Survey reveals business cost of tobacco smuggling

Tobacco smuggling costs British shopkeepers £1,000 a week and more than one quarter of shopowners have considered closing down as a result, according to a survey out today.

The Tobacco Alliance survey of 19,000 retailers found that 26% of shopkeepers considered closing down and nine out of 10 had registered reduced trade due to revenue lost to smuggling.

The drain of profits away from reputable businesses has also meant job losses for one quarter of the businesses surveyed.

And despite a government and Customs crackdown on illegal traders, 93% of the shopkeepers surveyed said they believed the authorities were not doing enough.

A Customs spokesperson said the results of the survey were "disappointing" – more so as the growth in tobacco smuggling had not only been stopped, but had actually been reversed.

While the survey found that shopkeepers believed less duty on cigarettes was the key to reducing smuggling, Customs say the best thing newsagents can do is pass on any information about bootlegging in their area.

"Most cigarettes smuggled into this country have had little or no tax paid on them, so freezing or cutting tax in this country would make no difference to the smuggling problem, and would only succeed in making cigarettes cheaper and increasing the smoking-related diseases which already kill 120,000 people each year," the spokesperson added.

Customs have said that, since implementing its Tackling Tobacco Smuggling strategy in March 2000, it had reduced the number of cigarettes successfully smuggled into the country by two and a half billion sticks a year - a drop of around 15% since the start of the strategy.

This effort had prevented potential revenue losses of £3 billion, which Customs say would have occurred had no action been taken.

"The last estimate of the market share of smuggled cigarettes was 18%, almost half the level it would have been had the Government taken no action," the spokesperson added.

Customs have now been set the target of reducing the cigarette illicit market share to 13% by 2007-08.

Anyone who has information on illicit trading should call Customs' 24-hour confidential freephone on 0800 59 5000.


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