VIP Enters Administration

Posted 21st March 2017 by Dave Cross
The VIP electronic cigarette company has entered administration as a result of defaulting on a debt. The 256 current employees face an uncertain future after its American owner failed to assist the company to meet its bill from HM Revenue & Customs.

The company hit the headlines back in 2014 when they tried to encourage smokers to “Switch to the great taste of VIP.” The advert was initially restricted to air after the 9pm watershed, but following a large number of complaints it was banned until after 11pm. Then, following cuts to the more suggestive sections, it was found to still be in contravention of three sections of the advertising code and banned altogether.

Most people’s problems appeared to lie in a depiction of the model in the ad being “overtly sexual” and therefore offensive. This didn’t bother Miguel Corral and David Levin, co-founders of the company, as it helped to raise their profile and banked the pair £30-million from American firm Victory Electronic Cigarettes Corporation, now known as Electronic Cigarettes International Group (ECIG).

Until recently, it was considered to be a leading ecig brand, with the 265 staff spread across 165 shops across the UK. Appearances can be deceptive and, by the holding company’s own admission, VIP had severely underperformed in its home market.

The owners, Electronic Cigarettes International Group’ CEO Dan O’Neill explained that the £2.5 million tax bill led to VIP (Must Have Ltd) entering administration: “Despite multiple attempts to satisfy the tax obligation and other expected near term obligations, the company is unable to continue to fund the operations or any obligations of Must Have Ltd. Based on the administration process in the United Kingdom we will be evaluating the strategic alternatives available for the future of the company. Legacy financial commitments and MHL’s underperformance in the UK prevented the subsidiary from meeting its financial obligations.”


ECIG have made clear they hold no intention of settling the outstanding tax bill; entering administration has loaded an extra £85 million of accounting debt onto the British subsidiary. It is now up to FRP Advisory to see if it can negotiate a sale to protect the at-risk jobs. Anthony Collier, a partner at the business advisory company, said: “Historically the business has been profitable and cash generative and we are seeking to continue to trade the business while a purchaser is sought and invite interested parties to contact the administrators.”

 Dave Cross
Article by Dave Cross
Freelance writer, physicist, karateka, dog walker
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