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.”
Convenience store body Association of Convenience Stores (ACS) today (30) has warned the Chancellor about the negative effects of the new National Living Wage (NLW) increase, a day after the Chancellor announced a pay rise for over 3 million workers next year, with NLW rates rising by 6.7 perc cent.
From April 2025, the NLW will increase from £11.44 to £12.21 while 18-20 National Minimum Wage will rise by £1.40 per hour to £10 - the largest increase on record, marking the first step towards a single adult rate.
ACS chief executive James Lowman said, “Our members are grappling with how to afford this inflation-busting increase in wage costs. The market remains tough, with many retailers reporting flat or declining sales while expenses like banking charges, credit card processing fees and energy bills are eating away at their profitability.
"More than ever, we need help from the Chancellor in the Budget. Without sustained and enhanced help on business rates, a reduction in National Insurance Contributions, and effective incentives to drive investment, our sector faces a challenging future. For some communities, this could mean the viability of their local shop is put at risk.”
Evidence provided to the Low Pay Commission by ACS earlier this year already found that to handle the increases in national wage increases, 53 per cent of retailers have reduced the amount they invest in their business, 53 per cent have been forced to increase their prices in store, and 47 per cent have had to take lower profits.
Baroness Philippa Stroud, Chair of the Low Pay Commission (LPC), stated that data already shows signs of employers finding it harder to adapt to minimum wage increases.
A Rossendale shop has had a licence bid rejected after repeatedly selling vapes to children and having illegal products on its premises.
Management at the Ibra Superstore at 34 Burnley Road, Bacup, have shown ‘no regard’ for children’s protection and safety, and have insufficient controls for licensing, Rossendale councillors have ruled.
Ibrahim Mohammad, director of the Ibra Superstore, had recently applied to Rossendale Council for a new premises licence. But the borough’s licensing sub-committee rejected his bid after a meeting which heard allegations from the police and trading standards officers.
The Burnley Road shop has been subject to various licensing changes and concerns in recent years. In the past, it was called Bacup Wines.
Ibrahim Mohammad, the applicant, attended the Rossendale licensing sub-committe meeting with his father,Amin Mohammad. Also there was PC Mick Jones, of Lancashire Constabulary, and Jason Middleton of Lancashire Trading Standards. Councillor Bob Bauld attended as an observer.
Mr Mohammad wanted a premises license for alcohol sales and opening hours from 8am to 11pm, seven days a week. He already had a personal licence. He said the Bacup shop would install a CCTV system, keep an incident log and a refusals record, check customers’ ages, display information about staff and give them regular training.
Trading standards officer Jason Middleton said Ibra Superstore Ltd was incorporated as a company in April 2023. Since then, trading standards had received 11 complaints about under-age sales and carried out visits.
Breaches included non-compliant vapes being found which broke a 2ml limit on the quantity of nicotine-containing liquid, no age checks and no information on display.
During one visit, Amin Mohammad tried to leave with a bag containing 10 illegal vapes. In test purchases by trading standards, an ‘Elf Bar’ vape was sold to a 14-year-old by Amin Mohammad and an illegal Hayati Pro Max vape to a 13-year-old by Ibrahim Mohammad. The shop claimed a phone call distracted staff during the 13-year-old’s purchase and illegal vapes came from ‘a man in car’.
Councillors heard different speakers, looked at written reports and also some video footage from the applicant. But they rejected the premises licence bid.
Giving their reasons, they stated: “There was a repeated history and pattern of behaviour regarding under-age sales of age-restricted items, such as tobacco products and vapes to children. You must not sell vapes to anyone under the age of 18. This is a criminal offence which the council takes very seriously.
“It is clear you breached the law by failing a test purchase operation in which you sold an illegal vape to an under-age child. The sub-committee feels that you have no regard to the protection and safety of children.
“The sub-committee feels that there is insufficient management control at the premises. There is no credible system to prevent under-age sales of age-restricted products and no measures in place to avoid harm to children and to prevent crime and disorder
“Therefore, given the number of incidents, the circumstances surrounding the incidents and the fact that the matter involves safeguarding issues relating to young, vulnerable minors, we consider that the seriousness of the incidents and the crimes committed against young children undermines the licensing objectives to prevent crime and disorder, and protect children from harm.”
The shop has the right of appeal to a magistrates court within 21 days of the date of the notice.
SPAR North of England retailer Dara Singh Randhawa’s family store has been awarded £100,000 of free stock after hitting all his targets since moving to the symbol.
Dara and his family, who have their SPAR store in Patrington in the East Riding of Yorkshire, joined SPAR through its association with James Hall & Co. Ltd in August 2023 having taken the decision to maximise the store’s potential.
It is a decision they have not looked back on, with sales increasing by up to 25% and margins also showing significant uplift in the last 12 months.
Key to the store’s improved performance is the complete overhaul of products available in-store, particularly the fresh food range, to better support people who live in Patrington and the surrounding area.
A new store layout and refrigeration, better Food To Go and meal deal options, a coffee machine, and a Calippo slush machine were also installed during a major refurbishment prior to launch.
Dara said: “Our move to SPAR has been excellent. We have seen fantastic sales uplift and the support from the team at James Hall & Co. Ltd has been brilliant. The £100,000 of free stock is the cherry on the cake.
“We have been very impressed with the Price Locked promotions, in particular. These give customers confidence to do bigger shops with us as they see value on our shelves and the products at the same prices for longer.
“At times over the summer when tourists and visitors to the area add trade, we have seen sales £6,000 a week higher than our average. This is against a backdrop of the popular caravan park in the village being closed almost all year.
“We are really pleased with the position we are in, and we will be looking to achieve more in 2025.”
Peter Dodding, Sales Director at James Hall & Co. Ltd and Chairman of the SPAR Northern Guild, said: “Congratulations to Dara and the Randhawa family on hitting their targets and earning £100,000 of free stock.
“We recognise switching brand is a big decision for a retailer which is why this isn’t a gimmick, and we offer this to all retailers who join the SPAR family with James Hall & Co. Ltd.
“As well as our £100,000 incentive, we also offer retailers the chance to achieve up to an additional £5,000 of free stock if they successfully refer a friend.
“These opportunities provide additional motivation to retailers alongside the comprehensive benefits that joining the SPAR brand brings with it.”
James Hall & Co. Ltd is a fifth-generation family business which serves a network of independent SPAR retailers and company-owned SPAR stores across Northern England six days a week from its base at Bowland View in Preston.
The government has on Wednesday announced its acceptance of the Low Pay Commission’s (LPC) recommendations on the rates of the National Minimum Wage (NMW), including the National Living Wage (NLW).
The rates which will apply from 1 April 2025 are as follows:
NMW Rate
Increase (£)
Percentage increase
National Living Wage (21 and over)
£12.21
£0.77
6.7
18-20 Year Old Rate
£10.00
£1.40
16.3
16-17 Year Old Rate
£7.55
£1.15
18.0
Apprentice Rate
£7.55
£1.15
18.0
Accommodation Offset
£10.66
£0.67
6.7
The recommended NLW rate is expected to equal two-thirds of median earnings and to have the highest real value in the history of the UK’s minimum wage. The increase in the 18-20 Year Old Rate narrows the gap between that and the NLW, in anticipation of the adult rate being extended to 18 year olds in future years.
“The government have been clear about their ambitions for the National Minimum Wage and its importance in supporting workers’ living standards. At the same time, employers have had to deal with the adult rate rising over 20 per cent in two years, and the challenges that has created alongside other pressures to their cost base,” Baroness Philippa Stroud, chair of the LPC, said.
“It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest-paid workers while taking account of economic factors. These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.”
Stroud admitted that the data show some signs of employers finding it harder to adapt to minimum wage increases.
“The tightening of the labour market since the pandemic has unwound, but the overall picture is similar to 2019. The economy is expected to grow over the next year, although productivity growth remains subdued,” she noted.
Business secretary Jonathan Reynolds said:
Good work and fair wages are in the interest of British business as much as British workers. This government is changing people’s lives for the better because we know that investing in the workforce leads to better productivity, better resilience and ultimately a stronger economy primed for growth.
The recommended increase in the 16-17 Year Old Rate restores that rate to its original value relative to the adult minimum wage. In line with previous recommendations, the Apprentice Rate will remain equal to the 16-17 Year Old Rate.
SPAR UK has announced the appointment of Michael Fletcher as its new managing director.
Fletcher spent 22 years at Tesco plc, where he held numerous senior commercial roles in the UK, Ireland and Asia. He joined Co-op Retail in 2013 where he held the position of chief commercial officer before moving on to become CEO of Nisa Wholesale, a role he held until 2022.
Since leaving Nisa, Fletcher has taken on several non-executive director and board advisory roles. He is also the founder and chief executive of Sleet Brush Limited, where he focuses on designing and implementing innovative solutions to complex retail and wholesale challenges.
“Michael has outstanding credentials in commercial, retail and FMCG sectors, with experience across various trading environments,” Nick Bunker, non-executive chair, SPAR Food Distributors Ltd, said.
“His professional capabilities and high standards consistently drive excellent business performance and operational resilience. We are delighted with his appointment and look forward his lasting and positive contribution to the SPAR business.”
Fletcher added: “SPAR is a globally recognised and respected brand, and I am thrilled to join the team. I look forward to supporting the ongoing strengthening and development of the SPAR proposition in the UK.”