Smuggling and health

While the primary focus of HMRC and UKBA activity is reducing revenue losses from smuggling, it is important to remember that revenue-raising is not the only driver for the UK’s tobacco taxation policy. The price mechanism is generally accepted to be the most effective
population-level policy lever available to Government to combat smoking.

High levels of taxation of tobacco products, resulting in high prices, have been a feature of tobacco policy in the UK. The UK has some of the most expensive cigarettes in the world. Evidence from the World Bank shows that price has a greater impact on consumption of tobacco than any other factor, suggesting that a 10% rise in price can lead to a 4% fall in prevalence. Price responsiveness is considered to be even greater among young people and more deprived groups.

The Government recently announced a commitment to develop a new national tobacco control
strategy to further reduce smoking prevalence. Over the last few months the Department of
Health (DH) has been consulting on a package of measures which includes a number of options
to reduce the availability of tobacco products. HMRC has been working closely with the DH to
consider any consequences these options may have for the illicit market, and will continue to do
so as these options are developed.

Despite the significant success of HMRC and the UKBA in reducing smuggling, the availability of cheap, illicit tobacco in communities undermines the effectiveness of this policy and the Department of Health’s efforts to reduce smoking prevalence, especially among young people and those in routine and manual workers groups. Illicit tobacco products are available in our communities at less than half the price of their duty paid equivalent.

Illicit tobacco products are available at a number of locations in communities across the UK, including in the workplace, in pubs, in street markets, at car boot sales and on the street. Smuggled tobacco is also made available in some communities from people’s own homes.
This creates a completely unregulated distribution network, and makes tobacco far more accessible to children and young people.

One of the priorities for HMRC’s new nationwide network of inland enforcement teams, in collaboration with other enforcement agencies, including local authorities and the Police, will be to tackle this low level supply of illicit tobacco products. This will provide visible assurance to
local communities that, as well as focusing on cutting off the supply of illicit tobacco products through effective upstream intervention, the Government’s strategy is also to take strong, effective action against those who peddle illicit tobacco in our communities.

One response to “Smuggling and health

  1. Your story was rlaely informative, thanks!

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