Representing the UK Tobacco Sector

UK Tobacco Market Summary

Consumer spending on tobacco products in 2007 amounted to £12.6 billion, 91% of this on cigarettes.
Tax revenue raised on these sales amounted to £9.9 billion - £8.0 billion in excise duty plus £1.9 billion in VAT.
The total tax burden (excise duty plus VAT) accounts for 90% of the price of the cheapest cigarettes on sale in the UK.

Owing to the high level of tobacco taxation the UK experiences a high level of smuggling and crossborder shopping in tobacco products – referred to as non-UK duty paid (NUKDP) consumption. TMA estimate that in 2007 around 27% of cigarette and 68% of handrolling tobacco consumption was NUKDP.
We believe that the majority of NUKDP consumption comes from other EU Member States where taxes, and therefore prices, in many countries are much lower. For example, a typical pack of 20 cigarettes costs £5.66 in the UK and around £2.00 in Spain.
HM Revenue & Customs estimate that in 2005/6 NUKDP consumption lost them revenue of between £2.8 and £4.3 billion.

The latest figures (2006) from the Government’s General Household Survey show that 22% of adult (16+) population in Great Britain were cigarette/handrolling tobacco smokers - although the report does note that this is likely to be an understatement. This equates to around 10.6 million smokers - 9 million in England. Northern Ireland's Continuous Household Survey shows that 25% of adults (16+) were cigarette/handrolling tobacco smokers - around 340,000 people.

4,927 people are employed by the UK tobacco companies.
A 2004 study by DTZ Pieda estimated a further 80,000 jobs among suppliers and in wholesale, distribution and retailing were dependent on the UK tobacco industry.