Illegal tobacco

The illegal tobacco market makes up 15% of all tobacco sales in Wales - the highest in the UK. These cheap products make it easier for children to start smoking, as it is sold at pocket money prices by criminals who don't care about age-restriction laws.

We are leading the campaign in Wales to tackle the problem of illegal tobacco. We work with partner organisations including Trading Standards and specialist sniffer dog companies in efforts to bring down the high number of illegal tobacco products consumed in our country.

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What is illegal tobacco?

Although illegal tobacco can be given different names, sometimes changing according to the part of the UK in which it is sold, most health and enforcement professionals would use the following classifications:

Counterfeit

These are illegally produced and supplied products, which bear copies of registered trademarks and are replicas of well-known brands. Sometimes these are packaged with foreign labelling, including health warnings, to give the impression that they are the genuine product, but imported into the UK.

Non-duty paid

These are genuine products, manufactured legally for a local market. They can be UK or non-UK recognised brands. However, they have been smuggled into the UK for illegal supply, with no UK duty having been paid. If tobacco is being sold in the UK and it does not have a UK health warning on the front of the packaging, it has been illegally smuggled1.Cigarette packs with foreign health warnings can't be legally sold in UK.

Illicit whites / illicit tobacco

These products have no legal market in the UK. They have brand names which are not well recognised in the UK as they do not relate to any legitimate products. They are manufactured directly for the purpose of smuggling into another country. No UK duty will have been paid in relation to these products. The most common example currently in circulation is Jin Ling.

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Why is illegal tobacco a problem?

Tobacco control measures are crucial in reducing smoking prevalence and the rates of smoking-attributable disease. Availability of illegal tobacco undermines a range of key measures including taxation, age restrictions on sales and point-of-sale display bans. Illegal tobacco is significantly cheaper than cigarettes from legal sources and these lower prices undermine these interventions by providing an accessible, lower-priced alternative source.

Continued tobacco use harms health and the low prices, possible due to evasion of tax duty, make tobacco available to people who may not otherwise be able to afford it, impacting particularly upon more deprived communities. The impact of health warnings can be reduced due to a lack of graphic images, small print size or being written in a foreign language. Illegal tobacco is also more readily available for purchase by children and young people.

Tobacco smuggling is linked to other forms of criminal activity and has come to be viewed as high profit, with relatively low risk attached (for example compared to the penalties for smuggling Class A drugs). Illegal tobacco also causes a loss of tax revenue and its presence in communities can undermine legitimate local retail businesses.

The scale of the problem across the UK

Since 2000, the UK has succeeded in making substantial progress in the fight against the illegal trade. In particular, HM Revenue and Customs and the UK Border Agency have agreed and implemented a detailed strategy to tackle tobacco tax evasion. HM Revenue & Customs estimates (mid-range) for 2015/16 were that 13% of cigarettes consumed in the UK were illicit, and the proportion of hand-rolled tobacco that was illicit was 32%2. Meanwhile, tobacco tax revenues have also continued to rise.

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The scale of the problem in Wales

In 2014, we led the first pan-Wales research project to assess the scale of the illicit tobacco market in Wales. This project included a Wales-wide survey modelled on those conducted on behalf of the “Tackling Illicit Tobacco for Better Health” programme in the North and South West of England3.

Key findings include:

  • 45% of smokers in Wales have been offered illegal tobacco to buy
  • The most widely-used channel for purchase was at a private address (52%), followed by a pub/club (45%), shops (19%) and street sellers (16%)
  • 59% of those who buy illegal tobacco purchase it at least once a month
  • The average price paid for a pack of 20 illegal cigarettes was around £4, compared with an average price just under £8 for a legally-purchased pack after the 2014 budget
  • Smokers tend to be comfortable, rather than uncomfortable, with the purchase of illegal tobacco
  • More than 70% of purchasers of illegal tobacco strongly agree that illegal tobacco makes it possible for them to smoke when they could not otherwise afford it
  • The availability of illegal tobacco is therefore a very real issue in communities across Wales. 45% of those surveyed see it as an important issue affecting the local community and 53% strongly agree that it brings crime into the local community. However, only 26% of those surveyed indicated that they were likely to report its sale. When asked where they would report its sale, most mentioned the police
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What is being done?

Wales

In March 2016 ASH Wales staged an Illegal Tobacco Pilot Roadshow in Cardiff city centre. Whilst providing information on the illegal tobacco trade to members of the public, they were also given the opportunity to report intelligence regarding people, premises or locations suspected of being involved in the sale or supply of illegal tobacco. The event led to 35 intelligence reports being passed securely to the Trading Standards Regional Intelligence Analyst. Attendees at the Roadshow were also surveyed about their attitudes and experiences around illegal tobacco. 145 surveys were completed. 93% were aware of illegal tobacco, 87% agreed there is a need to keep illegal tobacco out of their local community, and 28% had come into contact with illegal tobacco in the last 12 months.

In 2016 the Welsh Government set up an illegal tobacco task and finish group with the aim to consider actions on addressing illegal tobacco in Wales and setting out policy proposals for consideration by the Minister for Social Services and Public Health.

Following recommendations from the task and finish group the Welsh Government agreed to establish a Wales illicit tobacco programme. The programme will be developed and delivered over three distinct phases. Phase one will cover the development period of the programme, the second phase will be the implementation phase and the third phase will be the legacy of the programme. ASH Wales has been chosen to lead on the phase one stage and this work is currently ongoing.

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England

In England there are initiatives currently in place that aim to raise awareness of illegal tobacco such as the Keep it Out campaign. The campaign focuses on areas in the North East, North West and South West of England and what specific local issues relate to them. Wales does not currently have a comprehensive campaign that raises awareness of illegal tobacco.

The enforcement and compliance department of Her Majesty’s Revenue and Customs (HMRC) investigate how large containments of tobacco can be smuggled across borders; trading standards then investigate how the smuggled tobacco is being distributed on a local level. As well as trading standards, there are other agencies that deal with the local distribution of smuggled tobacco. Scambusters are a specialised trading standards unit that focus on specific ‘scam crimes’ this includes the bootlegging of illegal tobacco4.

WHO Framework Convention on Tobacco Control (FCTC)

The World Health Organisation’s Framework Convention on Tobacco Control (WHO FCTC) is a treaty which aims are to ‘protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco smoke by enacting a set of universal standards stating the dangers of tobacco and limiting its use in all forms worldwide5.'

Article 5.3 of the FCTC6 states that: “in setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law”. Guidelines on implementing Article 5.3 were subsequently developed and approved by the Parties to the FCTC, including the UK7.

Because of the poor public standing of the industry and the application of Article 5.3 in practice, the industry frequently funds and supports individuals and organisations at a local level to carry out work in its interests, including investigating illegal tobacco. Such funding and support is not always declared when such individuals and organisations interact with government bodies.

Key Reports


References

1Keep It Out campaign

2Measuring Tax Gaps 2016 edition. Tobacco tax gaps estimates for 2015-16. HM Revenue and Customs, 2016

3Tackling Illicit Tobacco for Better Health

4 Scambusters by Trading Standards Wales

5WHO's Protocol to Eliminate Illicit Trade in Tobacco Products

6WHO's Framework Convention on Tobacco Control (FCTC)

7Guidelines for implementation of Article 5.3 of the WHO Framework Convention on Tobacco Control