A TMA spokesperson commented:

“The TMA was offered the opportunity to provide oral evidence to the APPG Inquiry but declined and elected to provide a written submission because we knew that we would not be given a fair hearing on the extremely important issue of the illicit tobacco market. Regrettably, the press release that supports the ASH led inquiry proves this very point.

“We would agree with MP Stephen Williams that a broad alliance of HMRC and Border agency to deal with the illicit trade in tobacco is important but he of course omits to mention the international efforts of the tobacco industry itself in providing the intelligence and support to assist the authorities in dealing with this issue.

“The reality is that those who consider this issue objectively will recognise that a high tax policy drives smuggling and cross-border shopping. HMRC data is only available to 2010/11, whereas more up-to-date information shows that the level of cigarettes consumed that are not UK tax paid has risen from 17% in 2011 to 21% in 2012. Additionally the impact on Government revenues is clear for all to see. Figures released by the Office for Budget Responsibility this week show a revised forecast for tobacco duty revenue in 2012/13, down by £200 million. This is evidence, not propaganda.

“Over 500,000 people have come out against the proposals to introduce plain packaging. The relationship between standardised packaging and the ease by which they could be counterfeited is an issue which has been raised by MPs, packaging suppliers, retailers, wholesalers, the police and enforcement agencies – not just the industry. Perhaps Mr Williams should speak to the 75 MPs who have signed a letter to express their concern instead of simply listening to those who want to close down any debate about this important issue which will have a serious and detrimental impact on many businesses large and small.”

A copy of the TMA’s submission to the APPG Inqury is available to download here.

“Today’s announcement of an 5.3% increase in tobacco tax is a gift to the criminal gangs who trade in illicit tobacco and deprive the Government of up to £8m per day in lost tax revenue.  With the economy stalling and incomes falling more and more smokers are turning to cheaper illicit tobacco products and today’s Budget has added more fuel to this burgeoning market.”

The empty pack surveys (EPS) conducted on behalf of the tobacco industry indicate that the non-UK duty paid cigarette market in 2012 was around 21%, up from around 17% in 2011, which represents an additional revenue loss to the Treasury of hundreds of millions of pounds.

Example of Pre-Budget prices of cigarettes & hand rolling tobacco

“The TMA’s member companies work extensively with partners such as HMRC & Trading Standards to tackle the illicit trade in tobacco , but proposals to introduce plain packaging would make it far worse.”

- ENDS -

For further information\interviews, please contact:

Paul Stockall, Communications & Intelligence Manager    
t: 020 7544 0113   m: 07545 440 700
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. (www.imperial-tobacco.com)

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

3. The tobacco manufacturers and HM Revenue & Customs (HMRC) undertake surveys to assess the non-UK duty paid tobacco market and whilst the data is based on different methodologies, they show the same trends. The difference between the data sets is largely due to the 18 month time lag involved in HMRC figures, therefore HMRC are reporting on 2010/11 data, whereas the tobacco industry figures are more up to date.

4. HM Revenue & Customs (HMRC) 2010/11 upper estimates (1):

Levels of smuggling & crossborder shopping (non-UK duty paid – NUKDP)
Cigarettes
Smuggling	Crossborder	Total NUKDP
16%	3%	19%
Hand rolling tobacco
Smuggling	Crossborder	Total NUKDP
44%	6%	50%

Revenue losses from smuggling & crossborder shopping (£millions)
Cigarettes
Smuggling	Crossborder	Total NUKDP
£2,100	£400	£2,500
Hand rolling tobacco (HRT)
Smuggling	Crossborder	Total NUKDP
£810	£110	£920

5. Since 2000/1 HMRC estimate that up £50 billion in revenue has been lost because of the smuggling and crossborder shopping of tobacco products

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

(1) HMRC & UKBA: Tackling Tobacco Smuggling – building on our success, April 2011

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Jaine Chisholm Caunt, Secretary General of the Tobacco Manufacturers’ Association commented:

“These proposals fly in the face of common sense, and restrict free trade – something that is even more important for the EU to champion at a time of economic crisis and high unemployment across Europe. Attempts to standardise packaging would create opportunities for criminal gangs to profit and sell illicit tobacco to children, a key concern which led to more than 500,000 people opposing ‘plain packaging’ in the recent UK consultation.

“The prohibition of packs of 10 cigarettes would prevent adults from choosing to manage or reduce their cigarette consumption. The proposed ban on menthol cigarettes and the creation of a uniform size of cigarette is an unjustifiable restriction on the rights of adults who choose to consume a legal product, as well as potentially delivering a body blow to retailers, and businesses throughout the tobacco supply chain.

“These proposals will deliver very little for public health, but would create a huge profit opportunity for criminals and racketeers. Those involved in considering the proposed Directive over the coming months should reflect carefully on the many unintended consequences of these proposals, and ensure that any new regulation is necessary, proportionate and evidence-based.”

Download document.

Jaine Chisholm Caunt, Secretary General of the TMA, commented:

“Plain packaging is an assault on UK business in the midst of a double dip recession. Plain packs would be far easier to copy, and would therefore be a gift to the criminal gangs behind the illegal trade in tobacco and increase the £3.1bn – £8.5m per day – that is currently lost to the UK Treasury as a result of this crime.

“At best, plain packaging will have no impact on youth smoking, as there is no credible evidence that packaging is a factor in underage smoking. At worst, it could actually increase youth smoking, by driving the availability of smuggled tobacco being sold by criminals in local communities. These illegal traders do not care who they sell to, and frequently target children. The percentage of children who smoke in the UK is at an historic low – 5%. We feel the government should reduce this figure still further by tackling children’s access to tobacco, through greater investment in enforcement action and tougher penalties targeted at illegal tobacco gangs, and by making proxy purchasing of tobacco illegal, as it is for alcohol.”

Editors Notes:

1. The TMA is the Trade Association for tobacco manufacturers in the UK. Its three members are British American Tobacco (BAT), Imperial Tobacco and Japan Tobacco International (JTI)

2. The UK tobacco industry employs over 5,700 people in the UK and generates £12.1bn per year in excise and VAT. Collectively with its UK supply chain, it supports a further 66,000 UK jobs, and generates £2.1bn GVA.

3. This figure* is based on estimated responses into the consultation including signatures, postcards, letters, emails, online responses, consultation response forms etc., many of which have been sent directly to the Department of Health (DH). We await final confirmation of the number of responses from the DH.

4. The Australian court case judgement ruling is the first of several legal challenges on plain packaging. It relates solely to Australian legislation and not the UK. For further information contact the press offices of BAT, Imperial and JTI

5. The TMA and its member companies are committed to addressing youth access prevention by supporting retailers through the ‘No ID, No Sale’ and CitizenCard campaigns, and working in partnership with enforcement agencies, including HMRC to tackle the illicit trade in tobacco.

6. For further press enquiries about the TMA response or to contact other organisations opposed to plain packaging, please contact Ben McArdle, Campaigns Manager, TMA on 020 7544 0116 or 07712 530 436

“With the consultation on the standardised (plain) packaging of tobacco products now closed, we await with interest the report from the Department of Health on this important issue.

“We trust the Government will have an open view with this consultation and will take notice of the submissions from retailers, wholesalers and packaging manufacturers whose businesses are threatened by these proposals.

“In 2008 the Government rejected this proposal and we have seen no credible evidence since then to suggest that this will reduce smoking. We believe that these proposals will only fuel the already burgeoning illicit trade which currently loses the Government £8.5m per day in unpaid tax.”

The research conducted by Cogent shows that over 5,700 are directly employed in high value jobs and that the industry indirectly supports around 66,000 elsewhere in the economy – 20,000 in the supply chain, 46,000 in distribution, retail and forward linkages**.

Click here to find out more

** Forward Linkages: Distribution chain connecting a producer or supplier with the customers