Skip to main content

United Kingdom Case Study

Facing some of the most significant level of illicit trade in Europe, the UK has managed to reduce illicit trade by adopting moderate increases in fine-cut duties, accepting the affordability constraints of fine-cut tobacco smokers.

The UK currently has imposed some of the highest duties on fine-cut tobacco (FCT) across the European Union. At the same time, the UK has experienced some of the most significant levels of illicit trade in FCT (as high as 62% in 2004-05). Increased enforcement activities and moderate increases of the duties imposed on FCT, have resulted in a reduction in the level of illicit trade to its lowest recorded level of 28% of total FCT consumption in 2016-17. Reflecting the role of FCT as a buffer between FMC and illicit non-duty paid consumption, there has been an improvement in government FCT taxation receipts – by 38% since 2011-12 (equivalent to an additional £338 million since 2011-12).