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Duty fraudsters cost every retailer £40,000 a year in sales

08 May, 2013

Duty fraud crooks are costing the average convenience store £40,000 a year in lost tobacco sales, according to market survey agency MS Intelligence.

In its latest study it found the the level of consumption of non-duty paid cigarettes in the UK had risen from from 17% in 2011 to 21% in 2012 – representing an additional £10,000 a year in lost sales for the average convenience store.

Peter Nelson, Imperial Tobacco’s anti illicit trade manager, said: “These figures make alarming reading: at a local level convenience stores are now losing over £40,000 each; while at the national level almost £3bn is being lost in tax revenue from tobacco smuggling. This equates to £8m a day being lost to the Treasury. Imagine how far that money would go, if it was available, to improve public services and infrastructure within our UK regions.

“Another consequence is that successful age verification campaigns, such as No iD No Sale and Citizencard, are being undermined as some criminals directly target children when peddling their illicit tobacco.

Their activities are now costing the average convenience store over £40,000 a year in lost sales – equating to over 5,500 lost tobacco purchases a year or over 100 missed sales a week, to say nothing of the lost impulse purchases from other categories generated by tobacco.”

He concluded: “Continual tobacco duty rises in this country are increasing the temptation for smokers to buy illicit tobacco products. The average price of a pack of 20 cigarettes is around £7.75 in UK shops; compared to the street price of illicit cigarettes of between £3 and £4 per pack. More than 1 in 5 cigarettes consumed in this country have had no UK duty paid on them and the situation will only get worse, unless all parties involved work co-operatively to stem this increasing trend in illicit trade.”