Revealed: Largest ever survey shows Scotland a hotbed of illegal tobacco

Revealed: Largest ever survey shows Scotland a hotbed of illegal tobacco

• 70% of Scottish smokers avoid paying taxes on tobacco
• 40% regularly bought from the black market in the last year

Embargoed until: 00:01 Wednesday 1st November

The largest ever survey of smokers in Scotland has found that the vast majority admit to buying untaxed tobacco with around 40% regularly buying from the black market in the last year. The findings show that high Government taxes that can make up 90% of the price of certain packs of tobacco, is the chief reason why smokers are searching out cheaper often illegal alternatives. The survey also found that measures such as plain packaging supported by both Holyrood and Westminster governments and introduced in the last year were making the problem worse.

Key findings for Scotland:

Illicit tobacco is very prevalent in Scotland
• 70.6% of smokers in Scotland buy tobacco from sources that won’t have paid UK tax (including abroad and at duty free) (UK: 72.5%)
• 38.5% of smokers in Scotland bought cheap tobacco from illegal sources such individuals in a pub or off the internet (UK: 42%)
• 43% of Scottish smokers agree that the recent introduction of plain packaging and ban on small tobacco packs made them more likely to buy from the black market (UK: 45%)
• 17% of smokers in Scotland have seen illegal tobacco being bought or sold in their local area (UK: 20%);
o But only 11% of these people reported it to the authorities (UK: 12%)
o 70% saying it was ‘none of their business’ (UK: 64%)
The prevalence of illicit tobacco in Scotland may worsen if there are further tax rises and due to new regulations:
• 90% of smokers in Scotland think tobacco prices are too high (UK: 88%)
• 53% of smokers in Scotland agree that rising tobacco process tempt them to buy untaxed tobacco (UK: 57%)
• 43% of smokers in Scotland agree that recent regulatory changes to packs including minimum pack sizes and plain packaging have made them more likely to purchase untaxed tobacco (UK: 45%)
In addition, government policies appear to have alienated smokers so they are not concerned when they know illegal tobacco is being sold in their local area. Just 11% of Scottish smokers who had seen illicit tobacco reported it and 70% of those who did not say that it is because it is ‘none of their business.’
Overall this survey confirms that the policies originating from both Westminster and Holyrood do not have the support of smokers and are likely to be a large contributing factor to the high level of illegal tobacco.
Responding to this year’s findings, TMA Director General Giles Roca, said:
“These results reveal the true extent of how the Government’s high tax policy, in creating some of the highest tobacco prices in Europe, has continued to push Scottish smokers to buy from non UK duty paid and illegal sources. High taxes have cost the Treasury billions of pounds in lost revenues whilst giving a boost to the criminals who are behind the illegal trade.
“The regulations that came fully into force this year banning small tobacco packs and introducing plain packaging that were backed by both Westminster and Holyrood are also making the problem worse by pushing smokers towards the illicit market rather than encouraging them to quit.
“There is a real risk that the problem could be made worse if the Government decides to increase tobacco duty for a second time in nine months in the upcoming Budget.”

Notes to Editors:
1. Full findings with UK, devolved and regional comparisons can be found at
2. The Tobacco Manufacturers’ Association (TMA) is the trade association for the UK tobacco industry. The TMA’s members are British American Tobacco UK Ltd., Imperial Tobacco Ltd. and Gallaher Ltd. (a member of the Japan Tobacco Group of companies).
3. Over the summer of 2017, the TMA commissioned a survey of over 12,000 smokers across the UK with 1,107 in Scotland.
4. The survey focussed on smokers’ attitudes, behaviours and awareness towards illicit tobacco.
5. The survey questions received input from HMRC and other stakeholders.
6. This is the fourth year the TMA has surveyed smokers in this way and the results for this year can be compared where appropriate.
7. HMRC estimates that the tobacco tax gap for 2016/17 was £3.1 billion[1], the second single highest loss to the Treasury after VAT avoidance, the proportion lost in Scotland is around £240 million each year.
8. The link between rising tobacco duty and the purchase of non-UK duty paid (NUKDP) tobacco is well understood. The Royal United Services Institute noted that the “policy of high taxation has the unintended yet inevitable consequence of generating an illicit market that generates substantial profits for sellers”[2]

A BBC video clip is available here

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