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Cigarette Makers Concerned About Illicit Cigs Flooding UK Market

Published on November 19th, 2012 00:00

The amount of cigarettes purchased in the United Kingdom, with no taxes or import duties paid on them, is going to jump, according to one of the nation’s largest tobacco companies.

illegal cigarettes in the UK

Japan Tobacco International, the parent company of UK-based Gallaher Group, owner of Silk Cut, Mayfair and other brands, carried out a secret buying trip across north-west London, which found a terrific assortment of illegal cigarettes and loose tobacco, selling for nearly half the retail price.

Among these are world-known cigarette brands, packed in cartons with health labels written in Spanish but the duty stamp contains Belgian code, and loose tobacco, which includes large quantities of impurities.

The cigarette maker considers that following two of the highest duty increases in the last two Budgets – with a total of 70p per pack of 20 cigarettes – the number of traffic and fabrication of fake cigarettes will jump.

Latest surveys demonstrated that 23.3 percent of cigarettes consumed across London and a shocking 44 percent of loose tobacco had evaded the UK excises taxes. This is nearly a half higher versus the nationwide average equaling 16.4 percent. According to the experts’ estimates the Treasury has missed £2.9 billion during the previous year across the country due to illicit cigarette trade.

The signs confirming that the scale of black-market trade is expending are growing constantly. During the last 10 months Her Majesty’s Revenue & Customs Agency has confiscated at least one million pouches of counterfeit loose tobacco being trafficked into the Great Britain to be loaded with illicit tobacco.

In a recent criminal court proceedings, which led to the leaders of a 10-man band operating an illicit cigarette plant in Chesterfield sentenced, proved the band got a projected profit of £120 million yearly and stripped the Treasury from nearly £130 million in excise tax.

Martin Southgate, managing director of Japan Tobacco International UK, considers the plan to adopt plain packaging bill are not effective in reducing smoking rates. According to Mr. Southgate, the move would not help secure a reduction in the rate of younger adults and adolescents taking up tobacco use, but would only promote the black-market tobacco trade.

The Government was expected to have revealed its response to a examination paper from the Department of Health in early November, however it seems that it has delayed it for the second time in as many weeks.

Allison Cooper, Chief Executive Officer of Imperial Tobacco has recently confirmed the company is set to start legal action in case the health authorities continue to push ahead the move to oblige cigarette makers pack cigarettes in plain packs, since she believes the plan could easily offer additional “stimulus” for illicit cigarettes.