Europe's growing
addiction to cigarette smuggling is burning a £7bn hole in the
pockets of governments in western Europe through lost tax revenues,
and leaving companies including UK-listed British American Tobacco
(BAT) and Imperial Tobacco nursing some £600m in lost sales each
year.
Criminal gangs are
using increasingly creative means to flood Britain with smuggled
packs of Marlboro, Superkings or Lambert & Butler, or eastern
European brands such as Classics or Jin Ling.
This month it emerged that children in the north east of England are being recruited to act as mules on smuggling missions. Seduced by the offer of cut-price air tickets and spending money, teenagers are flying to low-duty countries to fill their suitcases with cigarettes, returning to Britain to pass them on to criminal gangs.
This month it emerged that children in the north east of England are being recruited to act as mules on smuggling missions. Seduced by the offer of cut-price air tickets and spending money, teenagers are flying to low-duty countries to fill their suitcases with cigarettes, returning to Britain to pass them on to criminal gangs.
Meanwhile, in April,
HMRC investigators discovered £70m-worth of cigarettes in south
London smuggled into the country in empty computer towers and air
conditioning units.
In the UK, the cost
of tobacco smuggling to the exchequer was estimated by HMRC to run to
£2.6bn in the 2006/7 financial year, while losses for retailers,
wholesalers and distributors are thought to run to £230m annually
and £191m for the manufacturers.
As the recession
rocks the UK, demand for low-cost cigarettes is growing, driven by
the dominant view that this is a victimless crime. However, tobacco
industry insiders and customs officials suggest it is anything but.
The attraction for
criminal gangs is that the profits on offer are similar to those made
by trafficking drugs, but the penalties are significantly less
punitive.
Experts claim a
container of 450,000 premium packets of cigarettes transported from
Ukraine and sold on the streets of Britain will turn a £1m profit.
Similarly, a typical white van filled with smuggled cigarettes will
turn a £60,000 profit, while a car load gives £6,000.
"In most cases, if caught, smugglers will often only have their vehicles seized, so it is pretty low risk," says the anti-smuggling head.
"In most cases, if caught, smugglers will often only have their vehicles seized, so it is pretty low risk," says the anti-smuggling head.
"Poland is the
turnstile of Europe when it comes to cigarette smuggling," says
one senior investigator at a tobacco company. "It is the transit
country between East and West."
Counterfeit cigarette production is also growing. Polish authorities have raided five illegal factories so far this year, each producing as many as 500m cigarettes a year.
The problem is
especially concerning because of the low quality of many of the
products. Seized cigarettes have been found to contain worms, arsenic
or rat poison. Outside one factory, officials found large piles of
cow dung which was being used to fill out the cigarettes.
