Tobacco clearance (tobacco released for sale legally onto the UK market) volumes for cigarettes and rolling tobacco have plummeted since 2021, while black market tobacco has undergone an “explosion”, the Institute of Economic Affairs (IEA) has reported.
IEA pointed to tobacco clearance figures published by the government last Friday (27th February), which revealed that the number of cigarettes had plunged since 2021 following a series of large tax rises. IEA claimed that the decline could not be explained by the fall in the number of smokers, which had been much smaller, nor by smokers reducing their daily consumption.
The volume of manufactured cigarette clearances dropped by 46%, from 23.4 billion sticks in 2021 to a provisional 12.6 billion sticks in 2025, while the volume of rolling tobacco fell by 59%, from 8.6 million kilograms to a provisional 3.6 million kilograms over the same period. Converting kilograms of rolling tobacco into cigarettes using HMRC’s own methodology, IEA Head of Lifestyle Economics, Dr Christopher Snowdon, found that a provisional total of 19.8 billion cigarettes had been released for sale onto the UK market legally in 2025, less than half the figure recorded in 2021 (40.6 billion).
Since 2020, IEA observed that excise tax on cigarettes had risen by 73%, and excise tax on rolling tobacco had risen by 115%. Despite these significant tax rises, the group noted that tobacco duty revenues had fallen from £10.4bn to £7.9bn since 2021 and were now the lowest on record, after adjusting for inflation.
Dr Snowdon claimed that the “inescapable conclusion” was that the illicit share of the tobacco market had grown enormously since 2020.
He said: “The explosion of black market tobacco in recent years will not come as news to smokers, nor to anyone who pays attention to cigarette packs on the pavement and in beer gardens, but the dramatic decline in legal sales at a time when the number of smokers has been falling more modestly, is conclusive proof that we have a serious problem.”
