Cost-of-living crisis could fuel illegal cigarette trade

Rising inflation in the UK could lead people feeling the pinch to turn to illicit tobacco, widening health disparities, according to the Local Government Association (LGA).

The group – which represents 350 councils across England and Wales – has said people struggling with rising bills could be exploited by rogue traders offering cheap counterfeit tobacco.

"This would not only hamper council efforts to reduce smoking but also exacerbate existing health inequalities between low-income groups and the wider population as illicit tobacco is most readily available in poorer communities where smoking rates are disproportionately high," it said.

It also undermines the impact of tobacco tax rises, which have been found to be most effective at encouraging price-sensitive residents to quit.

With the UK’s estimated 5.5m smokers paying an average of around £14 for a packet of 20 cigarettes, the sale of illicit tobacco has resulted in a loss of £2.3bn (around $2.9bn) in taxable income in fiscal 2019/20.

Illicit tobacco tends to be imported illegally without duty being paid, depriving the taxpayer of income which would otherwise fund public services.

Compared with genuine tobacco products, the origins of materials used in counterfeit cigarettes in most cases are unknown, and the manufacturing process lacks regulation and quality control.

Previous studies have shown elevated concentrations of heavy elements including lead and cadmium, which are known to contribute to the harmful effects of tobacco.

Illicit tobacco also plays a significant role in funding organised criminal gangs with strong links to drug dealing, money laundering and people trafficking.

The LGA says more investment is needed in smoking cessation services and local trading standards provision to reduce widening health disparities, organised crime, and lost revenue in public services.

"Local authorities’ public health grant has seen a reduction of £1bn since 2015/16, adversely affecting councils’ ability to invest in services and functions that prevent ill health, reduce health inequalities, and support a sustainable health and social care system, including smoking cessation and tobacco control," it added.

The organisation wants a 'polluter pays' levy on the tobacco industry, estimating that could raise around £700m a year from tobacco manufacturers to pay for initiatives to cut smoking and tackle illicit tobacco "at no cost to the public purse."

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