UK illegal tobacco market ‘stubbornly resilient’, TMA survey finds

Shopkeepers jailed after illegal tobacco, alcohol seizure
Illegal cigarettes and tobacco found by HMRC investigators from Wrexham-based shopkeepers Hallmat Mahmood and Dara Ahmed. Photo: HMRC

The illegal tobacco market remains “stubbornly resilient” in the UK despite the continuing decline in the number of adult smokers, finds a new survey by the TMA, the trade association representing the UK tobacco industry.

The survey also revealed that many people view illegal tobacco as a “reasonable way of avoiding paying excessive tax” on tobacco products.

“These survey findings highlight the volume and widespread availability of illicit tobacco throughout the UK and the ‘relaxed’ attitude that many consumers have towards buying and selling illicit tobacco, believing it to be a ‘victimless’ crime,” said Rupert Lewis, director of the TMA.

“The reality is very different. The trade and supply of illicit tobacco is having a devastating impact on legitimate retailers who are unable to compete and are seeing their trade diverted away to ‘black market’ sellers. We are also seeing the wider consequences of organised criminals investing in the illegal tobacco market and the horrific affect that is having on local communities.”

Key survey findings include:

  • 76% of smokers bought tobacco in the last year that has not been subject to UK tax (not including purchases they have made themselves from abroad or Duty Free)
  • Nearly 1 in 2 smokers had no objection to buying non-UK duty paid tobacco from family, friends, colleagues, shops etc.
  • 15% of smokers claimed to ‘only smoke’ branded cigarettes (which have been illegal to buy in the UK since May 2017)
  • 44% of smokers who bought tobacco knowing that it was not subject to UK tax, spend over £10 each week
  • 9% of smokers who bought tobacco through social media or websites advertising cheap tobacco, do so at least once a month
  • 29% of smokers are aware of illicit tobacco being sold in their local area
  • Nearly three quarters of smokers who are aware of illicit cigarettes being sold in their local area have seen them traded for less than £5.00 for a 20 pack (the average retail price for a 20 pack is £10.80)
  • 82% of smokers who are aware of illicit tobacco being sold in their local area in the last 12 months have not reported it
  • 62% of smokers who knew that illicit tobacco was being sold in their local area did not report it because they felt it was ‘none of their business’
  • Nearly 1 in 2 smokers do not believe that there are sufficient deterrents in place to stop people from buying and selling illegal tobacco

Lewis urged the government to undertake a comprehensive review of the impact of tobacco policy in the upcoming Budget.

“The current policy of consistent punitive tax rises combined with the tobacco duty escalator is failing to deliver higher tax receipts and instead is driving many consumers towards buying illicit tobacco through illegal channels,” he said.