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 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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