Speaking to Convenience Store this week, British American Tobacco’s (BAT) commercial director for the UK and Ireland, Tolga Kilic (below left), has issued a stark warning about the illicit tobacco trade - saying it’s getting worse.
“The illicit tobacco market is already extremely well established. Increasing taxes is often intended to reduce consumption. However, where demand remains, it instead contributes to the growth of illicit activity,” Kilic said. “At the same time, underfunding enforcement and challenges in controlling the border creates the perfect catalyst for the illicit trade. A pack of illicit cigarettes can be sold at a fraction of the legal price while still delivering significant profits to smugglers and counterfeiters,” he added.
Kilic went on to compare the illicit tobacco trade to other more shocking equivalents: “Large quantities can be moved quickly across borders or hidden within legitimate freight, lowering the risk compared to drugs or weapons. And make no mistake, it’s not small-time criminals behind this supply chain. It’s large, complex organisations often involved in broader illegal activities too.”
Kilic added that lessons of the past are still not being heeded by decision makers. “Lawmakers and politicians are yet to learn the lessons of past failures and we’re now seeing this issue plague nicotine products - including vapes and nicotine pouches.”
BAT UK is constantly being made aware of incidents of counterfeit goods being sold across the country, Kilic said. “In the majority of these cases, consumers are rarely aware these products are fake - with little or no oversight of what exactly is in them. The reality is clear - illicit supply chains are established, sophisticated and expanding into new territory. ”
“Official estimates fail to capture the true scale of the issue…”
In one single operation, Trading Standards seized 46m illicit cigarettes and over 12,500kg of hand-rolling tobacco across a three-year period, Kilic added. “Despite these efforts, illicit tobacco and the illicit nicotine trade in the UK continues to grow significantly, with official estimates failing to capture the true scale of the issue.
“BAT can spot illicit nicotine products as well as anybody. Where possible, we’ve tried to educate law enforcement agencies on these products and the potential dangers of them. Through our facility in Southampton we support work on testing product samples to better understand what’s actually in them.”
The director added that the wider industry still remains unconvinced by BAT’s work tackling the issue. “Unfortunately, what we continue to see is a degree of scepticism in some quarters about our true intentions. Some groups would rather help enable the illicit market than work with industry and take advantage of the expertise and knowledge on offer.”
Kilic also believes, sadly, that there are only one set of winners. “The only winners are the gangs profiteering from these illegal activities. We know these criminals have no respect for the law, and where these activities are allowed to flourish more criminality inevitably follows. In turn, consumers are exposed to unsafe, untested and unregulated products. Meanwhile, the Government continues to lose tax revenue from legitimate sales.”
So, what can be done to help stem this seemingly unstoppable tide of illicit tobacco? “On a retail level, we recommend retailers get in touch with their local BAT representative if they’re suspicious of any product or supplier. They’ll be able to advise on the next steps, which could include contacting Trading Standards or even arranging product testing at our labs.”
Looking forwards, Kilic said the only real permanent solution lays with the Government: “The Tobacco & Vapes Bill has recently passed through Parliament and the Government will soon be opening up consultations on nicotine and tobacco products.
“There is therefore an opportunity for retailers to get involved and help shape a framework that prevents illicit products from making their way onto shop shelves. We strongly encourage retailers to make their voices heard in these consultations and be honest about their experiences with illicit trade and where improvements must be made.”
“The current fines proposed by the Government are far too lenient.”
Kilic said BAT believes the new legislation is currently too weak to make a significant difference. “Take retail licensing. for example. For a long time, BAT campaigned for the introduction of such a scheme to deter unscrupulous retailers from selling to minors and selling illicit products, but the current fines proposed by the Government are far too lenient. There is essentially no incentive to comply.”
BAT also thinks more extreme punishments for breaking tobacco laws must be enforced, Kilic said. “Higher fines for retailers must also be matched by strong enforcement in other areas, such as more resources and powers for Trading Standards along with mandatory pre-market testing for nicotine products shipped to the UK. Without this kind of enforcement across the board, illicit supply chains will continue to strengthen.”
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