Artillery Row

Leave those cigs along

A new tax on rolling tobacco will backfire

I was in Istanbul airport last month and decided to buy some rolling tobacco for a friend. As far as I know this is not illegal, but if it is then I was buying it for myself. A box of five large (50g) pouches of Golden Virginia was €42. I haven’t smoked for over a decade so I wasn’t sure if this was a good deal. It didn’t seem a particularly good deal. It works out at about £7 a pouch which seemed quite a lot to me. I looked up the price on the Tesco website to see what the going rate was back home and was staggered to find that they cost £33!

It will soon be significantly more. A little noticed aspect of the Autumn Statement was that the tax on rolling tobacco is going up by 12 per cent plus inflation. That’s a hike of 18.7 per cent on top of last year’s increase which was 6 per cent plus inflation. All told, the tax on Golden Virginia (other brands are available) will have risen by nearly 40 per cent in just over a year. 

It’s as if the government wants the tobacco business to be run by international smuggling cartels. Look at the evidence. First, it greatly restricted how many cigarettes smokers can legally buy abroad by leaving the European Union. Then it hiked up the price of tobacco way above the rate of inflation. Then it announced a crack down on vaping. And now it is going to literally introduce the prohibition of tobacco, albeit gradually. What’s going on? Did Jeremy Hunt misunderstand the Red Wall MPs when they told him that he needs to do something for white van man?

Smokers react to price rises in the following predictable ways

Smokers react to price rises in the following predictable ways. To start with, they give up their favourite brand of cigarettes and downgrade to a cheaper brand. When the cheapest brands get too expensive, they switch to rolling tobacco. When that gets too expensive they buy tobacco from a man in the pub. Sure, a few of them quit but most carry on smoking. Tobacco is quite moreish and anyone who is still puffing away after everything that’s been thrown at smokers in the last 20 years is probably not itching to quit.

As I mentioned in a recent article, 35 per cent of the rolling tobacco smoked in the UK is smuggled in. Not brought back from holidays, but 100 per cent black market. And that’s according to figures from HMRC which are very likely underestimates. Quite a lot of these fags are produced in state-of-the-art but highly illegal factories like the one busted by the police in Leicestershire a year ago which required nine lorries to take away the machinery and the 8.5 tonnes of tobacco it was processing.

Rolling tobacco must be the single most smuggled legal product in the country and yet the Chancellor has just whacked it with an 18.7 per cent tax hike during a cost of living crisis. What could possibly go wrong?

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