Illicit tobacco trade “worth £50bn”

The illicit tobacco trade could be costing the world’s retailers, manufacturers and governments as much as £50bn annually, according to Philip Morris’ corporate affairs department. 

The tobacco giant, which makes Marlboro and Chesterfield, told Wholesale News that the cost to the UK alone was over £2bn. “Over £2.2bn is lost to HMRC thanks to smuggled, counterfeit or ‘bootleg’ [illicit brands]tobacco,” said a spokeswoman. “Around 16.5% of UK tobacco sales are now illicit, with the problem most acute in London, the West and East Midlands, and South and west Yorkshire.”

The illicit trade was now so profitable that hardened criminals were willing to take bigger and bigger risks. Pirated and bootleg cigarette “brands” were themselves now being counterfeited, she said.

She added that plain packaging, if adopted, would drive still more cash into the hands of illicit traders. “It will also adversely affect everyone’s margins and lead to yet more downtrading,” she said.

Philip Morris UK amp; Ireland MD Martin Inkster also revealed that Marlboro, as well as being the UK’s biggest-selling premium cigarette (and the world’s biggest cigarette brand since 1972), was also the UK’s seventh largest grocery brand, with an annual retail value of £844m.

  • Japan Tobacco International has published a comprehensive report, The Billion Pound Drop, which outlines the full impact of tobacco smuggling and other forms of illicit trade. Visit www.jti.com/uk for more info

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