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Black market accounts for a quarter of tobacco  

Jump to full article: The Grocer (uk), 2012-02-24
Author: Ronan Hegarty

Intro:

More than a quarter of all tobacco smoked in the UK is either fake or smuggled - costing the country billions of pounds in lost tax revenue.

The latest figures from Japan Tobacco International show that although HMRC has enjoyed some success in tackling illicit tobacco, counterfeit and smuggled tobacco is still a major problem, with up to 27% of all tobacco smoked being non-UK duty paid.

The 5.1% duty hike expected in next month’s Budget would only prove a further catalyst for the illicit trade, it warned. “Criminal gangs would welcome another boost to their ill-gotten profits and with many cigarette packs sold in the UK now over £7, a fourth tax increase in two years will help them market their fakes to even more customers,” said JTI UK MD Martin Southgate.

The research is the first to have looked both at cigarettes and roll your own tobacco to get a clearer picture of the full scale of the illicit trade.

JTI estimates that up to 12% of cigarettes smoked in the UK are non-UK duty paid, while the figure for RYO is 50%.

The percentage of non-UK duty paid RYO tobacco has fallen dramatically in the past 10 years from a peak of 76% in 2000, but the category has grown dramatically over the same period, neutralising much of this progress.

“There is a tobacco display ban on the horizon and a consultation planned for the spring to discuss options to introduce uniform packaging. Increasing the tax just doesn’t make any sense,” argued Southgate.

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