Britain Tries to Snuff Out Illegal Cigarettes

LONDON —  Londoners tired of the high cost of smoking know just where to go--the black market.

On the bustling, trash-strewn shopping streets of low-income neighborhoods around the city, skittish men whisper “cigarette, cigarette,” while their eyes dart up and down the sidewalk, scanning for police.

They sell a pack of 20 Marlboro Lights for 2.50 pounds, or about $3.75. That’s a big bargain compared with the average store price of $6.33.

The difference: The cheap cigarettes have been smuggled in from low-tax Portugal to Britain, whose tobacco levies are the world’s highest.

The illicit trade now accounts for one of three cigarettes smoked in Britain, the Tobacco Manufacturers’ Assn. said.

The evidence, it said, is in the litter at soccer stadiums. A count at six stadiums found large numbers of wrappers that bore no British tax stamp. Slightly more than 40% at one stadium were smuggled packs.

Big Tobacco, in a glossy brochure distributed to taxpayers, argues that smuggling promotes other crimes, depresses tax revenue and makes cigarettes more easily available to children.

The pamphlet’s suggested solution: take away smugglers’ profit motive by reducing the tax of $5.06 per pack. Just across the channel in France, the tax is $2.42. In Portugal, it’s $1.34.

The Treasury, however, said it would rather pursue smugglers. The government launched a $313.5-million plan last year to beat smuggling by recruiting 1,000 officers and stationing huge X-ray machines at ports to scan incoming cargo for contraband.

The government predicts the measures will lead to the seizure of 10 billion cigarettes and an extra $3.45 billion in revenue over the next three years.

Among several major busts publicized by the government were two in November that grabbed a total of 2.5 million cigarettes. In January, a 14-year-old girl was arrested at Cardiff airport in Wales carrying 10,000 cigarettes from Spain.

Anti-smoking campaigners ridicule the tobacco companies’ public relations campaign and accuse the industry of trying to avoid responsibility in the smuggling problem.

The advocacy group Action on Smoking and Health said several tobacco companies are under investigation for allegedly encouraging or directly participating in smuggling as a way to reduce prices and increase sales.

“Their campaign is not a campaign to end smuggling; it’s a campaign to reduce tobacco taxation,” said Clive Bates, a member of the group. “The government would be naive to take advice from an industry that profits from smuggling and whose main interest is securing lower rates of tobacco duty.”

The tobacco industry said Britons smoke 80 billion cigarettes a year, and customs seizures make only a small dent in the market.

“It’s only by cutting the tax that we can solve the problem,” said John Carlisle, spokesman for the Tobacco Manufacturers’ Assn., a group that includes BAT, Phillip Morris and Rothmans.

The association points to Sweden, which raised its tobacco tax 29% in 1997. Smuggling soared, and the government lowered the duty by 27% in 1998.

Action on Smoking and Health wants the government to shift its policing to the beginning of the smuggling chain--a strategy that it argues will reveal tobacco industry involvement in the black market.

Carlisle called smuggling charges against the industry “pure speculation.”