Covid-19 has not slowed the illicit tobacco trade, which continues to take money out of the hands of law-abiding retailers. Fighting it requires participation by all, says Ian Howell, fiscal and regulatory affairs manager at JTI.
1. How big is the problem of illicit tobacco trade today?
The illicit tobacco trade remains a serious problem for law-enforcement agencies, wholesalers, suppliers and communities across the UK. HMRC estimate that close to £49 billion in tax revenue has been lost through tobacco smuggling since 2000, including the £2.3 billion lost in 2019/2020.[i]
The illicit trade undermines local businesses, as sales are taken away from law-abiding wholesalers. Kantar research suggests that the problem is particularly apparent in Greater London, where 46% of smokers have purchased illegal tobacco in the past month.[ii] Wales, the West Midlands and the North, at 37%, are also above the average level across the country.[iii]
2. What is JTI doing to help wholesalers combat illicit tobacco?
At JTI, we don’t take this issue lightly, and we’re committed to supporting wholesalers and providing them with the tools they need to become more knowledgeable when communicating the dangers of the illicit tobacco trade to their customers.
Wholesalers play a vital role in combatting the illicit trade and our job at JTI is to ensure that they are knowledgeable and confident in communicating the dangers of the illicit tobacco trade to their customers and steering them away from directly or indirectly supporting organised criminal enterprises.
Our Don’t Be Complicit in Illicit campaign and dedicated microsite (www.jtiadvance.co.uk/DontBeComplicit), which features a host of useful articles and advice, helps wholesalers join the fight against illicit tobacco in their area by providing them with more information on the scale of the issue.
3. What effect has the pandemic had on the illicit tobacco trade?
Since the start of COVID-19 we have seen volumes in the legal UK market increase as smokers haven’t been able to travel overseas and access cheaper products, resulting in a considerable revenue boost for the Treasury – £1.4 billion in 2020/21. However, despite lockdowns and travel restrictions, more than 35% of smokers have been able to purchase tobacco not subject to UK taxes[iv]
4. What can wholesalers do in the fight against illicit tobacco? Law enforcement agencies depend on wholesalers’ support to take action, so the participation of wholesalers is crucial when it comes to tackling the problem head on.
Ultimately, by encouraging more people to report suspicious activity to the relevant authorities, retailers can help protect their local communities. Educating and training staff on illicit tobacco is crucial, as the more staff who are aware of the issue and the warning signs to look out for, the better.
We urge all wholesalers to continue reporting anybody they believe to be selling illicit tobacco. They can contact HM Revenue & Customs’ Fraud Hotline (on 0800 788 887), Trading Standards via the Citizens Advice consumer helpline (on 0808 223 1133) or Crimestoppers (on 0800 555 111). Wholesalers can also visit www.jtiadvance.co.uk/DontBeComplicit and use the Don’t Be Complicit in Illicit microsite’s quick and easy ‘report’ function.
5. What new JTI tobacco products should wholesalers be aware of?
JTI has recently launched Sterling Essential Rolling Tobacco in a new 50g format. Building on the success of the 30g format, it offers the same fantastic RYO quality at a competitive RRP of just £21.20*.
JTI’s decision to release this new, larger format of Sterling Essential Rolling Tobacco reflects the increase in demand for value RYO, with the category growing 14.3% year on year,[v] and generating sales of £3.9 billion a year.[vi] Sterling Rolling is the UK’s fastest growing RYO brand,[vii] showing that the demand or value tobacco continues.”
6. What are the latest trends and developments in the next-gen category?
Convenience is key, so the 100% tobacco-free nicotine pouch category continues to grow and shows no signs of slowing down. Existing adult smokers and vapers today aren’t looking for a ‘one size fits all’ approach. Instead, we know that there is a real demand for convenience and the option to have different products to suit different occasions.
Nordic Spirit nicotine pouches offer an alternative product for customers without producing smoke, vapour or odour, allowing it to be used when smoking or vaping might not be possible.
Customers want choice when purchasing nicotine pouches – including with flavours and strengths. At JTI, we have a selection of Nordic Spirit strengths to suit every preference, including Mint, Bergamot Wildberry and Elderflower in regular and strong options. Recently, to offer even more choice to customers, we also added an extra strong Mint variant to the range.