Can Supreme (LSE:SUP) Turn The Incoming Vaping Duty Into An Advantage?
Supreme aims to turn the UK's incoming vaping duty into an advantage by squeezing illicit trade and leveraging its scale.Summary
Supreme PLC (LSE:SUP) faces the UK's Vaping Products Duty, set to take effect in October, which introduces a flat-rate tax on vaping liquids and a stamp scheme to identify compliant products. The Manchester-based distributor supports measures to curb underage vaping and argues the duty could weaken illicit trade, benefiting established distributors with compliant supply chains. Supreme reported record annual revenue driven by acquisitions including SlimFast and Clearly Drinks, with its drinks and wellness division expanding sharply. Despite the disposable vape ban, vaping sales grew and the company retained its major retail customers, highlighting its strong distribution network. Its strategy of acquiring established consumer brands and distributing them through retail relationships broadened its revenue base. Smaller peers like Chill Brands Group (LSE:CHLL) face the same regulatory landscape with far less scale, potentially widening the competitive gap. Investors should monitor early post-duty sales data, pricing decisions, integration of recent acquisitions, and management's communication of duty impacts in upcoming trading updates.
(Source：Kalkine Media)
