Anti-Counterfeit Scheme for UK Tobacco Products

From 1st October 2007 all cigarette packs manufactured by the TMA’s member companies (British American Tobacco, Gallaher Ltd, Imperial Tobacco Ltd) and Philip Morris International for the UK duty paid market bear a covert security feature which will allow HM Revenue & Customs (HMRC) to instantly verify product on retailers’ shelves.

The scheme, introduced on a voluntary basis and funded by the tobacco industry, was announced in the 2007 Budget. It followed a period of extensive consultation between the tobacco industry, the TMA and HMRC – a direct result of the co-operation and dialogue that underpins the Memorandum of Understanding (MoU) between the TMA’s member companies and HMRC.

The covert feature, initially on cigarette packs and then to be incorporated onto pouches of handrolling tobacco from 1st October 2008, will allow Customs’ officers to instantly authenticate genuine product using readers being supplied by the TMA. Counterfeit products will be immediately identified and this should act as a deterrent to any retailer tempted to deal in counterfeit tobacco products.

Although instances of counterfeit cigarettes being sold in legitimate retail outlets are rare, we share HMRC’s concern that this could grow. We estimate that around 2 billion counterfeit cigarettes were successfully smuggled into the UK in 2006 and sold through informal channels such as street sellers, in markets and in car boot sales

The adoption of this anti-counterfeit scheme is an example of the effective co‑operation that exists between the UK tobacco manufacturers and HMRC in their joint efforts to reduce the level of illicit trade in tobacco products.

Notes to Editors

1. The details of the anti-counterfeit technology being employed, its suppliers and the costs of implementing the scheme are not being disclosed.

2. Counterfeit tobacco products are of variable quality and taste. They are unlikely to adhere to the rigorous standards set down by the UK Government for levels of tar, nicotine and carbon monoxide. They are also likely to contain ingredients that are not in the Department of Health’s approved additives list.

3. To avoid counterfeit products retailers should only obtain their stock from legitimate wholesalers or cash and carries. Similarly consumers should only buy tobacco products from legitimate retail outlets.

4. In 2006 cigarette consumption was estimated by TMA to be 67.5 billion – 49 billion UK duty paid plus 18.5 billion non-UK duty paid. Around 3% (2 billion cigarettes) of the total was estimated to be counterfeit.

5. HM Revenue & Customs estimate that as much as £29 billion in revenue has been lost since 2000/1 due to smuggling and crossborder shopping.