A growing number of responsible retailers are reporting further blows to trade from the rising tide of cheap illicit tobacco being sold in counterfeit standardised (plain) packaging.
Suleman Khonat, retailer and national spokesperson for the Tobacco Retailers’ Alliance (TRA), told Convenience Store that he had received “numerous reports” from independent retailers across the country of counterfeit plain packs being sold in their communities.
JTI also said that it was aware of the problem. “We are aware that some counterfeit cigarette packs seized recently have been in plain packaging rather than branded designs,” JTI head of communications Mark Yexley said.
“We have always maintained that plain packaging legislation would make it easier for the counterfeiters to operate, therefore it is no surprise that these packs have begun to appear in the UK,” he added.
The TRA has written to the UK Department of Health twice since November asking it to explain how it planned to work with other agencies to tackle the growing problem but so far had received “wholly inadequate” responses, Suleman added.
“This is a matter of grave worry to many small, independent retailers particularly as there have been further discoveries of counterfeit plain packs,” he said.
“The Department of Health was told by many, including HMRC and the retail sector, that plain packs would make it easier to counterfeit and would be a dream for organised criminals. Sadly, now that this has actually happened, it appears entirely unwilling to face up to its responsibilities.
“This is classic example of a policy pushed by the health lobby with little regard for retailers with dire consequences. It’s response, as the ultimate owner of the plain packaging policy, is entirely inadequate.”
Replying to Suleman’s letters, the Department of Health said it had “noted” the concerns about counterfeit plain tobacco packs but added that counterfeit tobacco had “been an issue in the UK for many years prior to standardised packaging.”
“HMRC is monitoring the situation to identify whether standardised packaging has changed the circumstances of the fraud and if a different operational response is needed,” it added.
The most recent tobacco tax gap (the difference between the amount of tax due and the amount collected) is estimated to be an all-time high of £2.4bn, with illicit sales thought to account for 13% of the cigarette market and 32% of rolling tobacco sales.
Imperial Tobacco’s anti-illicit trade manager, James Hall, told C-Store: “Unfortunately, the new EUPTD II and Standardised Packaging Regulations appear to have had a detrimental impact on the independent trade with regards to illegal tobacco.”
Imperial equipped all of its sales staff with a new illicit trade reporting app in December to help reps log retailer reports of illicit sales in their communities, quickly and anonymously.
“Before the app launched, we were averaging between 10 and 20 illegal tobacco reports per month. In the month since it launched, that number rose to over 100,” Hall added.