Counterfeit Tobacco – Don’t buy it!

In support of World Anti-Counterfeiting Day on the 11th June 2009, Christopher Ogden, Chief Executive of the Tobacco Manufacturers’ Association (TMA), said:

“All smuggled tobacco poses a serious threat to legitimate manufacturers and retailers. Although they may be tempted by a cheaper product, we urge smokers not to buy it. They may also be, unwittingly, purchasing counterfeit, the contents of which are unregulated and unknown. They could also be indirectly funding organised crime, including terrorism, drugs and people trafficking.”

“At a time of economic uncertainty, rising unemployment and high taxes, cheaper, unregulated counterfeit products are now even more appealing to the consumer. In the UK a pack of legitimate premium cigarettes costs around £5.85 per pack and tax can account for up to 90% of the retail price of some tobacco brands. This selling price can be compared to around £2.50 – £3.00 per pack for a counterfeit product, which is not taxed.  Although instances of counterfeit cigarettes being sold in legitimate retail outlets are rare, we share the Government’s concern that this could grow during the recession. According to HM Revenue & Customs (HMRC) counterfeit products accounted for 51% of large scale cigarette seizures in 2007/08(1) .

“The TMA and its member companies, following extensive consultation with HMRC, have voluntarily introduced an anti-counterfeiting scheme, designed to detect counterfeit products in the retail network. The introduction of this scheme is a prime example of the effective co-operation that exists between the UK tobacco manufacturers and HMRC to address all aspects of the illicit trade in tobacco products.

“However, efforts to reduce the illicit trade could be seriously undermined by the Government’s intention to ban tobacco displays in shops. A ban on the display of products will blur the distinction between the legal and illegal market by virtue of it all being ‘out of sight’. This will seriously hinder anti-smuggling operations.

“A ban will incentivise criminal counterfeiters and smugglers, who do not ask for proof of age, and therefore expose more young people to illicit tobacco products. In 2007, a survey from Trading Standards North West found that 28% of 14 to 17 year olds had bought counterfeit cigarettes(2). We urge the Government not to unintentionally encourage this illegal trade by banning tobacco products at the point of sale.”

1 HMRC Departmental Autumn Performance Report 2008 (large scale = 100,000+)

2 Trading Standards North West – Smoking Survey of Young People September 2007

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For further information and/or interviews please contact:
Zöe Walker, Corporate Affairs Manager
t: 020 7544 0111  m: 07790 060041 e: zwalker@the-tma.org.uk

Notes to Editors:
1. The TMA is the trade association for tobacco companies that operate in the UK. Our members are British American Tobacco UK Ltd (www.bat.com), Gallaher Ltd (a member of the JTI Group of companies – www.jti.com), and Imperial Tobacco Ltd. (UK). (www.imperial-tobacco.com)

2. The illicit tobacco market cost the Treasury up to £3.1 billion in lost tax revenue in 2006/07 (with up to £36 billion being lost since records began in 1996).

3. Smokers are being cheated by counterfeit products, which are of variable quality and taste.  It is unlikely that counterfeit products will adhere to the rigorous standards set down by the UK Government for levels of tar, nicotine and carbon monoxide.  They might also contain ingredients that are not listed in the DH’s approved additives list http://http://www.dh.gov.uk/ab/SCOTH/index.htm/.

4. The Memorandum of Understanding (revised in 2006) between the TMA’s member companies and HMRC creates a comprehensive framework for co-operation. Under the MoU both industry and HMRC work together to share intelligence and identify and implement measures to tackle the illicit trade.

5. Since 1 October 2007 all cigarette packs manufactured for the UK duty paid market by the TMA’s member companies (British American Tobacco, Gallaher Ltd, Imperial Tobacco Ltd) and Philip Morris International bear a covert security mark which allows HMRC and Trading Standards Officers to check the legality of product on retailers’ shelves. The covert feature was incorporated onto handrolling tobacco from 1st October 2008.

6. Further information on anti-counterfeiting activities can be found on the TMA’s website www.the-tma.org.uk/counterfiet_cigarettes.aspx/.