The damaging effects of the illicit tobacco trade on independent tobacco retailers was further emphasised this week after a survey revealed that one in eight were considering closure as a result of lost sales.
According to the Tobacco Retailers Alliance (TRA) survey, 13% of independent tobacco retailers said their business was under threat from tobacco smuggling and cross-border shopping.
Lost sales and shrinking margins meant that three in 10 shops (31%) are also considering reducing staff numbers, the survey of 1080 retailers also found.
The problem is particularly pertinent in London, where 42% of retailers said they were considering reducing staff numbers as a result of the effects of smuggling and cross-border shopping on tobacco sales.
TRA national spokeswoman Debbie Corris, who also owns a store in Whitstable, Kent, blamed the UK’s high tax levels for the problem.
“These results are very worrying for independent retailers like me and demonstrate that tobacco smuggling is so prevalent, it is threatening the existence of a part of the fabric of our communities that so many people rely on. The UK is such a hotspot for smuggling because the high tax on tobacco makes it one of the most profitable places in the world for criminals to carry out their trade. The government needs to allow tax levels in other countries in Europe to catch up and come more in to line with the UK so that there is not such a huge financial temptation for smugglers to focus their activities here.”
In the North West, where 33% of retailers are considering cutting back on staff, Blackburn retailer Suleman Khonat also urged the government to steer clear of plain packaging.
“If the government introduces the plain packaging of tobacco, this would play in to the hands of smugglers as they will no longer have to spend time and money copying the complex variety of branding currently present across the range of tobacco products. So that will mean more profit for the smugglers which will be channelled into underworld activities such as people trafficking and prostitution. In addition, more sales for the smugglers means lost sales for legitimate retailers like me.”