Retailers in Sheffield are losing out to organised criminal gangs peddling tobacco on which taxes have not been paid.
Every year, illegal tobacco products which have been smuggled into the country are costing the UK economy billions of pounds in unpaid tax.
Her Majesty’s Revenue and Customs estimates that, in 2013-14, £2.6 billion in tax revenue was lost because of non UK duty-paid tobacco products.
The products include counterfeit, ‘illicit white’ or duty-free products. Illicit white products are made specifically for smuggling.
In Sheffield, retailers say their trade has been affected by criminals openly selling such cigarettes and tobacco on the black market – including to children under 16.
Bob Shillito, who has run R&A Shillito’s newsagents on Hartley Brook Road, Shiregreen, for 42 years, said: “It’s not as bad as it used to be, but we do have a problems in this area with smuggling.
“There used to be houses on Parson Cross where people could go to buy illegal cigarettes, but I don’t think they are there any more.
“A lot of people up here don’t have a lot of money but they do have an addiction.
“If an alternative is put in front of them they are going to take it.
“It certainly affects my business.”
The main cause of smuggling is said to be the high level of duty – taxes on UK tobacco are among the highest in the world.
Test purchasing operations carried out on behalf of legitimate tobacco firm JTI has shown illegal cigarettes are on sale in Sheffield for as little as £3 per packet of 20 – compared with a retail price of nearer £10.
Mark Yexley from JTI said: “Illegal tobacco products ‘peddled’ within communities pose a risk to the future existence of the hard-working convenience store owner.
“Anyone who buys counterfeit cigarettes may be contributing to the decline of the high street.”