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Tobacco smuggling falls despite industry protests over tax rises

Rates of tobacco smuggling into the UK have fallen despite earlier claims from the tobacco industry that tax rises would prompt an increase in the illicit trade, official figures show.

An estimated nine per cent of cigarettes consumed in the UK in 2010/11 were illicit, compared with 11 per cent in the previous year, according to HM Revenue & Customs.

There was also a reduction in smuggled hand-rolled tobacco, from 42 per cent to 38 per cent.

Tax revenues have simultaneously grown while the use of illicit products has declined.

Robin Hewings, Cancer Research UK’s tobacco policy manager, commented: “The tobacco industry claims that cigarette smuggling is ‘booming‘, ‘set to grow‘ and that the UK is becoming the European ‘hotspot‘.

“Today’s figures show the opposite. This is yet another instance of the tobacco industry making claims that turn out not to be true.”

Rates of tobacco smuggling have been falling for a decade now, he added.

He explained that the decline has been achieved thanks to improved enforcement and joint working between governments to prevent the tobacco industry from facilitating the illicit trade.

He said: “The tobacco industry claims that plain packs will increase tobacco smuggling.

“Independent experts are clear their claims do not make sense. Today’s figures show why it is generally best not to trust what they say.”

Tobacco duty was increased by inflation plus one per cent at the March 2010 Budget, followed by a rise of inflation plus two per cent at the March 2011 Budget.

After those two Budgets, lobbyists for the tobacco industry repeated their claims that increased taxation and tougher regulations on tobacco use would consequently increase illicit trade.

The Tobacco Manufacturers Association (TMA) suggested after the 2010 Budget that “the largest tax increase on tobacco products in 10 years” would stimulate increased illicit activity.

After the 2011 Budget the TMA referred to the tax increase as “a complete lack of joined-up thinking as taxation is the acknowledged driver of the illicit tobacco trade”.

Commenting on the latest figures, ASH chief executive Deborah Arnott said the ongoing decline of the illicit tobacco trade is “good news for the British economy”.

She added: “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.”

Copyright Press Association 2012

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