The Home Affairs Select Committee will today take evidence from tobacco manufacturers as part of its ongoing investigation into the illicit tobacco trade.
Paul Williams, head of corporate affairs for JTI UK and Steve Payne, its anti-illicit trade government relations manager, will speak at the inquiry, which is seeking to curb the growing problem.
Launched earlier this year, the inquiry will also examine why the number of arrests, prosecutions and convictions for tobacco smuggling have fallen over the past three years; the relationship between tobacco smuggling and organised crime; and the possible impact of plain packaging.
It comes as fresh evidence from Australia, which introduced plain packaging last year, revealed that the illicit tobacco trade has continued to grow.
Illicit tobacco sales now account for more than 13% of the market, up from 11.8% in 2012, according to the KPMG study, which was commissioned by Philip Morris Limited (PML).
The report also found that consumption of tobacco has not decreased since plain packaging took effect in December 2012.
It is the first time since 2009 that consumption has not declined year on year.
The study also found that cheap white cigarettes are being sold in Australia for as low as six Australian dollars, equivalent to £3.50 per pack, less than one-third of the price of some legal brands.
One illicit brand, “Manchester,” has registered such explosive growth that in just one year its market share has grown from 0.3% to 1.3% of total manufactured cigarette consumption.
Eoin Dardis, director of corporate affairs at PML, said: “For the first time since the implementation of Australia’s plain packaging experiment we now have data to replace the anecdotes and predictions about its true impact, and the data shows that since the introduction of this measure the black market has grown while consumption of tobacco overall has not declined.
“This report shows that smugglers and counterfeiters have been the big winners in Australia since the implementation of plain packaging at a great loss to the treasury.”