They are exported go into the grey market and then find their way back

They are exported, go into the grey market and then find their way back.”Last month Bristol-based Imperial Tobacco reported “excellent” financial results, with booming international sales. However, millions of Imperial’s cigarettes exported from the UK are being seized by Customs organisations. The WCO report confirms that together two brands made by Imperial, Regals and Superkings, accounted for more seizures than any other brands across the whole of Europe.Also in November, UK Customs announced the results of their strategy to cut smuggling, smashing 43 major organised crime gangs. While Customs cut cross-Channel smuggling by 76 per cent, the leaked WCO report highlights how the majority of smuggling is now done on large containers.

“The most common methods of transportation are lorries and containers, hidden among other legitimate loads,” it says. The report says that three of the top four European ports for cigarette seizures were in the UK: Dover, Southampton and Felixstowe. It also identifies the routes used by the smugglers, including regions such as the Baltics, Balkans, Central Europe and Russia.Some industry critics and campaigners claim that the tobacco manufacturers are facilitating the flourishing illegal trade. Ash, the anti-smoking campaign group, has alleged that the manufacturers “may be aiding and abetting smuggling to ensure they retain a share of the lucrative market by not stopping exports that reach smugglers”.Clive Bates, director of Ash, asks: “Why do the UK tobacco companies ship so many billion cigarettes to regions such as eastern Europe and the Baltic states where they are hardly smoked, and where the most obvious customers are Mafia who will bring them back to the UK illegally?”The benefits to the companies are obvious, critics say.

Whether the cigarettes are sold legally or illegally, the company still gets paid. If the cigarettes are seized, they are destroyed by Customs at a cost to the taxpayer. If this happens, the smugglers are likely to order replacements and so the company will get another sale.Tobacco analysts also argue that the more smuggling that goes on, the greater the pressure on the government to hold or reduce domestic taxes. Tax is the main weapon to stop people smoking, so if taxes are reduced this means that more people will continue to smoke. Illegal tobacco is, of course, cheaper than legal tobacco, which means that there is less incentive to quit. Illegal tobacco is also more likely to be sold to youngsters.Moreover, faced with a static UK market, international expansion is proving good business. Nearly half Imperial’s profits come from international operations, up from just 20 per cent four years ago.Last month international initiatives to stop smuggling formed part of the negotiations at the World Health Organisation’s convention on tobacco control in Geneva.