Share of illicit cigarettes in UK increases as counterfeit flows hit record figures: KPMG
This picture taken on August 4, 2021, shows packs containing counterfeit branded cigarettes found during a raid by customs officers on an illegal smuggling site in Aartselaar, near Brussels. (Photo by JOHN THYS/AFP via Getty Images)
The share of counterfeit and contraband cigarettes in total consumption in the UK has increased by one percentage point to 18.1 per cent in 2021, a study by KPMG has found.
The increase was due to a jump by around 760 million in counterfeit flows, which stood at 3.03 billion cigarettes last year, the highest value recorded in the UK since this annual study began. Counterfeit accounted for over 56 per cent of total illicit cigarettes last year.
Total tax revenue lost to the exchequer from the sale of illicit cigarettes is estimated to be £2.32 billion, £442 million more from 2020.
More worryingly, the decline in the UK's total cigarette consumption slowed in 2021, compared with rates observed between 2017 and 2020, while illicit consumption increased to a level similar to that seen in 2019 at 5.5 billion cigarettes.
Total UK consumption declined by 1 per cent in 2021 to 30.2 billion cigarettes, driven by a decline in legal domestic sales.
The study commissioned by Philip Morris International (PMI) has also revealed that overall illicit cigarette consumption increased across European Union (EU) member states by an estimated 3.9 per cent last year, reaching 35.5 billion cigarettes consumed. Meanwhile, the study estimates that total EU cigarette consumption declined over the same period.
The increase of illicit consumption in the EU was largely driven by an estimated 33 per cent increase in counterfeit consumption in France, where it grew to 8 billion cigarettes last year. Overall, France remains the largest market for illicit cigarettes in the EU, with a total of 15.1 billion illicit cigarettes consumed in 2021, comprising 29 per cent of total cigarette consumption in the country, which represents a significant growth from 13 per cent in 2017.
The UK, which left the EU in 2020, was the second largest illicit cigarette consumption market in the study, with 5.5 billion cigarettes, an increase of 200 million over 2020
“The findings of the KPMG report should be a real wake-up call. It’s alarming that in countries that maintain high excise taxes on cigarettes, such as France, instead of driving a decrease in smoking prevalence, we see a rise in counterfeit cigarette consumption,” said Gregoire Verdeaux, Senior Vice President, External Affairs, PMI.
“In fact, in France in the past five years, while the average price of a pack of legitimate cigarettes has increased by more than half, the number of adult smokers has only marginally decreased.”
The annual KPMG report focuses on the consumption and flows of illicit cigarettes in 30 European countries—the 27 EU member states, as well as the UK, Norway, and Switzerland.
Verdeaux noted that the continued growth of a black market where fake and unregulated cigarettes are easily available seriously undercuts legitimate efforts to reduce and eventually eliminate cigarette smoking.
“We are convinced that consumers need to be incentivised so that they don’t have to turn to illicit cigarettes. This means focusing on education and awareness, and ensuring the availability of better alternatives, such as scientifically substantiated smoke-free products,” added Verdeaux.
“Making them accessible as a better option for millions of adult smokers in Europe who don’t quit should be our common top priority.”
UK's newest buying group The Wholesale Group held its first tradeshow since its launch in January 2025 which saw supplier partners and members come together to plan for future growth.
Held at Cheltenham Racecourse on Thursday (20), the event saw more than 190 supplier partners meet with more than 180 wholesale members.
“The tradeshow exceeded all our expectations and was a fantastic success with incredibly high levels of attendance,” said Jess Douglas, joint managing director.
“The new venue and the event itself really demonstrate the scale and diversity of The Wholesale Group.
“To see so many members and suppliers come together to discuss plans for the coming months, share the latest product innovation and take advantage of our on-the-day deals was wonderful.
"The energy throughout the day and evening was incredible and a great way to cement our plans for the group moving forwards.”
Coral Rose, The Wholesale Group co-chair, agreed: “We are delighted with the tremendous turnout of members for the show, all proudly representing independent family-owned businesses in foodservice and retail wholesale. The event successfully generated significant value to all these businesses demonstrating our collecting scale while creating valuable connections with our suppliers.”
“Events like this really are invaluable,” said Kate Robinson, regional account manager, Unilever Food Solutions UK.
“This industry thrives on face-to-face interaction and meeting with members in person to plan for the future and share our latest product development always provides critical insight.”
Dan Dunster, national account manager, CCEP, said, “What a fantastic event and an excellent venue. We were able to have several good business discussions with members and for me as account manager for The Wholesale Group, it is so effective to be face to face.
"This is such a valuable use of our time as both the day and the evening were great opportunities to build on relationships. It was amazing to see members and suppliers recognised for their work.”
Following the tradeshow, The Wholesale Group held a formal black-tie dinner where it presented awards to suppliers and members in recognition of engagement and performance with Confex during 2024.
Thompson Foodservice Ltd achieved double success as it was named Foodservice Member of the Year as well as Green Wholesaler of the Year.
“The Wholesale Group Awards showcased the best of independent wholesale,” said Tom Gittins, joint managing director.
“Across the board we saw outstanding achievements from both our members and suppliers with awards spanning retail and foodservice across all product categories, with winners represented across delivered, cash and carry, export, direct to consumer, residual and events.
:These awards remind me how lucky we are to have such a strong group with best-in-class partners, the perfect recipe for future growth.”
Later in the year, The Wholesale Group will be holding a foodservice fair in Stratford upon Avon on 11 September and an annual conference in Tenerife, from 9-12 October.
The Wholesale Group now has 257 members and a group turnover in excess of £4.5bn, representing more than 13.7 per cent of UK wholesale.
RH Amar has signed a deal which will see it move to a new 94,756 sq ft state-of the-art facility in High Wycombe at the end of the year.
The move follows a period of significant growth and expansion for the UK food distributor and growth partner which has seen it achieve double-digit growth in each of the past five years, with new business wins including Weetabix, Dr. Oetker and Divine Chocolate.
The new home for the third-generation family business will provide a high-specification facility with increased warehouse capacity and more office space, while continuing to provide the excellent transport links of its current HQ less than a mile from M40 Junction 4 on the outskirts of High Wycombe.
“We are excited to be a step forward to a new headquarters which will enable us to further build on the success we’ve achieved with our brand partners and customers," said MD Rob Amar. "The premises are being purpose-built to support our expanding operations and will provide the foundation we need to realise our long-term growth ambitions and those of our brand partners.
He added, “As we celebrate 80 years in business, this move is a significant milestone in the history of our family business, and we look forward to calling this new building our home at the end of the year.”
The sustainable headquarters have been designed to achieve a BREEAM Excellent rating, EPC A+ scores, and will be net zero carbon in construction – all underpinning RH Amar’s commitment to being a sustainable business.
RH Amar works with some of the UK’s best-loved food names, including Del Monte, Mutti and Weetabix, alongside smaller specialist brands - working in partnership to successfully grow brands across the UK market with distribution, sales, marketing and technical support and expertise.
RH Amar’s new premises are owned by Railpen, manager of the £34bn railways pension scheme in the UK. The state-of-the-art facility is being rebranded to High Wycombe X, joining Railpen’s growing portfolio of X-branded industrial parks. RH Amar will be the anchor occupier for the new development, situated on High Wycombe’s wider Cressex Estate.
Banks, hotels, ATMs and pubs are facing a cash shortage as more than 1,000 G4S workers vote to strike over a real terms pay cut.
GMB members deliver money to companies such as NatWest, Lloyds Santander, Tesco, Asda, Wetherspoons, McDonalds and Travelodge.
Workers have voted to strike with a majority of 91 per cent, on a 59 per cent turnout.
The industrial action comes after workers were offered a deal as low as 1.4 per cent in some cases, while G4S’s directed competitor Loomis offered workers 4.6 per cent earlier this year.
Strikes could take place as early as the Easter bank holiday, with business and ATMs potentially left without cash, while airports may run out of foreign currency.
“These workers do a difficult and dangerous job – yet the company is only offering them a real terms pay cut," said Eamon O’Hearn, GMB National Officer, said:
"It’s no wonder they are willing to strike.
“Now thanks to G4S penny pinching, the public faces an Easter break where businesses and banks run out of cash, potentially causing major disruption.”
Tighter and tougher protections to protect children and communities from illicit tobacco and vapes have been unveiled on Sunday (22) as the landmark Tobacco and Vapes Bill moves closer to creating a smokefree UK.
A new £10 million boost for Trading Standards will bolster operations in local communities for the next year, to fund an expected 80 more apprentice enforcement officers to stop harmful tobacco and vape products finding their way into neighbourhood shops and stopping underage sales.
Officers work closely with local police to take down organised crime groups that operate within networks to supply illegal vapes. Trading Standards plays a key role, operating targeted seizures and sending sniffer dogs to hunt down illicit vapes hidden in shops.
The package builds on robust measures in place to tackle illicit tobacco and vapes, including HMRC and Border Force’s £100 million Illicit Tobacco Strategy to crack down on illegal tobacco.
Alongside this, the new vaping duty (which will come into force in 2026) will introduce new civil and criminal powers, giving them the ability to seize products and recruit over 200 additional compliance staff.
This new funding sits alongside the Tobacco and Vapes Bill which will create the world’s first smoke-free generation, gradually ending the sale of tobacco products to anyone born on or after Jan 1 2009 and toughening laws to protect children from addiction.
The Bill will also introduce new £200 on the spot fines in England and Wales for breaches of age of sale restrictions, alongside powers to introduce a licensing scheme for retailers to sell tobacco, vape and nicotine products in England, Wales and Northern Ireland.
This action delivers on the government’s Plan for Change to create an NHS fit for the future by focusing on the crucial role prevention can take in cutting waiting lists, while also making our streets safer by tackling organised crime.
Minister for Public Health and Prevention Ashley Dalton said, "Buying illicit tobacco and vapes may save a few pennies in your pocket, but they can be incredibly dangerous and are often linked to criminal activity.
"It’s vital the Tobacco and Vapes Bill moves forward so we can tackle this illicit trade and free our children from a life imprisoned by addiction.
"By phasing out tobacco, introducing new restrictions on vapes and putting more boots on our streets, we’re taking the concrete action needed to deliver our Plan for Change and bring us that one step closer to a healthier, smoke-free future.”
John Herriman, Chief Executive at the Chartered Trading Standards Institute (CTSI), said, "CTSI is very welcoming of the announcement of substantial funding for Trading Standards services across England.
"This much-needed investment will strengthen our ability to support businesses in complying with current and future tobacco and vaping regulations and will also ensure we are well placed to support the protection of public health.
"It also reinforces our commitment to taking firm action against anyone who seeks to harm their local communities by choosing to operate outside the law.
"With these additional resources, we can make a real difference in both keeping consumers safe, and ensuring a fair and responsible marketplace.
Lord Michael Bichard, Chair, National Trading Standards, said, "Illicit tobacco and vape products are prevalent in our communities, trapping people – including children and young people – in a dangerous cycle of addiction that could endure for another generation.
"The scourge of illicit nicotine products are largely powered by organised crime, and the products represent an important money-spinner that help fund organised crime groups’ other illegal schemes, such as human trafficking and modern slavery.
"While Trading Standards seized more than a million illegal vapes, 19 million counterfeit cigarettes and 5,103kg of illicit hand rolling tobacco last year, further action and resources are needed by enforcement bodies to disrupt supply and clamp down on the perpetrators.
"The Tobacco and Vapes Bill is an important step in the right direction, providing more resources to a stretched Trading Standards workforce who, alongside other enforcement partners, are working hard to help the government meet its aims for a smoke-free generation."
In CCTV footage seen by local publications, a man was seen entering the VR Supermarket in Kingstanding Road just before 3pm on Thursday (20).
Once inside he brandished a knife towards a man and woman behind the till.
The man was heard ordering the cashier at the Kingstanding shop to open the till.
“Everything out of the till,” said the robber, while pointing the blade at the shopkeeper.
While the staff behind the till tried to stress that there is no cash in the store, the robber continued to yell at them and forced them to empty the till.
He tapped the counter with his knife as he directed the shopkeeper to place the notes on the counter, before stuffing them into his pocket.
The cashier calmly complied and the man left the shop in less than 30 seconds.
The robber was a man dressed all in black with a black Nike hoodie, with the hood up, a black face covering, black trousers and wearing black, grey and white trainers.
He was carrying a black bag and spoke with a local accent.
West Midlands Police confirmed it was investigating the incident.
A spokesman for the force said, “We are investigating a robbery at a shop in Birmingham.
“We were called to Kingstanding Road shortly before 3pm on March 20 after a man entered the shop, threatened staff with a knife and made off with cash."
Meanwhile, in an unrelated case, the West Midlands Police charged a man with two shop thefts, assaulting a police officer and possessing drugs following an arrest by Walsall town centre neighbourhood officers.
Officers from our Pleck and Delves neighbourhood team, responded quickly on Match 20 morning to arrest a man who had allegedly stolen goods from a shop on Broadway, Walsall.
He has been charged with theft from a shop on 3 Feb and 20 March, possession of a controlled drug Class B on 20 March and common assault of an officer on 3 February.
He has also been previously charged with 27 shop theft offences across Walsall and the possession of a knife with his court case adjourned until 16 June at Dudley Crown Court.