Between October to December 2023, the Tobacco Manufacturers’ Association commissioned a nationwide poll of 12,000 smokers on their attitudes, awareness and understanding of illegal tobacco.
This is the ninth year that this survey has been carried out and trends are presented where possible.
The illegal tobacco market is now growing despite repeated Government attempts to curb the problem. While the number of adult smokers in the UK has decreased by 30 per cent (to 12 per cent of the UK population) since the TMA commissioned its first "Anti-Illicit Trade Survey" in 2014, the number of respondents who claim to purchase non-UK duty paid tobacco has reached a new high point of 80 per cent, with one in five smokers only buying "branded" tobacco, even though all legal tobacco has been sold in plain packaging in the UK since 2016 – eight years’ ago.
Repeated tax rises coupled with continuing "cost-of-living" pressures have had a cumulative impact on consumer spending behaviour, and pushed many consumers towards buying illegal tobacco through criminal channels. This should come as little surprise to the Government, with price sensitivity being such a key driver of consumer spending patterns.
To put it into context, in January 2024, the mean average RRP for a 20-pack of legal cigarettes was £15.26 compared to between £3.00-£6.00 upwards for a 20-pack of "illegal" cigarettes, and the mean average RRP for 50g of legal Roll-Your-Own was £34.84 compared to between £5.00-£8.00 upwards for 50g of "illegal" Roll-Your-Own.
The illegal tobacco market has "bounced back" and adapted after the Covid pandemic, with the purchasing of illegal tobacco online and via social media channels becoming commonplace.
Prohibition doesn’t work
The Government’s proposed "phased generational ban" (or de facto prohibition) on any adult born after 31 December 2008 from ever legally being able to buy tobacco risks pushing an even larger share of the UK’s tobacco market underground – with every passing year – into the hands of the organised criminal gangs that spread violence and disorder up and down our country.
Numerous retail representative organisations, including USDAW, Scottish Grocers’ Federation, British Retail Consortium, Retail Trust and the National Federation of Retailers have all recently evidenced that UK retailers are facing unprecedented levels of verbal abuse and physical violence from customers, with "age-related sales" already representing the most prominent trigger for violence and abuse towards staff – only behind shoplifting.
There are real concerns among retailers that the introduction of a phased generational ban will lead to an escalation in more threatening anti-social behaviour against retail staff, as the weight of enforcement will fall entirely on their shoulders, with no penalty proposed for consumers who try to break the law and buy tobacco when they are under the new legal age threshold, which will change each year, every year.
The Government has committed an additional £100 million over five years, spread between HMRC, Trading Standards and Border Force to clamp down on criminals trading illegal tobacco. Given by the Government’s own HMRC estimates, the illegal tobacco trade already costs at least £2.8 billion a year in lost taxes (and over £54 billion in total since 2000) it is very difficult to see what sustained impact this funding will make.
"The illegal tobacco market in the UK has now reached an inflection point," said Rupert Lewis, Director of the TMA. "In previous years, the TMA Anti-Illicit Trade Survey has painted a picture of a stubbornly resilient illegal tobacco trade, which in spite of overall smoking rates down-trending year-on-year, has remained resistant to decline.
"The latest evidence in this year’s survey, canvassing the views of over 12,000 adult smokers across the UK, points to the highest increase in consumers who are buying illegal tobacco at least once in the last year – 80 per cent of those surveyed – and even more worrying, one in five respondents claim to only buy branded tobacco products which have been illegal in the UK since 2016.
"Repeated increases in tobacco taxes and ongoing cost of living pressures are changing consumer behaviour and driving more smokers to buy illegal tobacco through criminal channels. This is especially alarming, given the Government’s intention to introduce a ‘phased generational ban’ on the purchase of all tobacco from 1 January 2027.
"I believe that there will be profound and far-reaching repercussions for consumers, retailers, law enforcement agencies and communities across the UK if a phased generational ban becomes law. In time, it will push the entire UK tobacco market underground, and I urge the Government to reflect hard on the consequences of this policy decision and the lasting impact that it will have on the UK."
Steph McGovern
Lucy Edwards