Smokers who seek out cheap cigarettes and tobacco in Southampton are unknowingly helping to fund organised crime and even international terrorism.
That’s the fear of experts who say that millions of pounds in profits from illegal and fake tobacco products easily available from rogue traders is finding its way into the pockets of the worst of criminals and killers.
This week the Daily Echo has revealed how our exclusive research in Southampton has shown how a flood of illegal and fake tobacco products are openly being sold by some unscrupulous traders and individuals.
Our independent undercover investigators had no trouble in buying packets of cigarettes and roll you own (RYO) tobacco at a fraction of the true cost of legal, branded products.
We reported how many of the fake fags were actually made of poor grade tobacco and included such ingredients as rat droppings, human excrement, dead insects, plastic and asbestos.
And we told how there are fears that the trade in illegal and fake cigarettes was funding organised crime and even international terrorism.
Today we look at how the trade is funding the worst of crimes as gangs seek to profit from the high taxes levels in the UK that entice some smokers to seek cheaper products.
Those who buy counterfeit and illegal tobacco products are almost always unaware that they are unwittingly part of an elaborate criminal network that inflicts pain and misery throughout the globe.
The recent terror attacks in France and Germany as well as the Middle East and further afield have shown how dangerous these people can be.
Yet few buying cheap cigarettes or rolling tobacco in Southampton would make the link between their actions and the men and women people who control the killers.
Cheap tobacco products are made in unregulated factories around the world, especially in the Far East. The products are then smuggled into the UK which has some of the highest taxes on tobacco in the world. In some parts of the country as much as 50 per cent of rolling tobacco is believed to be illegal or fake brands.
The United Nation’s Security Council’s investigative body was reported to have found that millions of pounds in illicit tobacco revenue is reaching the Taliban and al-Qaeda. The UN also says it has found links to Congolese rebels who have been recruiting child soldiers and carrying out atrocities in the African country.
Europol – the European wide law enforcement agency – says that some countries in Eastern Europe and Asia act as transit countries where gangs can establish warehouses and factories before sending the finished goods to the lucrative Western European markets.
Joining in with the fight against the trade is HMRC who say that they are determined to stamp out illegal tobacco.
“HMRC will not cease in its efforts to track down cigarette smugglers and stop their activities,” said a spokesperson.
“In particular, the illicit trade in tobacco, alcohol and pharmaceuticals is more attractive to organised criminals than, for example, drug trafficking, given that it is a low-risk and high-value activity.
“The high profit margins associated with illicit trade are used to fund other criminal and terrorist activities, a fact not widely understood by the British public.”
Each year HMRC and Border Force prevent billions of cigarettes and hundreds of tonnes of illegal tobacco entering the UK. Inland, HMRC and Trading Standards departments make further seizures.
In the past five years (2011/12 to 2015/16) HMRC and Border Force have seized more than 8 billion cigarettes and close to 2,000 tonnes of RYO.
It’s not difficult to understand why smokers would seek cheap tobacco products. Examples discovered here in Southampton included a counterfeit packet of Amber Leaf tobacco that was sold to a researcher for £4 when its normal cost would be around £16.60 from legitimate traders.
A pack of 20 Mayfair Cigarettes was handed over for just £3 when the legitimate cost would be £8.39.
UK taxes on tobacco, and therefore prices, are among the highest in the world, and have been so for many years. This has led to many smokers seeking out cheaper alternatives, sometime purchasing products when they go abroad, or from ‘black market’ channels.
For example, a 10g pack of Roll Your Own (RYO) costs around £3.90 in the UK while 50g of RYO can be bought in Belgium for around £4.35 – five times the quantity for only a little bit more.
Test purchasing carried out as part of our research has shown illegal cigarettes are on sale in Southampton for as little as £2.50 per 20, with RYO on sale for £4.00 per 50g.
HMRC estimates that £2.4 billion in tax revenue was lost because of tobacco smuggling in 2015/16. Since the turn of the century (2000/1 to 2015/16) the total revenue loss is £41 billion, money that could be used to build hospitals and pay for schools as well as social care.
And illegal tobacco not only represents a loss of tax revenue to the Treasury but also a loss of turnover and profits to the UK’s estimated 57,000 retailers that sell tobacco products with 6,900 here in the South East.
The Daily Echo has worked with tobacco company JTI in its investigation into illegal tobacco sales in Southampton.
Steve Wilkins, JTI Anti-Illegal Trade Operations Director said: “The link of illegal tobacco to serious and organised crime is very real and together with the crime-fighting charity Crimestoppers, JTI hopes to rid our streets of illegal tobacco and stop criminals infiltrating our communities.”
Since September 2013, JTI has removed gantries from 26 retailers convicted of selling illegal tobacco.
“JTI has had to do this as we continue to see some independent retailers get sucked into this illegal trade, giving honest hard-working retailers a bad name. If this type of crime continues, customers who buy tobacco products will lose faith and trust in their local shops as the perception grows that the independent trade is rife with ‘dodgy cigarettes”, added Mr Wilkins.
“Smokers buying cheap fake cigarettes and tobacco on the streets of the UK may be getting more than they bargain for as these fake imitations has been found to contain asbestos, mould, dust, dead flies, rat droppings and even human excrement.
“JTI fully supports efforts to rid our streets of illegal tobacco and stop criminals infiltrating our communities, and would urge local residents to work with community groups and trading standards to eradicate this type of activity.”
A spokesperson for Crimestoppers told the Echo: “The link this trade has to serious and organised crime is very real, and with the help of information from the public on those supplying and selling these fake products, our aim is to ensure your community is a safe place to live.”
What do those trading and dealing in illegal tobacco risk?
• Criminal prosecution with a custodial sentence of up to 7 years (upper level crime)
• Financial wrongdoings penalties of up to 100% of the duty due (resulting from the sale of goods which are subject to unpaid duty) In 2015/16, 1,335 tobacco related wrongdoing penalties were issued
• Fines of up to £5,000 for selling illicit tobacco not bearing the UK duty paid fiscal markings
• Vehicle seized (if illicit tobacco products are transported in it)
Additional sanctions following successful prosecution
• HMRC may make confiscation orders under the Proceeds of Crime Act 2002
• Prohibition on the sale of tobacco products for up to 6 months
• Revocation of the store’s alcohol licence
• National Lottery terminal may be removed
• If JTI tobacco gantry is in situ, this may be removed and any further assistance from JTI terminated.
The tobacco industry has identified four areas that make the UK an easy target for organised criminals to sell illegal and fake tobaccoproducts:
Plain packaging for packets of cigarettes introduced recently into the UK makes it much easier for gangs to produce fake tobacco products with no complicated designs to copy.
High taxes in the UK means more are tempted to buy cheaper illegal products from rogue traders.
The EU’s Tobacco Products Directive bans small packets of cigarettes and rolling tobacco which widens the price gap even more between legal and fake products.
The recent introduction of the retail display ban at stores where shelves are required to be hidden from view blurs the distinction between legal and fake tobacco products.
Anyone with information about this type of crime should contact Crimestoppers anonymously on 0800 555 111.