A survey of 12,000 smokers commissioned by the Tobacco Manufacturers’ Association paints a shocking picture of the scale of the illegal tobacco market in the UK.
The survey points to five central findings:
- 83% of respondents bought tobacco that was not subject to UK tax – compared to 71% when the TMA first ran the survey in 2016.
- 74% bought cheap untaxed tobacco from ‘under the counter’ retail sources at least once a month.
- 21% surveyed claimed to routinely buy cheap untaxed tobacco through the internet and social media sites such as Facebook (even though it is against Meta’s own terms and conditions to sell tobacco on their platforms).
- 20% of respondents only buy "branded" cigarettes and Roll-Your-Own tobacco, even though all legal tobacco has been sold in plain packaging in the UK since 2016.
- 62% of respondents did not think a "generational ban" on buying tobacco (i.e. no one born after 31 December 2008 would ever legally be able to buy tobacco) would be enforceable.
Number of smokers buying untaxed tobacco is at an all-time high
While smoking rates may be continuing to decline, the number of smokers who are buying untaxed tobacco continues to rise with 83 per cent of those surveyed, claiming that they bought tobacco that was not subject to UK tax in 2024. This ranges from the lowest region (79 per cent in Wales) to the highest region (92 per cent in London).
Repeated tax rises are pushing consumers towards buying cheaper untaxed illegal tobacco
In 2023, the Government pushed through the largest tobacco excise increases on record, in the March Budget and November’s Autumn Statement, resulting in a combined £1.61 increase on a 20-pack of cigarettes and £3.96 on 30-grams of rolling tobacco.
To put this in context, in September 2024, the average price for a 20-pack of legal cigarettes was £15.88 compared to between £3.00-£6.00 for a 20-pack of ‘illegal’ cigarettes, and the average price 50g of legal Roll-Your-Own was £34.43 compared to between £5.00-£8.00 for 50g of “illegal” Roll-Your-Own.
The new Labour Government will likely decide whether to commit to introducing a “one-off increase” of £2.00 per 100 cigarettes or 50 grams of rolling tobacco, announced by the last Conservative Government, in this year’s March Budget, which will take effect from October 2026. So before this Government has even delivered its first Budget, tobacco prices are already on track to reach £19.00 for a 20-pack of cigarettes in the near future. No wonder consumers are increasingly buying cheaper untaxed illegal tobacco through criminal channels. The price gap between legal and illegal products is now eye watering.
The Government claims that the illegal tobacco market is in decline. This year’s TMA Anti-Illicit Trade Survey paints a very different picture with the purchasing of illegal tobacco becoming not only normalised, but a preferential alternative source for a growing number of consumers.
It seems very likely, based on the evidence from this survey, that further tax rises on tobacco will only result in the illegal tobacco market increasing.
The Labour Government is repeating Conservative mistakes
Last year, Rishi Sunak proposed a “generational ban” on any adult born after 31 December 2008 from ever legally being able to buy tobacco. He ignored the collective and individual voices of all organisations representing retailers and shopworkers – both large and small – including USDAW, Scottish Grocers’ Federation, British Retail Consortium, Retail Trust and the National Federation of Retailers, over their profound concerns that the implementation of a generational ban would escalate existing record levels of abuse, violence, intimidation and theft already levelled at retailers.
According to the latest research from the Retail Trust, four in 10 shopworkers want to quit their roles in retail entirely due to the soaring levels of violence and abuse that they receive. Given the weight of responsibility for enforcing a generational ban will fall on the shoulders of retailers, the real fear is that shopworkers will have had enough and will choose to walk away from retail, rather than try and enforce a law that will bring misery to their working lives.
“The illegal tobacco market in the UK is well-established and is growing in size,” said Rupert Lewis, Director of the TMA. “The Government estimates that it has cost UK-taxpayers over £52.8 billion in lost taxes since 2000, but we fear this is an underestimate. This is much needed money that could be spent on fixing public services, is instead lining the pockets of organised criminals.
The Government continues to turn a blind eye to the threat of illegal tobacco and the reality that it is fast becoming a major revenue stream for criminality, alongside trading illegal drugs, people trafficking and sexual exploitation.
“A Home Office funded report from the National Business Crime Centre published in July, stated ‘with the increase in tax on tobacco products and the proposed generational ban, the demand for stolen and counterfeit tobacco is set to increase dramatically’.
“This assessment confirms the view of many retailers and members of law enforcement, that the only beneficiaries of the roll-out of a generational ban will be organised criminals, as in due course the whole UK tobacco market is pushed underground into their hands.
“The new Government needs to listen to retailers and not make the same mistake that Rishi Sunak made. The consequences of ever increasing the cost of legal tobacco and implementing a generational ban will result in major unintended consequences which will have a sustained impact across the UK for years to come.”
