More than 70% of smokers are now buying tobacco from ‘non shop’ sources such as the internet, abroad, car boot sales and friends and family, as they seek to avoid inflated legitimate prices.
In addition, 12% of smokers are now spending £20 or more on ‘non-shop’ products each week, a major new survey of 12,000 smokers by the Tobacco Manufacturers Association (TMA) shows.
This varies heavily between regions, with 19% of Scottish smokers spending £20 or more on ‘non-shop’ tobacco products, whereas only 9% do so in Wales.
In fact the TMA estimates that 20% of all tobacco consumed in the UK now avoids paying UK taxes.
Hard-to-police online tobacco sales are emerging as a key area of concern, and evidence also shows that smokers are stockpiling cigarettes from abroad. Around half of all smokers questioned said they aimed to bring back “as many cheap tobacco products” as possible from a summer holiday, the TMA said.
It is blaming the UK’s high levels of taxation, which have increased by 50% in the past five years, for the problem.
According to the survey, 84% of UK smokers think tobacco prices are too high and a majority now say that they are turning a blind eye to illicit tobacco sales, with 58% claiming it was “none of their business”.
Blackburn retailer and TRA national spokesman Suleman Khonat said: “This report gives further evidence of something that retailers see every day; that there is a huge black market in tobacco in this country.
“Responsible retailers like me play a key role in our local communities and we want to continue providing the valuable services we do for our customers.
“We need the government to support us by tackling the serious issue of tobacco smuggling rather than imposing any further taxes or restrictions on our businesses.
”We call on the government to adopt a partnership approach with small business; and we call on the new small business minister to meet us without delay.”
Commenting on the report, Christopher Snowdon, head of lifestyle economics at the Institute of Economic Affairs, added: “The government has no real idea how much illicit tobacco is being smoked in Britain but HMRC estimates the tax loss is between £1.4bn and £2.9bn. The TMA’s research suggests that the true figure is at the upper end of that estimate and may be even higher.
“The government is either happy to lose this money or it has its head in the sand. It continues to increase tobacco taxes despite its own figures showing that the illicit trade is on the rise.
“In the last few years, tobacco duty has increased, the black market has grown and tobacco duty revenues have dropped. It is economic madness to continue down this path.”