With the EU Tobacco Products Directive 2 now in full force, prompting concerns about a rise in illicit trade, Better Retailing answers five questions to help you tackle the illegal trade in your area.
How big is the problem?
Illicit tobacco is a growing problem for independent retailers. Thirteen per cent of cigarettes sold are illegal stock, while more than 30% of rolling tobacco comes from illicit sources.
Last month, JTI carried out test purchases in 400 stores, representative of 5,000 retailers across London, and discovered that one in eight are selling illicit tobacco. “This is consistent with similar campaigns we’ve carried out across the UK,” says Steve Wilkins, JTI anti-illegal trade operations director. “The true picture is probably higher as dishonest retailers will only supply illegal tobacco to regular customers.”
The effects of illicit tobacco go far beyond the high street. Peter Nelson, anti-illicit trade manager at Imperial Tobacco, says: “Far from a victimless crime, the illicit trade affects honest retailers, damages communities and funds organised criminal activity.”
Will illicit trade get worse?
The recent changes in tobacco legislation, such as a ban on branded packaging and smaller packs, has been slammed by retailers and suppliers for being a gift to the illicit trade.
Australia is one of the only other countries where tobacco branding is banned. “We’ve seen a 20% increase in illicit trading since plain packaging was introduced in Australia in 2012,” says Nelson.
This is because there is now one set blueprint for all illicit traders to follow when creating fake packs of tobacco.
“The branding ban is the counterfeiters’ charter,” explains Wilkins. “The consumer is now faced with having to pay double what they normally pay. If they want to maintain the same budget they may look to the illicit trade.”
What are suppliers doing to help?
Earlier this year, Imperial Tobacco partnered with the NFRN and Federation of Wholesale Distributors to drive awareness of its ‘Suspect it? Report it!’ campaign.
Nelson says: “By using information about a drop in cash & carry sales, tobacco manufacturers can commence investigations.” Imperial has also launched a campaign that promotes the impact sniffer dogs have in helping track down illicit tobacco.
Wilkins says: “We take a zero-tolerance stance to retailers selling illicit tobacco.”
Both JTI and Imperial have removed multiple gantries from convicted illicit traders.
What illicit tobacco is most common?
Illicit tobacco is defined as any tobacco that is non-duty-paid, but illicit tobacco can be packs that have been smuggled into the country, or more dangerously, fake or counterfeit brands.
“We’re seeing a growth in counterfeit, whether that’s a growth in cigarettes or RYO,” says Wilkins. “There’s more production taking place in mainland Europe, central-eastern Europe and Poland, but we know there are production sites in the UK too.”
Illicit tobacco operations have become more sophisticated in recent years. Nelson says: “The professionals are moving in. We’ve seen systems where hydraulics are built into the floor. Then there are metal doors that look like fire doors, which have illicit tobacco stored in the middle.”
What can I do?
Insight from retailers is key to getting successful convictions for illicit trading, even though it takes time from initial report to punishment.
“Retailers can call Crimestoppers on 0800 555 111 or HMRC on 0800 788 887, or go online,” says Wilkins. “Make sure you only purchase products from a respectable wholesaler. If something is too good to be true, it probably is.”
Nelson agrees: “Retailers have an intimate knowledge of what’s going on in their communities. This is a big shared problem for retailers, the Government, the industry and society.”
You can also call Retail Express on 020 7689 3379 to report illicit trade. We will pass on the information to the authorities and help you Smoke Them Out.
Retailer Views
“Illegal cigs killed our appetite for business and we sold our shop two months ago. I miss the customers that I’ve known since I was a teenager. I was concerned when TPD2 came in, especially with the big price increases in tobacco pouches. The punishment out there is not good enough to tackle the illicit trade.”
Satul Parekh, Northampton
“I believe that the new legislation will aid the illicit trade. Most of it around here is off the back of the van and in the pubs rather than in the shops. It seems to have cleaned up a little, but I’m worried that TPD2 and plain packaging will increase it again.”
Alan Ficham, One Stop, Attleborough, Norfolk
“Illicit trade may be easier to carry out now because they’re all in generic packs, so there will be more room to get away with it. We haven’t seen that yet, thankfully.”
Mehmet Guzel, Simply Fresh Bethnal Green, East London
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