 2 percent in the early morning before rebounding in the afternoon when the company claimed it was “ahead of the curve” when it comes to regulatory changes.
The Prime Minister has outlined plans which he hopes will stamp out the growing number of young people taking up the habit.
Recent data suggests the number of children vaping has tripled in the past three years, with 9% of 11 to 15-year-olds using the devices.
As well as banning disposable vapes, the government also announced it would introduce restrictions on flavours, colored packaging and the way vapes are presented in stores.
This is a real headache for producers and distributors who will have to adapt to the changes.
“In fact, investors are saying there is a major risk to profits, whether it is Sunak’s latest announcement or the general direction the government is taking to stop young people taking up the habit of vaping ” said Russ Mould, analyst at AJ Bell.
Chill Brands argued that its products, equipped with charging ports, should not be classified as disposable. Top bosses welcomed the announcement after taking “a number of proactive steps” in recent months.