Imperial profits from smuggling – ASH calls for an inquiry

Thursday 02 May 2002

ASH news release:  immediate Thursday 2nd May 2002
To coincide with Imperial Tobacco’s record financial results announced today, ASH has called for a parliamentary inquiry into how the company makes its money.

Simple calculations based on HM Customs figures and Imperial’s market share show that for every 20 cigarettes it sells legally, 7 Imperial Tobacco cigarettes are sold illegally in the UK.   ASH claims that Imperial uses the black market like just another marketing channel – with wholesale suppliers in Central Europe and elsewhere supplying cigarettes to smugglers that illegally re-import them to the UK..

ASH has called on the Public Accounts Committee to question Imperial Tobacco executives about smuggling – in particular to explore the question: Why do British tobacco companies export so many billion cigarettes to countries where there is no serious end-market for them, but the most obvious customers are organised criminals that will re-import them to the UK illegally?

On Monday (29th April) the Committee took oral evidence from the Head of HM Customs and Excise who claimed that Imperial was not co-operating with its efforts to control smuggling. On Aril 24th HM Customs signed an agreement with Gallaher aimed at controlling smuggling, but no offer was made to Imperial on account of the poor relations with Customs.

Clive Bates, Director of ASH said:

“Smuggling is damaging all our efforts to control the terrible toll of disease caused by smoking.  Yet Imperial does very well out of the illegal sales of its own products in Britain.  We just don’t believe that when they ship 1000 container loads of Regal and Superkings into Central Europe, Africa or the Far East they have no idea where they are all going to end up – these are brands are that are really only smoked in Britain”

ASH has written to the Public Accounts Committee [2] with a briefing on Imperial Tobacco’s position in the black market. [3]

Notes and links:

[1] Based on HM Customs seizure data we estimate that about 8.5 billion Imperial cigarettes were smuggled into the UK last year (50% of estimated 17 billion black market), compared with Imperial’s 22 billion cigarettes sold legally (39.7% market share of 56 billion sticks).  A 40 ft container will hold about 8-10 million cigarettes.

[2] Letter to the Public Accounts Committee (pdf)

[3] Evidence: Imperial Tobacco profits from smuggling (pdf)

Contact: Clive Bates 020 7739 5902 (w) 077 6879 1237 (m) ISDN available