Fast Facts

Smoking Prevalence

  • Around 10 million adults smoke in the UK, which represents around 1 in 5 UK adults.

 

UK Tobacco Sector 

  • The UK tobacco sector supports the employment of tens of thousands of high value jobs.
  • Tobacco manufacturers spend in the region of £158 million per annum in the UK on research & development, much of which is spent on next generation products like e-cigarettes.

 

Tobacco and the Retail Sector

  • Smokers generate in the region of 22% of the weekly convenience store profits, which equates to £615.80 per week or 86 staff hours (at the current rate of the National Living Wage).
  • 21% of all transactions that take place in small and independent stores involve the purchase of tobacco products.
  • As a percentage of total revenue available on a premium pack of cigarettes, retailers make a margin of 25%.
  • Weekly tobacco profits represent in the region of 9% of total weekly profits for convenience stores.

 

Tobacco Taxation

  • Tobacco manufacturers contribute approximately £12 billion every year to the UK Exchequer in tobacco taxes (including VAT).
  • Since 2000, the tobacco industry has contributed more than £170 billion in tax revenue to the UK Exchequer.
  • On average, 80% of the price of a packet of cigarettes in the UK is taxation, though it is as high as 90% on some brands.
  • The Royal United Services Institute (RUSI) contends that “this policy of high taxation has the unintended yet inevitable consequence of generating an illicit market that generates substantial profits for sellers”.
  • Martin Taylor, former Smuggling Tsar to Gordon Brown, stated in a report made public in 2011 that “The principal cause of the [tobacco] smuggling, of course, is the high level of duty in the UK”.

 

Illegal Tobacco Trade

  • HM Revenue & Customs estimates that the illegal tobacco market cost the taxpayer £2.4 billion in 2015/2016, which is an increase of £600 million compared to 2014/15.
  • Illegal tobacco sales cost the UK retail sector as a whole approximately £3.4 billion per annum and £30,000 per convenience store.
  • TMA research suggests that 41% of smokers in the UK purchase illegal tobacco products on a regular basis.
  • European Anti-Fraud Office (OLAF) research demonstrates that 70 per cent of UK consumers buy black market tobacco products because they are cheaper than their legal counterparts.

 

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