A new survey of over 12,000 adult smokers has revealed the extent of how consumer behaviour has shifted to alternative ‘non-shop’ sources to avoid paying relatively high levels of taxation on tobacco products in the United Kingdom.
The poll, by Mitchla Marketing/Survey Sampling International, found almost one in five smokers (17%) now regularly buys their tobacco from abroad to avoid paying UK duty and eight in ten (78%) smokers said they had no objections to buying non-UK duty paid tobacco as long as it was from a legal source.
Over half of smokers (51%), around five million adults in the UK, said that they plan to buy tobacco products from abroad and bring back as many as they legally can, although almost half (47%) admitted they did not know the rules concerning duty-free allowances.
Despite smokers bringing back as many cigarettes as they legally can from their holiday, 60% admitted they were nervous about buying from abroad in case the product was counterfeit.
Over the past five years, taxes on tobacco products have risen 40%, and tax now accounts for 80% of the price of a packet of cigarettes. This is the highest amount of taxation on tobacco in the whole of the EU. Smokers in Moldova pay 57p for 20 cigarettes.
This surge in ‘non-shop’ sources has caused the Treasury to lose an estimated £2.1bn of tax revenue every year because of the shift to non-UK duty paid products. A further £500m is lost to cross border shopping each year.
Giles Roca, Director General of the Tobacco Manufacturers’ Association, has called on the new cross-departmental ministerial group set up to oversee a strategy to combat illicit tobacco to review the “failed policy of high taxation on tobacco products which has benefited no one other than criminals and terrorists who run the black market”.
The tobacco industry has launched an advertising campaign at airports to remind passengers jetting off on their summer holidays that bringing tobacco products into the UK and selling them on is a criminal offence. The campaign runs until September.