Tobacco industry myths shattered as smuggling rates fall

23 Oct 2012

Read the full ASH news release

Official figures released today show that there was a further fall in tobacco smuggling in the UK in 2010/11. [1] According to HM Revenue & Customs, in 2010/11 an estimated 9% of cigarettes consumed in the UK were illicit compared to 11% in 2009/10.  The figures for hand rolled tobacco were 38% in 2010/11 compared to 42% in 2009/10 (all figures mid-range estimates).  Meanwhile, tobacco tax revenues have also continued to rise. [2]  

The March 2010 Budget raised tobacco duty by inflation plus 1% and the March 2011 budget raised tobacco duty by inflation plus 2%.  As always, tobacco industry lobbyists complained that tax rises (and new regulation on tobacco use) would drive up illicit trade. After the March 2010 Budget, the Tobacco Manufacturers Association predicted that because the Government had “imposed the largest tax increase on tobacco products in ten years” it would “only provide further stimulus to those who seek to profit from the illicit trade in tobacco.” [3] After the March 2011 Budget, the TMA complained that the “Government has today increased tobacco duties by 2% above inflation which clearly demonstrates a complete lack of joined-up-thinking as taxation is the acknowledged driver of the illicit tobacco trade.” [4] As usual, these complaints have proved to be wrong. 

 Commenting,  Deborah Arnott, Chief Executive of ASH said:

“The continuing fall in the illicit tobacco trade is good news for the British economy. Once again it is clear that there is no reason to believe tobacco industry propaganda about the relationship between illicit trade, tobacco taxes, plain packaging or other tobacco control measures.

We want HMRC and the Border Agency to strengthen their successful joint work on the problem, for the UK Government to work with the European Union to make sure that the EU’s legally binding agreements with the big tobacco firms to stop smuggling work well in practice, and to work with other countries around the world to put the recently negotiated Illicit Trade Protocol into full effect.

We can defeat tobacco smuggling, and at the same time reduce smoking rates and the toll of death and disease that smoking causes. But if we listen to siren voices from the tobacco industry we will do neither.”

More information

Tobacco taxation will be discussed at the fifth session of the FCTC Conference of the Parties (COP5) in Seoul in November – download the policy papers below

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