HMRC tobacco seizures fail to stop illegal sellers

The volume of illegal cigarettes seized by HMRC has more than doubled in the past year according to RN analysis of newly released government statistics.

Despite an overall 64.4% increase in illicit tobacco seizures by HMRC Inland, the picture was reversed in hand-rolling tobacco alone, where the volume of seized goods fell by 40%. 

The latest news means HMRC Inland, Border Force and HMRC Overseas combined confiscated goods equal to 21.5% of the estimated £2.5bn illicit market. This represents an 11% increase in seizures, compared with a 4% annual increase in the total size of the illicit tobacco market.

When surveyed by RN on illicit tobacco sales in their local area, 80% of shop owners said they had seen no long-term impact. 

However, many reported that social media illicit sales were becoming the prevalent method in their area, even undermining the sales of illicit tobacco-selling shops in some instances.

Legitimate tobacco retailer Roger Dhilon from Fredrick Wines in Sunderland commented: “Illicit selling is mostly in pubs and homes now; this, combined with the threat of losing their licence, has helped push it out of stores near me.”

In instances in which the supply of illicit goods dries up in an area, retailers reported substantial short-term sales increases of between 20% and 200%, indicating that further gains by HMRC could lead to substantial sales boosts for legitimate stores.

However, the latest statistics support retailer criticisms that not enough is being done to target illicit sellers. Arrests by HMRC fell by 50% in the last year and the number of fines issued dropped by 11%.

An HMRC spokesperson claimed the illicit cigarette market has been halved and the illicit hand-rolling market cut by a third since 2000.

Tobacco Manufacturer’s Association director general Giles Roca said the seizures were “the tip of the iceberg” and claimed a change to taxation policy is the only way to tackle a resurgent illicit trade.

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