Independent tobacco sales down by up to 20% due to illicit trade

A RETAIL Express investigation has revealed the extent of the damage the black market is doing to independent retailers’ trade in two of the UK’s illicit tobacco hotspots.

Businesses in south London and the north-west of England told us the supply of illegal tobacco is endemic, with ‘under-the-counter’ offers that are freely available in certain pubs and shops taking tobacco sales away from responsible retailers.

With the EU voting next month on a potential ban of flavoured cigarettes and smaller pack sizes, retailers fear the illegal trade operating outside their shops will grow.

One south London retailer, who asked not to be named, said: “Most of the illicit cigarette selling goes on in local pubs, businesses, snooker halls and in people’s houses.”

Retailer Ryan Abrahams said tobacco sales this year are down by 20% year on year at his store in Bermondsey, London, because of the black market.

Eu plans will drive people to the black market like never before”

Under the EU’s Tobacco Products Directive, 10-packs of cigarettes and hand-rolling tobacco pouches of less than 40g would be banned. Currently, 52% of all cigarette packs sold are under-20s and 92% of hand-rolling sales are pouches of less than 40g.

One retailer in Burnley, Lancashire, said the EU’s plans would drive people to the black market like never before.

“I sell Golden Virginia Amber Leaf 50g rolling tobacco for £17 but people come in and tell me they can buy it for £10 in other shops. I tell them I just don’t have it. Lots of people get it from duty free and try to sell it to me.”

Jeremy Blackburn, head of communications at Benson & Hedges supplier JTI, told Retail Express: “If you are asking the 12.5g rolling tobacco consumer to pay £8.50 more for a pack of rolling tobacco, and if you listen to what retailers are saying about what’s happening outside their door, it is easy to see where the smoker will go to get their tobacco.”

He urged responsible retailers to report illicit trading to stop the black market ruining the name of independent convenience stores.

He added: “Retailers need to deal with this issue because, with the display ban on the horizon, those shops getting involved in selling illegal cigarettes are building the perception that customers do not know what they are buying at independent shops.

“If that is the case, independents will lose out to the high-street multiple.”

Punishments for selling tobacco that does not comply with the UK labelling regulations can be a fine of up to £5,000 or a six-month prison sentence, while the maximum penalties for selling counterfeit goods are up to 10 years in prison and an unlimited fine.