Cocker spaniels Bran and Yoyo with the full seizure. (Image: Kent Police / SWNS)
The UK’s black market in tobacco is booming leaving a £2bn hole in government finances as tax revenue has plummeted whilst the number of UK smokers has virtually stayed the same. New figures released today show that illegally smuggled tobacco in the UK “is out of control” with the government urged to “wake up” to the startling figures.
Legal tobacco sales have nearly halved since 2021 despite little change in the number of smokers The number of cigarettes bought on the legal market fell by 45.5% between 2021 and 2024 whilst over the same period the number of smokers declined by just 0.5% The Institute of Economic Affairs say the only plausible explanation for this can be a rapid growth in tobacco sales on the black market. Dr Christopher Snowdon said: “Official figures recently published by indicate a huge rise in illicit tobacco sales in the UK since 2021.
Revenue seize rolling tobacco worth €3,888,000 at Dublin Port (Image: Irish Mirror)
Don’t miss…
“The number of duty-paid cigarettes sold plummeted from 23.6 billion in 2021 to 13.2 billion in 2024, a decline of 44.4%. In the same period, sales of duty-paid hand rolling tobacco (HRT) have dropped from 8.6 million kilograms to 4.5 million kilograms, a decline of 47.6%. Overall, the number of cigarettes bought on the legal market fell by 45.5% between 2021 and 2024.
“This unprecedented decline in legal tobacco sales occurred despite the number of smokers falling only modestly. When population growth is taken into account, the number of smokers declined by just 0.5 percentage points between 2021 and 2024, a relative decline of 5%. Nor can the decline in legal sales be explained by smokers consuming fewer cigarettes. Research published last year found that daily cigarette consumption has remained stable since 2020 at around 10.5 cigarettes per smoker on average.”
Smoking prevalence figures for 2024 have not yet been released by the Office for National Statistics but in their absence, researchers used data from the Smoking Toolkit Study which surveys 1,700-1,800 adults every month to produce estimates of smoking in England, Scotland and Wales.
In England, the average smoking prevalence estimate in 2021 was 14.7%, falling to 14.2% in 2024. Extrapolated across the UK, this implies a small decline in the number of smokers, from 8.31 million in 2021 to 8.27 million in 2024, once population growth is accounted for.
Millions of cigarettes are seized by police every year (Image: -)
Don’t miss…
There were four significant increases in tobacco duty between October 2021 and October 2024, with the minimum excise tax on cigarettes rising by 39% and duty on HRT rising by 76%. In a classic example of the Laffer Curve, these tax hikes have not led to increased revenue. On the contrary, cigarette duty revenue has fallen by 20% and HRT duty revenue has fallen by 19%. This means overall, tobacco duty revenue fell from £10.4 billion in 2021 to £8.4 billion in 2024.
Dr Snowden added: “The only plausible explanation for the collapse in legal tobacco sales is that there has been rapid growth in tobacco sales on the black market
“These figures should act as a wake-up call to the government. Official estimates of the tobacco tax gap lack all credibility. It is clear that the illicit trade in Britain is very large and has grown dramatically since 2021.”