From 1 October 2026, e-liquid carries an excise duty for the first time in British history. It is called the Vaping Products Duty, it is set at a flat £2.20 per 10ml, and once VAT stacks on top, the real number landing on shelves is closer to £2.64 per 10ml.

For a category that has spent a decade as the loosely regulated younger sibling of tobacco, this is the most significant change since the TPD rules of 2016.

If your business touches vaping anywhere in the chain, as a manufacturer, importer, distributor, specialist retailer, convenience operator or forecourt, the headline rate is the least interesting part of this story. The structure of the duty is where the money is won and lost, and most operators are not modelling it properly yet.

A flat tax on volume, not on risk

The duty was originally drafted as a tiered system, with higher nicotine liquids taxed more heavily. That plan was scrapped. What replaced it is a flat rate charged purely on liquid volume, applied identically whether a bottle contains 20mg of nicotine or none at all. Zero-nicotine e-liquid is taxed exactly the same as the strongest legal nic salt.

That single design decision produces a genuinely strange outcome. The duty falls hardest on the formats the public health lobby tends to prefer, and barely touches the ones it worries about.

• Prefilled pods, the disposable-style format most associated with younger users, rise by roughly 7%. The liquid volume per pack is tiny, so the duty per pack is tiny.
• Shortfills, the larger-format bottles favoured by committed adult vapers, get hammered. A 100ml shortfill carries £22 in duty before VAT, and once you add the nicotine shots that go with it, a single bottle that once sold for under £20 can clear £40. That is an increase of up to 147%.

The most sustainable, highest-volume, least youth-appealing product on the shelf takes the biggest hit, while the convenience-led format takes the smallest. Whatever you think of the policy intent, the commercial consequence is unavoidable: product mix is now the single biggest variable in a vape business’s margin.

This is an operational problem, not a price sticker

The instinct is to treat the duty as a price rise to be passed on. It is more awkward than that, for three reasons.

First, the duty is charged at manufacture or import, not at the till. By the time stock reaches a retailer, the cost is already baked in. No compliant business can opt out, and no online seller can undercut the duty, because everyone is buying from the same post-duty cost base. The competitive advantage that some retailers have leaned on, being a few pence cheaper than the shop down the road, largely evaporates on liquid.

Second, there is a registration and compliance burden. The Tobacco and Vapes Act became law in April 2026, registrations for the Vaping Products Duty opened on 1 April 2026, and any business producing, importing or warehousing affected products needs to be inside that system. There is a transitional window for selling through pre-duty stock, which makes the autumn stockholding decision a real one. Buy too little and you miss the last cheap weeks. Buy too much of the wrong format and you are sitting on inventory the market has already moved past.

Third, the cash flow shape changes. A flat per-millilitre duty on volume rewards businesses that can forecast demand by format with some precision, and punishes those that cannot. Tying up working capital in shortfill stock that will need a 147% markup to break even is a very different bet from stocking pods that move 7%.

The market is already reformatting

Smart operators are not waiting until October to react. The category is visibly shifting towards formats that deliver the same nicotine for less taxed volume.

Longfills are the obvious winner. These are concentrated flavour bases sold in larger bottles with headroom left for the user to top up with unflavoured base, so a small taxed volume produces a much larger finished product. Subscription models for plain VG and PG base suddenly make sense, because that base is taxed too and recurring delivery smooths the cost. Even home mixing, long a niche hobby, becomes a mainstream value play once the duty makes premixed juice meaningfully more expensive per millilitre.

For any business in this space, the strategic question is no longer “how much do we add to the price”. It is “which formats do we lean into, and how fast”. The retailers who treat October as a pricing event will lose share to the ones who treat it as a product-strategy event.

Model your exposure before you commit stock

The reason the duty is so easy to underestimate is that the impact varies wildly by what you sell. A forecourt shifting prefilled pods has a very different October to a specialist shifting 100ml shortfills, and a single blended margin number hides that completely.

This is worth running properly rather than estimating on a fag packet. A free Vape Tax Calculator will show the post-duty cost of any format, so you can see the per-product impact, work out where your basket is most exposed, and plan stockholding and pricing around the formats that actually survive the change well. It takes the abstract £2.20 figure and turns it into the numbers your spreadsheet needs.

The category is not dying, it is changing shape

None of this is an extinction event. The government raised tobacco duty in lockstep with the vape duty, deliberately, to preserve the price gap that makes switching off cigarettes worthwhile. Even after October, a refillable setup remains dramatically cheaper than a smoking habit, and the demand underneath the category is not going anywhere.

What changes is which businesses are positioned to serve it. The duty rewards operators who understand format economics, hold the right stock, and communicate the change to customers with confidence rather than apology. It punishes those who assumed a flat tax would land flat across the shelf.

It will not. It lands hardest on the products that built the modern vape market, and lightest on the ones regulators are most nervous about. That is the paradox at the centre of the 2026 vape duty, and the businesses that model it early are the ones that will come out the other side with their margins intact.

The Vaping Products Duty figures cited here reflect HMRC guidance current at the time of writing. Final shelf prices will vary by brand and supplier as some manufacturers absorb part of the duty.

Anda Mwanda
Manager of Investor Relations

Good morning, ladies and gentlemen. If we can start settling down, and thank you. Good morning, again, ladies and gentlemen, and welcome to Exxaro’s 2026 Capital Markets Day. And thank you for joining us today, both in person and online. To all our shareholders, the investment community, business partners, our colleagues, we welcome you.

My name is Anda Mwanda, the Manager of Investor Relations at Exxaro, and I have the privilege of facilitating this session today. But before we begin, there’s just a brief safety announcement that we would like to make.

Please note that we have not planned any emergency drill for today. If the alarm is activated, please remain calm and wait for the Exxaro floor marshals wearing red reflective vests to lead you to the assembly point. It’s in front of the building at the parking area where the roll call will be conducted.

We will all remain at the assembly point until instructions are issued to reenter the building by an Exxaro safety official. If you feel unwell at any time, please inform your host, who will escort you to the on-site clinic for medical assistance. In the event of this situation, please note

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Some big ideas start in boardrooms. Others begin in the middle of difficult circumstances.

For Crystal Lundberg, one of the biggest ideas that shaped her life was simple: your past does not have to determine your future.

Today, Lundberg works as an Office Manager and Marketing Coordinator while continuing her education in Business Management and Digital Marketing. She has built a career around helping businesses become more organized, more efficient, and more effective in how they present themselves. But her journey started far from the business world she works in today.

Growing up in Rockford, Illinois, Lundberg faced challenges that could have easily limited her future. Instead, they helped shape the mindset that now drives her career and personal growth.

“I define success as growth, resilience, and the ability to create a meaningful life despite adversity,” Lundberg says. “Success is not only measured by accomplishments, but by the person you become throughout the journey.”

How Crystal Lundberg Turned Adversity Into Opportunity

Lundberg spent much of her childhood navigating instability. Her mother struggled with mental health challenges and addiction, leading to years spent in and out of foster care.

There were periods when consistency and structure felt impossible to find.

Yet one experience changed everything.

Around the age of eight, Lundberg was welcomed into the home of a family who cared deeply about her. They were not paid to take her in. They simply chose to help.

For the first time, she experienced a stable home environment.

“They showed me what love truly looked like,” Lundberg says. “For the first time in my life, I experienced stability, warmth, and unconditional love.”

The family attended church together, traveled during summers, and spent time at their cabin in Wisconsin. Those experiences gave her something she had never seen before: a clear vision of what a healthy and successful life could look like.

That vision became one of the first big ideas that would shape her future.

Why Education Became Crystal Lundberg’s Turning Point

Many people see education as a requirement. Lundberg saw it as a path forward.

Growing up, college did not always feel like a realistic goal. But she refused to let her circumstances define what was possible.

Instead, she committed herself to learning, improving, and creating opportunities through education.

She earned an Associate’s Degree in Business Management Administration in 2025 and completed esthetics training through Aveda. She is currently pursuing a bachelor’s degree focused on Business Management, Marketing, and Digital Marketing while also earning credits toward a master’s degree.

“Education became more than a goal for me,” Lundberg says. “It became a way to transform my future.”

Her academic journey represents more than degrees and coursework. It reflects a willingness to invest in long-term growth even when the path is challenging.

What Big Ideas Have Shaped Crystal Lundberg’s Career?

One theme appears consistently throughout Lundberg’s career: building systems that help people and organizations succeed.

In her current role, she helps manage operations, marketing initiatives, branding efforts, websites, administrative systems, and business development projects.

While many people focus only on creative ideas, Lundberg enjoys bringing structure to those ideas so they can become reality.

“I naturally thrive in environments where I can combine business strategy with creativity and innovation,” she says.

That combination has become one of her strengths.

Marketing requires creativity. Operations require organization. Business development requires vision. Lundberg enjoys working at the intersection of all three.

Her work reflects a belief that success is often created through small improvements made consistently over time.

“I believe consistency is more important than perfection,” she says.

That philosophy has influenced how she approaches projects, goals, and professional development.

What Skills Matter Most in Business and Marketing?

As someone working in both management and marketing, Lundberg believes adaptability has become one of the most important skills in today’s business environment.

The digital world changes quickly. Consumer behavior changes. Technology changes.

People who continue learning are often best positioned to grow.

“Marketing is constantly evolving, especially in the digital space, so being willing to learn and grow is essential,” Lundberg says.

She also believes strong branding goes beyond visuals and messaging.

“Creativity is equally important because strong branding and marketing require the ability to connect with people emotionally and strategically.”

Along with creativity, she points to leadership, communication, integrity, and professionalism as qualities that help create long-term success.

The Mindset Behind Crystal Lundberg’s Success

One reason Lundberg’s story resonates is because it is ultimately about transformation.

Rather than allowing difficult circumstances to become permanent limitations, she used them as motivation to keep moving forward.

Her approach to goals reflects that mindset.

“I start by identifying long-term goals and then break them down into smaller, achievable short-term steps,” she says.

When challenges appear, she focuses on perspective rather than fear.

“In moments of self-doubt, I remind myself how far I have already come and everything I have overcome.”

Today, Lundberg continues building her career while pursuing higher education and exploring new opportunities in business development, branding, marketing strategy, and entrepreneurship.

Her story is not about overnight success. It is about the power of a simple idea pursued consistently over time: that growth is possible regardless of where someone begins.

“I believe growth should never stop,” Lundberg says. “I am always striving to become a better version of myself.”

For Crystal Lundberg, that idea has not only shaped her life. It continues to shape the career she is building today.