2.1 billion cigarettes were seized in the nine months since April 2000 - 1.4 billion in the UK and 700 million abroad. A sizeable proportion of these were destined for Scotland, in addition to the 25 million cigarettes seized within Scotland itself in the same period.26
The bulk of smuggled tobacco enters Scotland via road from UK southern ports. Via air, the main source of smuggled cigarettes is the Canary Islands with Glasgow Airport the main destination. Figures released in September 2000 show that in one week, officers across Scotland seized in excess of one million cigarettes from both Edinburgh and Glasgow airports. The largest single seizure was 72,000 cigarettes being brought into the country by a man returning from the Canary Islands.27
As elsewhere in the UK, the largest problem is large-scale organised smuggling, with tobacco entering the country in large containers. Of the 25 million cigarettes seized, around 15 million entered Scotland in containers.
Customs confirm that the main outlets for smuggled tobacco in Scotland are increasingly markets, car boot sales and housing estates. Outdoor markets held in Bathgate and the Barras in Glasgow are becoming notorious for the sale of cheap smuggled tobacco. Recent activity by Customs disruption teams and specialist strike forces have been very successful at disrupting activity at markets across Scotland. During one weekend's operations in March 2001, 80,600 cigarettes, 28.35 kg of tobacco and 3 vehicles were seized at the Barras, while at Ingliston market, Edinburgh, 17,420 cigarettes, 14.50 kg tobacco and 3 vehicles were seized.28
Market-holders and those that are involved in car boot sales, as well as local shops, do not have to apply for a licence to sell tobacco so there is no disincentive to sell on smuggled tobacco.
However, Customs & Excise officers are now beginning to work in conjunction with local trading standards officers and the police to ensure that those market operators who allow illegal activity to take place within their markets, do not have their licences renewed [see South Ayrshire above].
For the purposes of the Expert Working Group, the West Lothian Drug and Alcohol Service, which provides stop smoking support for local communities, carried out a survey of client users. The survey found that out of fifteen clients, 9 bought tobacco products from a 'black-market' source as first choice with a further 2 occasionally buying from a 'black-market' source. Of these, 8 smoked cigarettes and 3 hand rolling tobacco. The source of 'black-market' tobacco products was either a friend or Bathgate Market.
In the north-east, Grampian Health Promotions have found that a number of smokers have access to cheap or duty free cigarettes through working offshore, fishing and from smuggled tobacco making its way up from other parts of the UK. This access to cheap cigarettes and tobacco makes it very difficult for smokers to make the decision to stop smoking. Grampian Heart Campaign has found that reduced price tobacco not only keeps wavering smokers from stopping, it also acts as a major disincentive to the use of Nicotine Replacement Therapy [NRT] with NRT having cost twice as much as smuggled tobacco.29
Similarly, in the Western Isles, there is anecdotal evidence of widespread use of illegal tobacco with public acceptability about the use of reduced price tobacco spreading across all socio-economic groups. The main source of cheap tobacco appears to be from the off-shore oil rigs and crews on fishing boats.
The availability of cheap smuggled tobacco is undermining public health policy and smoking cessation services in deprived communities in Scotland
Anecdotal evidence suggests that, in many deprived communities in Scotland, the resident drug dealer has become the resident tobacco smuggler. Indeed, amongst the previous convictions of those detected by Customs involved in tobacco smuggling are heroin and cocaine trafficking, manslaughter, arson, GBH and a variety of other violent crimes.30
At the launch of Government's anti-smuggling strategy in March 2000, the Paymaster General acknowledged that tobacco smuggling has "disturbing links to other serious criminal activity."31 The National Criminal Intelligence Service "UK Threat Assessment" published in May 2000 estimated that 19% of all identified organised crime groups are engaged in excise fraud. It further estimated that 21% of drug trafficking gangs also engage in excise smuggling.
Customs & Excise representatives at the Expert Working Group confirmed strong links and associations between tobacco smugglers and drug dealers/organised crime. Tobacco smuggling has become increasingly attractive to the criminal fraternity, including the Italian Mafia, because it is highly profitable and involves lighter penalties than smuggling heroin or cocaine.32 Some organised crime groups use tobacco smuggling to fund drugs smuggling activity.
Organised criminals and drug dealers dominate the tobacco smuggling trade
There is little public awareness about the links between tobacco smuggling and drug dealers/organised crime. Consumers are attracted by cheap tobacco and see smugglers as providing a service to local community.33 Tobacco smuggling is perceived as a 'victimless' crime, if it is seen as a crime at all.
In September 2000, the Government launched a new advertising campaign to help stamp out tobacco smuggling, 'Don't Be Blind To The Crime.' The £3m advertising campaign aims primarily to make the public aware that tobacco smuggling is a large scale criminal activity undertaken by serious and violent organised criminals and to encourage the public to help Customs tackle tobacco smuggling by calling the confidential hotline 0800 59 5000.
Customs & Excise has also launched a new leaflet campaign centering on undercover work in Scottish markets. On identifying customers who have purchased illegal goods, Customs will seize the goods. Customs will also hand out a leaflet warning that the customer is caught again it will be treated as an offence. Those found with smuggled tobacco in their vehicles can also have their car seized.
Many smokers on low income are attracted by cheap tobacco and see tobacco smugglers as providing a service to their local community
Following the launch of the Government's policy, Tackling Tobacco Smuggling, Customs staff numbers have been strengthened in Scotland. Since April 2001, a mobile force of 100 officers can be deployed inland or at the frontier, on top of permanent, rostered airport staff and supported by specialist investigation and intelligence teams. . This is in addition to specialist officers from UK-wide strike forces, who support activity in targeted Scottish risk areas. The major focus of the Customs & Excise operation in Scotland is tobacco disruption rather than gaining prosecutions. This involves seizing smuggled tobacco, moving on, seizing another supply etc, while continuing to prosecute the major criminals.
There has been a huge shift in Custom & Excise activity over the last 18 months from the sale of smuggled alcohol in legitimate retail outlets to the sale of smuggled tobacco in various outlets. After a Customs clampdown in Scotland, there are now fewer seizures from shops and an increasing number from markets and domestic addresses. This trend is reinforced by the fact that Camelot lottery terminals and liquor licences are withdrawn from those shops convicted of selling smuggled alcohol or tobacco.
This shift in activity is reflected in the recent operation by Customs in Dumfries. In February 2001, a total of 93 premises were searched in the Dumfries and Galloway area with homes, lock-ups, farms, shops and garages targeted. In one house alone, Customs netted 133,000 cigarettes and 21 kilos of tobacco worth £30,000. A Frontera four-wheel drive vehicle believed to have been used to smuggle the goods was seized during the raids.34
The tobacco industry opposes tobacco tax increases and argues that higher taxes and price differentials between neighbouring countries are an incentive for smuggling. Some national governments have been convinced by this argument and reduced taxes in the hope of reducing the incentives to smugglers.
Following pressure from the tobacco companies in the 1990s, Canada reversed its policy and reduced tobacco taxes as a way to end smuggling. The outcome was that tobacco consumption rose whilst tobacco tax revenue fell. There is now evidence that RJ Reynolds tobacco company had agreed a strategy to flood Canada with black market cigarettes in order to support their political objectives and the Canadian government has filed a RICO (Racketeer Influenced Corrupt Organisations) lawsuit accusing the tobacco industry of playing a key role in orchestrating the smuggling 'crisis'.35
Canada is now reviewing its position and provincial governments are being urged by the Canadian Finance Minister to impose "aggressive tax increases" to bring tobacco tax levels back to pre-1994 levels.
Experts Joossens & Raw have systematically shown that the claimed correlation between high prices and high levels of smuggling does not actually exist in western Europe.36 Cutting tobacco taxes does not work as countries with low tobacco taxes also have the problem of tobacco smuggling.37 As we have seen above [p.3], Spain successfully tackled its smuggling problem, not by cutting tobacco taxes, but by targeting organised smuggling at 'container level'.
There is also a very strong public health argument in favour of increasing tobacco taxes. Studies show that a 1% rise in relative cigarette price results in about 0.55% fall in the amount smoked ('price elasticity'). The World Bank has calculated that a 10% increase in the price of cigarettes on average reduces demand by 4% in high-income countries and by as much as 8% in middle or low-income countries. The effect of a 10% price increase on the 77 billion cigarettes sold in the UK would be to reduce consumption by about 3 billion cigarettes per year - an eventual reduction in tobacco-related premature mortality of around 3,000 lives per year.38
At a seminar on smuggling held by the Health Education Authority in 1999, health economist Christine Godfrey said that there was no evidence that the 'price effect' on consumption had been exhausted. Although there are few UK based studies on the links between price and consumption, Godfrey maintained that the international evidence is very strong.39
Health Economist Joy Townsend argues that price elasticity is particularly high among people in disadvantaged circumstances and teenagers. Evidence suggests that, on average, people with poor socio-economic circumstances, and possibly teenagers, not only reduce levels of tobacco consumption but also total expenditure on cigarettes when there is a price rise. Essentially, price mostly affects smoking by lower income groups, and has most impact where health education has least.40 Raising relative prices could be expected to narrow the differentials in tobacco use between social and economic groups. Unfortunately, a direct consequence of such policies appears to be to further reduce the real incomes of people in poverty who continue to smoke. Whilst tobacco use has halved among better off families in Britain those living on low income have continued to smoke at the same high rates as in the 1970s. An increase in income inequalities, particularly among families, combined with a rapid growth in lone parenthood, has created a closer and closer association between tobacco use and poverty. The disadvantage, inequality and hardship experienced by low-income parents causes them to be much more likely to smoke compared with other, better-off, families. The 1995 Scottish Health Survey showed that those in the less well-off classes are more likely both to smoke cigarettes and to smoke more cigarettes per day. 55% of men and women in social class V (unskilled manual) smoke compared with 15% in social class I (professional). The 1998 Scottish Health Survey, published in December 2000, stated that there was no narrowing nor widening of the social class inequalities in cigarette smoking between 1995 and 1998. Over 70% of two-parent households on Income Support buy cigarettes, spending about 15% of their disposable income on tobacco.41
The solution to combating smuggling is not to decrease taxes as this will increase tobacco consumption and decrease revenue
Whilst price increases has an important role to play in discouraging tobacco consumption, the poorest groups of persistent smokers need considerable additional assistance to help them stop. As ASH Scotland's Women, Low Income and Smoking project has shown, effective tobacco control strategies in poorer communities can only succeed if there is an improvement in the overall socio-economic circumstances of those who are most disadvantaged and if low income smokers have access to free, local support services.42
There is increasing anecdotal evidence that the availability of cheap smuggled tobacco, in particular in deprived communities, is undermining the Government's public health policy of increasing tobacco prices and providing local stop smoking services.
The recent report by the Royal College of Physicians, Nicotine Addiction pointed out that most smokers do not smoke out of choice, but because they are addicted to nicotine. Historically, addiction to nicotine has not been recognised as a medical or social problem in Britain and because of this, there has been a marked absence of provision of specialist smoking cessation services to meet the needs of people who want to quit smoking.43 The House of Commons Health Select Committee recently endorsed the Government's strategy in using price as a weapon of tobacco control but stated that a number of factors need to be taken into account in pursuing this strategy. The Committee pointed out that 'the addictive nature of nicotine means that this product is not one that the poorest smokers can easily sacrifice' and recommended that priority should be given to smoking cessation services targeted at these individuals.44
As part of the 1998 White Paper, Smoking Kills, the Scottish Executive announced an investment of £3 million to build NHS services to help smokers in Scotland who want to give up. As part of the strategy, GPs and others will be able to refer smokers who really want to give up for a course of specialist counselling, advice and support. Smokers motivated to give up are able to enrol for courses where available without being referred. Less well-off smokers who were prepared to receive specialist advice and support would also receive one week's supply of nicotine replacement therapy (NRT) free of charge. 45 In August 2000 the Health Minister announced a doubling of investment in smoking cessation services for those on low income to £2 million, taken from the £26 million tobacco taxation fund. In June 2000, the smoking cessation drug Zyban (bupropion) was also licensed by the Medicines Control Agency for use in the United Kingdom to help patients stop smoking. Most recently, the Scottish Executive announced that nicotine replacement therapy will be available on NHS prescription from April 2001. This is a positive public health measure which should improve the effectiveness of Scotland's smoking cessation services in local communities.
The House of Commons Health Select Committee recommended that the Government should earmark some of the increased tobacco revenues directly for smoking cessation strategies.46
Smoking cessation should be recognised as a core activity of the NHS in Scotland and should receive sustained long-term funding
There is anecdotal evidence that young people in Scotland are purchasing smuggled tobacco in markets and from ice-cream vans. One of the four ice cream vans seized by Customs at the start of May 2001 had 1,308 cigarettes on board, the odd number rather than full packets indicating that individual cigarettes may have been sold to children.47 The brands most often found on the illegal market are the premium domestic brands which traditionally appeal most to young smokers. However, in relation to underage access to tobacco, shops remain the main problem. 83% of underage smokers in Scotland say they purchase their tobacco from shops.48
More research is needed to identify the access and availability of cheaper smuggled tobacco amongst underage smokers.