“The TMA and its member companies welcome the reduction in illicit tobacco volumes, as reported in the latest HMRC Measuring Tax Gaps report. Nevertheless, the fact that up to 16% of cigarettes and 50% of RYO is smuggled, losing revenue of £3.1 billion, clearly shows it is still a very serious issue.

“In addition, it should be noted that these figures refer to 2009/10, and since then tobacco taxation has increased markedly, leading to the price of cigarettes rising by as much as £1.00 per 20.

”High tobacco taxes are an acknowledged driver of this illegal trade and there is widespread concern that the increases imposed over the past 18 months will lead to a rise in this criminal activity.”

Mr Ogden added:

”As part of the Tackling Tobacco Smuggling Strategy the tobacco industry continues to work closely with HMRC , the reduction in the illegal trade is a sign that this partnership is producing results. However, this could be undermined by the Government’s tobacco tax policy which will see duty rise by a further 2% above inflation each year until 2014.”

- ENDS -

For further information\interviews, please contact:

Zöe Walker, Corporate Affairs Manager
t: 020 7544 0111 m: 07872 376748
e: zwalker@the-tma.org.uk

Notes to Editors:

1. The TMA is the trade association for tobacco companies that operate in the United Kingdom. Our members are British American Tobacco UK Ltd, Gallaher Ltd (a member of the JTI Group of companies) and Imperial Tobacco Ltd.

2. The Tackling Tobacco Smuggling strategy was unveiled in March 2000, with further revisions taking place in March 2006, November 2008 & April 2011

3. A typical pack of 20 cigarettes costs £7.09 in the UK against around £3.25 in Spain and £2.25 in Poland. The UK has the second highest cigarette taxation in the European Union, behind the Republic of Ireland

4. A 50gr pouch of handrolling tobacco costs £14.48 in the UK against £4.70 in Belgium

5. HM Revenue & Customs Measuring Tax Gaps Report 2011 revealed that up to £3.6 billion in revenue was lost through smuggling and crossborder shopping in tobacco products in 2009/10.

6. Further information can be found on the TMA’s website – www.the-tma.org.uk

Since the Tackling Tobacco Smuggling (TTS) strategy was introduced in 2000 the level of tobacco smuggling has been reduced but it still poses a significant threat. According to latest available figures from HMRC, smuggling continues to account for up to 17% of cigarette and 59% of handrolling tobacco consumption, resulting in a loss of up to £3.1 billion to HM Treasury.

Christopher Ogden, Chief Executive of the Tobacco Manufacturers’ Association (TMA), said:

“We very much welcome the Government’s commitment to cracking down on those who operate in the illicit tobacco market and we are pleased that the refreshed strategy acknowledges the importance of working with the TMA and its member companies.

“As part of the review we have been working with HMRC to look at ways to better understand the composition of the illicit tobacco market, the impact of taxation on consumption, intelligence sharing, communications campaigns and behavioural insight. Therefore, we welcome today’s report as it recognises our ongoing commitment and strong working relationship in this area.

”However, January’s increase in VAT and the subsequent tax hike at the Budget, has led to cigarette prices increasing by as much as 66 pence for a pack of 20 (87 pence on a 25gr of handrolling) and this will only incentivise smokers to seek cheaper illicit products and provide a greater profit motive for organised criminals to smuggle.

“The illicit tobacco market will continue to provide significant challenges but we look forward to a stronger working relationship with Government and law enforcement agencies in addressing this problem.”

- ENDS -

For further information\interviews, please contact:

Paul Stockall, Tax & Information Manager
t: 020 7544 0113 m: 07545 440700
e: pstockall@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 Memorandum of Understanding (MoU) signed in March 2006 between the TMA’s member companies and HM Revenue & Customs create a comprehensive framework for co-operation aimed at combating the smuggling of both genuine and counterfeit tobacco products into the UK as well as seeking to deter all aspects of the illicit trade in tobacco products.

To supplement the MoU, key elements of the agreement have been enshrined in legislation (The Tobacco Products Duty Act 1979, as amended by the Finance Act 2006) so that any tobacco company, operating anywhere in the world, is under the same obligations as the TMA’s member companies to ensure that it does not allow its products to be smuggled.

The refreshed Tackling Tobacco Smuggling Strategy provides for agreement in principle to an update of the MoUs which will be announced in due course

3. A typical pack of 20 cigarettes costs £6.95 in the UK against around £3.15 in Spain and £2.25 in Poland.

4. The UK has the second highest cigarette taxation in the European Union, behind the Republic of Ireland.

5. HM Revenue & Customs Measuring Tax Gaps Report 2010 revealed that up to £3.8 billion in revenue was lost through smuggling and crossborder shopping in tobacco products in 2008/09.

6. Since 2000/1 HMRC estimate that over £40 billion in revenue has been lost because of smuggling and crossborder shopping.

7. Further information can be found on the TMA’s website – www.the-tma.org.uk.

Mark Garnier MP, Treasury Select Committee member, said: “I welcome the thoughts and contributions of many stakeholders attending today’s summit on illicit trade. The cost to the taxpayer of this tax evasion, as well as small businesses in particular, must not be tolerated. The summit will help the Government in ensuring these businesses remain not just viable but successful and that the British taxpayer does not lose out on revenue which is important in the battle to fix our broken economy.”

HM Revenue & Customs said: “The Government takes tobacco smuggling very seriously. HMRC is cracking down on tax fraud, including duty evasion from illegal, smuggled tobacco. The government has made a further £900 million available to us to tackle evasion, avoidance and attacks by criminal gangs. We will use this money to increase tax revenues by £7billion a year by 2014/15.”

At the summit, hosted by think-tank Progressive Vision, an audience of government and law enforcement officials, retailers, manufacturers and other key stakeholders explored measures for a new and co-ordinated approach to tackling and raising awareness of tobacco smuggling.

The latest adult smokers’ survey revealed, during this period of economic uncertainty, that 30% of cigarette smokers and 45% of hand rolled tobacco smokers admit they don’t always buy their tobacco products from UK shops:

· Around 45% of adult smokers are aware of smuggled tobacco being sold in their area but only 10% of those who are aware have reported it to the authorities in the past 12 months.
· More than 20% of adult smokers are considering purchasing tobacco from non-retail sources, such as friends and street sellers, compared to 4.5% who are less likely.
· Over 60% of those polled believe that tobacco smuggling will worsen over the next 12 months.
· Over 60% of adult smokers agree that imposing higher fines on rogue retailers who sell illicit products is an effective method of tackling the issue.

Christopher Ogden, TMA Chief Executive, commented, “The survey clearly shows that many smokers are aware of the vibrant market in illicit tobacco. A major concern is that the criminals making these sales don’t care whom they sell to and as a result many under the legal age gain access to illicit tobacco. Smugglers are innovative and relentless at finding new ways to infiltrate the market and we welcomed the Coalition Government’s recent announcement of additional funding to tackle tax evasion. The tobacco industry has been fully committed to tackling this problem for many years and the Memoranda of Understanding (MoU) between the TMA’s member companies and HMRC have created a comprehensive framework for co-operation.

“More recently we have provided anti-counterfeit technology to enable law enforcement bodies to readily identify whether tobacco products are genuine or not. As an industry we continue to fully support HM Revenue & Customs, UK Border Agency and Trading Standards in their enforcement activity against tobacco smuggling. Today’s summit has provided a platform for closer co-operation between all stakeholders in the future.”

For further information please contact:

Dirk Vennix, Director of Communications
t: 020 7544 0115 m: 07790 060041
e: dvennix@the-tma.org.uk

Zöe Walker, Corporate Affairs Manager
t: 020 7544 0111 m: 07872 376748
e: zwalker@the-tma.org.uk

Notes to Editors:

1/ The TMA is the trade association for tobacco companies that operate in the United Kingdom. Our members are British American Tobacco UK Ltd, Gallaher Ltd (a member of the JTI Group of companies) and Imperial Tobacco Ltd.

2. The illicit trade summit is being hosted by Progressive Vision between 10 am and 4.30 pm on Monday 31 January 2011 at the National Liberal Club, 1 Whitehall Place, London, SW1A 2HE.

3. The smokers’ survey, conducted by Holden Pearmain for the TMA, asked 1,000 adult smokers about their views on tobacco smuggling in December 2010.

4. HM Revenue & Customs (HMRC) estimates that in 2008/09 up to 22% of cigarette and up to 61% of hand rolling tobacco consumption was non-UK duty paid (HMRC Measuring Tax Gaps, 2010).

5. The non-UK duty paid market cost the Treasury up to £3.8 billion in lost tax revenue in 2008/09, equivalent to over £ 10 million per day (HMRC, 2010). Since 2000/1 HMRC estimates that up to £45 billion in revenue has been lost.

6. A typical pack of 20 cigarettes cost £6.63 in the UK against around £3.15 in Spain and around £2.00 in Poland. The UK has the second highest cigarette taxation in the European Union, behind the Republic of Ireland.

7. Further information about the issue of tackling tobacco smuggling can be found on the TMA’s website

It comes at a time when an adult smokers’ survey reveals that 30% of cigarette smokers and 45% of hand rolled tobacco smokers admit they don’t always buy their tobacco products from UK shops.

The TMA’s smokers survey also shows that during this period of economic uncertainty:

• Around 45% of adult smokers are aware of smuggled tobacco being sold in their area but only 10% of those who are aware have reported it to the authorities in the past 12 months.

• More than 20% of adult smokers are considering purchasing tobacco from non-retail sources, such as friends and street sellers, compared to 4.5% who are less likely.

• Over 60% of those polled believe that tobacco smuggling will get worse over the next 12 months.

• Over 60% of adult smokers agree that imposing higher fines on rogue retailers who sell illicit products is an effective method of tackling the issue.

Christopher Ogden, TMA Chief Executive, commented, “The survey clearly shows that many smokers are aware of the vibrant market in illicit tobacco. A major concern is that the criminals making these sales don’t care whom they sell to and as a result many under the legal age gain access to illicit tobacco. Smugglers are innovative and relentless at finding new ways to infiltrate the market and we welcome the Coalition Government’s recent announcement of additional funding to tackle tax evasion. As an industry we continue to fully support HM Revenue & Customs, UK Border Agency and Trading Standards in their enforcement activity against tobacco smuggling.”

Christopher Ogden added: “The tobacco industry has been fully committed to tackling this problem for many years and the Memoranda of Understanding (MoU) between the TMA’s member companies and HMRC have created a comprehensive framework for co-operation. This is aimed at combating the smuggling of both genuine and counterfeit tobacco products into the UK as well as seeking to deter all aspects of the illicit trade. More recently we have provided anti-counterfeit technology to enable law enforcement bodies to readily identify whether tobacco products are genuine or not. We hope today’s summit will provide a platform for closer co-operation between all stakeholders in the future.”

At the summit, which is being hosted by think-tank Progressive Vision, an audience of government and law enforcement officials, retailers, manufacturers and other key stakeholders will explore measures for a new and co-ordinated approach to tackling and raising awareness of tobacco smuggling.

- ENDS -

For further information please contact:

Dirk Vennix, Director of Communications
t: 020 7544 0115 m: 07790 060041
e: dvennix@the-tma.org.uk

Zöe Walker, Corporate Affairs Manager
t: 020 7544 0111 m: 07872 376748
e: zwalker@the-tma.org.uk

Notes to Editors:

1/ The TMA is the trade association for tobacco companies that operate in the United Kingdom. Our members are British American Tobacco UK Ltd, Gallaher Ltd (a member of the JTI Group of companies) and Imperial Tobacco Ltd.

2. The illicit trade summit is being hosted by Progressive Vision between 10 am and 4.30 pm on Monday 31 January 2011 at the National Liberal Club, 1 Whitehall Place, London, SW1A 2HE.

3. The smokers’ survey, conducted by Holden Pearmain for the TMA, asked 1,000 adult smokers about their views on tobacco smuggling in December 2010.

4. HM Revenue & Customs (HMRC) estimates that in 2008/09 up to 22% of cigarette and up to 61% of hand rolling tobacco consumption was non-UK duty paid (HMRC Measuring Tax Gaps, 2010).

5. The non-UK duty paid market cost the Treasury up to £3.8 billion in lost tax revenue in 2008/09, equivalent to over £ 10 million per day (HMRC, 2010). Since 2000/1 HMRC estimates that up to £45 billion in revenue has been lost.

6. A typical pack of 20 cigarettes cost £6.63 in the UK against around £3.15 in Spain and around £2.00 in Poland. The UK has the second highest cigarette taxation in the European Union, behind the Republic of Ireland.

7. Further information about the issue of tackling tobacco smuggling can be found on the TMA’s website
8. Further information about Progressive Vision can be found on Progressive Vision

“Tobacco smuggling is a widespread problem in Scotland. It undermines law-abiding businesses, funds other forms of organised crime and it deprives the Treasury of up to £3 billion per annum, at a time when the government can ill afford to be losing these revenues.

”We very much welcome, therefore, the BBC programme ‘Smoking & the Bandits’, as the public should be made more aware of the issues surrounding the illicit trade in tobacco. However, we are deeply concerned that the Coalition Government’s decision to raise VAT in January and a proposed above inflation duty increase at the forthcoming Budget will serve only to encourage higher levels of smuggled product and associated criminality. This will in turn undermine the co-ordinated steps that HM Revenue & Customs and the tobacco manufacturers have been taking to tackle this problem.”

– ENDS -

For further information/visuals/interviews, please contact:

Dirk Vennix, Director of Communications
t: 020 7544 0111 m: 07872 376748
e: e: dvennix@the-tma.org.uk

Notes to Editors:

1/ The TMA is the trade association for tobacco companies that operate in the United Kingdom. Our members are British American Tobacco UK Ltd, Gallaher Ltd (a member of the JTI Group of companies) and Imperial Tobacco Ltd.

2/ A typical pack of 20 cigarettes cost £6.63 in the UK against around £3.10 in Spain and less than £2.00 in Poland.

3/ The UK has the second highest cigarette taxation in the European Union, behind the Republic of Ireland.

4/ BBC One Scotland broadcast Smoking & the Bandits on 19 January 2011. It can be viewed temporarily on BBC iPlayer

“On the 1 January 2010 the Government imposed the largest tax increase on tobacco products in ten years and now, less than 3 months later, taxes are to rise again. We question why HM Treasury would impose a 7% increase in such a short period, when latest HM Revenue & Customs figures show that up to 24% of the cigarette market, and 63% of the handrolling market still avoids UK duty, costing the Treasury as much as £11 million per day in lost revenue (1). Today’s announcement will only provide further stimulus to those who seek to profit from the illicit trade in tobacco.

”The Irish Government recognised that tax increases were driving the illicit trade in tobacco and therefore chose not to raise duties at their Budget in December 2009. The Chancellor should have followed their example.”

The TMA’s concerns are supported by research from CEBR (2), which clearly shows that the Government decision will lead to an immediate increase in smuggling and associated criminality, threatening the viability of retailers and impacting on the economy as a whole. It will also undermine the positive work that the TMA and its member companies have undertaken with HMRC to combat the smuggling of both genuine and counterfeit tobacco products.

Mr Ogden added:

“In spite of this evidence, the Government are persisting with this ill-conceived tax measure, which will delight the smugglers.”

(1) HM Revenue & Customs Measuring Tax Gaps 2009 (March 2010 – Revised)
(2) Estimating the impact of a tax increase on the legal and illicit tobacco markets, Centre for Economics and Business Research ltd, October 2009

- ENDS -

For further information,interviews and a chart showing the relationship between Budgetary tax increases and non-UK duty paid consumption, please contact:

Zöe Walker, Corporate Affairs Manager                         Dirk Vennix, Director of Communications
t: 020 7544 0115 m: 07790 060041                               t: 020 7544 0111 m: 07872 376748
e: zwalker@the-tma.org.uk                                             e: dvennix@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. Prior to the Budget a typical pack of 20 cigarettes cost £6.13 in the UK against around £2.80 in Spain and less than £1.75 in Poland.

3. The UK has the second highest cigarette taxation in the European Union, behind the Republic of Ireland.

4. HMRC released revised figures in March 2010, which show that up to £4.0 billion in revenue was lost through smuggling and crossborder shopping in tobacco products in 2007/08.

5. Since 2000/1 HMRC estimate that up to £38 billion in revenue has been lost.

6. Further information can be found on the TMA’s website – www.the-tma.org.uk.

“Independent research[1]that was presented to the Treasury in October predicts that smuggling will increase by 15% and up to an additional £300 million in revenue will be lost to the illegal market as a result of this tax increase. In spite of this evidence, the Government have decided to allow this potentially disastrous tax hike.”

“When VAT was reduced in December 2008, tobacco and alcohol excise duties were increased to leave prices broadly unchanged. However, when VAT returns to 17.5% on New Year’s Day, there will not be a compensatory reduction in these excise duties. So this is not just a VAT increase, it is effectively a tax on a tax.

“As a result, the price of a pack of 20 cigarettes will rise by up to 18 pence, the largest single increase in ten years. We are extremely worried that this “stealth tax” will increase tobacco smuggling and organised crime, especially against a backdrop of rising unemployment and falling incomes, and the independent research supports this view.

Since 2001, a policy of gradual tax increases in line with inflation, combined with a positive working relationship between TMA member companies and enforcement agencies has seen consumption of products not paying UK taxes gradually fall. However, according to HM Revenue & Customs, up to 23% of the cigarette market and 61% of the hand rolling market are avoiding UK taxes, costing the Government up to £10 million per day in lost revenue.

Mr Ogden added:

“There is an alarming increase in new forms of smuggled product. Counterfeit cigarettes and “cheap whites”[2] have a typical street price of £2.50 per pack, less than half that of legitimate brands. We are worried that this latest “stealth tax” will enable criminals to increase their sales of cheap tobacco even more. In light of all the evidence we strongly urge the Chancellor to adopt the approach recently taken by the Irish Finance Minister[3] and freeze tobacco taxes rather than raise them even higher.”

[1] Estimating the impact of a tax increase on the legal and illicit tobacco markets, Centre for Economics and Business Research ltd, October 2009

[2] HMRC defines “cheap whites” as brands produced by smaller, overseas manufacturers that make no legitimate supplies of any tobacco products to the UK. There is often little or no legitimate market for these brands anywhere in the world. Effectively, these products – commonly known as “cheap whites”– are produced for smugglers.

[3] During his Budget speech on the 10 December 2009, the Irish Finance Minister Brian Lenihan stated: “I have decided not to make any changes to excise on tobacco in this Budget because I believe the high price is now giving rise to massive cigarette smuggling.”

- ENDS -

For further information and/or interviews please contact:

Dirk Vennix, Director of Communications t: 020 7544 0109 m: 07872 376748
e: dvennix@the-tma.org.uk or
Zoe Walker, Corporate Affairs Manager t: 020 7544 0115 m: 07790 060041
e: zwalker@the-tma.org.uk

Notes to Editors:

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)
HMRC figures released at last year’s PBR showed that in 2007/08 up to £3.7 billion in revenue was lost through smuggling and crossborder shopping in tobacco products and over the last ten years these losses exceed £45 billion.
The UK has the second highest cigarette taxation in the European Union, behind the Republic of Ireland. Despite a stronger exchange rate and a substantial excise increase in June 2009, cigarette retail prices in Spain are still less than half of those in the UK.
The Memoranda of Understanding (MoU) between the TMA’s member companies and HMRC creates a comprehensive framework for co-operation aimed at combating the smuggling of both genuine and counterfeit tobacco products into the UK as well as seeking to deter all aspects of the illicit trade in tobacco products. Under the MoU there is an undertaking that both industry and HMRC will work together to identify and assess technologies that could be of benefit in tackling the trade in illicit tobacco products – the introduction of covert anti-counterfeit technology is a prime example of the benefit of the MoU approach in identifying particular concerns and quickly arriving at effective solutions.
Further information can be found on the TMA’s website – www.the-tma.org.uk.
——————————————————————————–

“When VAT was temporarily reduced in December 2008, tobacco and alcohol excise duties were increased to compensate, leaving prices broadly unchanged. However, when VAT returns to 17.5%, there will not be a compensatory reduction in excise duty. Therefore, the raising of VAT from 1 January will have a unique impact on the tobacco and alcohol sectors. It will lead to increases of between 13-18 pence on a pack of cigarettes, representing the largest single tax increase since March 2000, when smuggling was at its peak. Not only will this increase be significantly above inflation, but it will also take place against a backdrop of rising unemployment and falling incomes, providing further incentives to criminals to illegally import and distribute cheap tobacco to adult smokers and potentially children.

“Our fears are supported by independent research , which clearly shows that the Government decision will lead to a significant increase in smuggling and associated criminality, threatening the viability of retailers and impacting on the economy as a whole. In spite of this evidence, which was presented to the Treasury in October, the Government are persisting with this ill-conceived tax measure.

Since 2001, a policy of fiscal restraint, combined with greater enforcement has seen levels of non-UK duty paid (NUKDP) consumption gradually fall. However, the TMA estimates that 24% of the cigarette market and 62% of the handrolling market is still NUKDP, and within the NUKDP market there has been a noticeable increase in counterfeit product and the appearance of ‘cheap whites’ .

The TMA believes that the high level of tobacco tax, the root cause of the high level of tobacco smuggling, needs to be addressed and a fundamental review of fiscal policy must be undertaken. Raising tobacco taxation above the rate of inflation is counter productive and will only increase smuggling. Evidence from the UK‘s recent history proves this point.

Mr Ogden added:

“We strongly recommend that the Government reverses this tax increase at the next Budget, otherwise the expected surge in illicit trade will undo all the hard work that the TMA’s member companies and enforcement agencies have undertaken in recent years in tackling the illicit trade in tobacco.”

- ENDS -

For further information and/or interviews please contact:

Zöe Walker, Corporate Affairs Manager
t: 020 7544 0115 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. HMRC figures released at last year’s PBR showed that in 2006/07 up to £4.1 billion in revenue was lost through smuggling and crossborder shopping in tobacco products and over the last ten years these losses exceed £45 billion.

3. The UK has the second highest cigarette taxation in the European Union, behind the Republic of Ireland. Despite a stronger exchange rate and a substantial excise increase in June 2009, cigarette retail prices in Spain are still less than half of those in the UK.

4. The Memorandum of Understanding (MoU) between the TMA’s member companies and HMRC creates a comprehensive framework for co-operation aimed at combating the smuggling of both genuine and counterfeit tobacco products into the UK as well as seeking to deter all aspects of the illicit trade in tobacco products. Under the MoU there is an undertaking that both industry and HMRC will work together to identify and assess technologies that could be of benefit in tackling the trade in illicit tobacco products – the introduction of covert anti-counterfeit technology is a prime example of the benefit of the MoU approach in identifying particular concerns and quickly arriving at effective solutions.

5. Further information can be found on the TMA’s website – www.the-tma.org.uk.

“ The TMA completely agrees with the Government that children should not smoke and should be actively discouraged from doing so. The TMA is a principal stakeholder in CitizenCard (www.citizencard.com), the UK’s leading proof-of-age scheme [1.8m cards issued] and the No ID, No Sale (www.noidnosale.com) campaign operated by CitizenCard which promotes all PASS accredited (Government approved) Proof of Age / ID schemes.
“The key issue is that retailers must be able to establish the age of any potential customer before a sale is made. We fully support sanctions against those retailers who sell to young people, and welcome stronger enforcement of the law to prevent underage sales.
“The NINS campaign has engaged over 130,000 retailers nationwide and created a culture in which young people expect to be asked to prove their age, and in which retailers accept only the correct ID.
“The TMA welcomes all new initiatives to combat illegal sales, especially the deep-rooted problem of tobacco smuggling, and we also applaud the recent successes of HM Revenue & Customs (HMRC) and the UK Border Agency (UKBA) in making significant seizures of illicit tobacco.”

“The tobacco industry has been fully committed to tackling this problem for many years and the Memoranda of Understanding (MoU) between the TMA’s member companies and HMRC have created a comprehensive framework for co-operation. This is aimed at combating the smuggling of both genuine and counterfeit tobacco products into the UK as well as seeking to deter all aspects of the illicit trade. More recently we have provided anti-counterfeit technology to enable law enforcement bodies to readily identify whether tobacco products are genuine or not.”

There is particular concern over the Government’s proposed legislation to ban tobacco displays in shops. The serious unintended consequences of this proposal have been ignored by the government. We believe, as recent evidence in Ireland proves, with the seizure of significant quantities of counterfeit cigarettes of the top two brands in Ireland complete with dual language and pictorial health warnings as well as tax stamps, that organised crime will exploit the display ban. The legislation will make illicit, unregulated tobacco products easier to sell.

Christopher Ogden added:

“Smugglers are innovative and relentless, finding new ways to infiltrate the market as demonstrated by ‘Cheap Whites’ [2] that are now appearing on UK streets. In addition, those operating in the illicit market show no concern for those they sell to and as a result many under the legal age gain access to illicit tobacco.“

“What we need now is a multi-agency approach. We wish to engage with all relevant stakeholders, including LACORS and the public health community, with whom we have a common cause in meeting the challenge of tackling tobacco smuggling. To this end we shall be liaising further with the Department of Health to assess the options for further action.”

For further information and/or interviews please contact:

Dirk Vennix, TMA Director of Communications
t: 020 7544 0111 e: dvennix@the-tma.org.uk
m: 07872376748

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. HMRC defines “cheap whites’ as brands produced by smaller, overseas manufacturers that make no legitimate supplies of any tobacco products to the UK. There is often little or no legitimate market for these brands anywhere in the world. Effectively, these products – commonly known as “cheap whites”– are produced for smugglers. In some cases “cheap whites” are produced in countries outside the European Union, such as Russia, and smuggled into the UK where they are illegally sold at a street price of between £2.50 – £3.00 per packet. The prevalence of “cheap whites” is believed to be increasing.

3. HM Revenue & Customs estimates that in 2006/7 up to 17% of cigarette and up to 59% of handrolling tobacco consumption was smuggled. Crossborder shopping accounts for a further 8% of cigarette consumption and 8% of handrolling tobacco consumption.

4. The incidence of tobacco smuggling into the UK ‘exploded’ in the 1990s as a direct result of
a Government policy to raise tobacco taxation above the rate of inflation. Since 2000/1 this
has resulted in almost £26 billion in lost tax revenue with HM Treasury losing up to £3.1
billion per annum (2006-2007), equivalent to £8.5 million per day.

5. Further information about the issue of tackling tobacco smuggling can be found on the TMA’s website – www.the-tma.org.uk.