Monday 13 February 2012

Reasons to reduce cigarette duty

From The Daily Mail:

One in seven cigarettes is either smuggled or fake, a study of discarded packets has found.

The black market tobacco, most of which contains far higher levels of chemicals such as lead, arsenic and cadmium (1), is costing the country an estimated £2billion a year in unpaid taxes. (2)

Trading standards officers in Lincolnshire collected more than 1,350 discarded cigarette packets, with only six out of seven of them found to be legal.


1) The article does not make clear why the manufacturers of smuggled cigarettes put extra cadmium and lead in them, those are expensive minerals aren't they? I mean, surely this is not just a baseless horror story to frighten people into smoking duty-paid cigarettes, is it?

2) No it doesn't, it doesn't cost "the country" a penny, does it? One man's cost is another man's saving. It doesn't even cost "the government" £2 billion, they should be thankful for the £12 billion easy money they docollect, not go weeping over the £2 billion they don't. Further, if a sixth of smokers quit smoking overnight, would the government moan that it's cost them £2 billion? Possibly, but if so, that must mean that the three-quarters of adults who don't smoke collectively cost the government about £42 billion in unpaid taxes.

17 comments:

Curmudgeon said...

I'm sure I've seen figures suggesting that the proportion of smuggled/personally imported cigarettes was far higher than one-seventh, more like a quarter to a third. Maybe if they did a survey nearer to the Channel ports, or in an inner-city area, they would get a different result.

Mark Wadsworth said...

PC, yes, that's true, and if they did it in Scotland they'd get a much lower score than in the South East, and so on.

Dick Puddlecote said...

Also, not a great idea to put them in plain packs which are easier to counterfeit. ;)

Woodsy42 said...

Curmugeon, I think they do run a survey at ports of people who self-import. Then HMRC illegally impound the cigs and tobacco (and sometimes the cars).
Notice how they always conflate legal EU imports with counterfeits and illegal smuggling in the figures.

Dinero said...

when statement is constructed as "(X number) "is ether" (insert statistic A) "or" (insert statistic b)" it is a seriouse heads up warning that some obsfucation is about to follow.

Dinero said...

woops I meant to type

"(Xnumber) is either (description A)
or (description B)"

Dinero said...

"One in seven cigarettes is either smuggled or fake"

the condition that no cigarettes were fake would still satisfy that statement

Bayard said...

As W42 points out HTF can the Lincolnhire Trading Standards officers distinguish between cigarettes imported withut paying duty and resold here and cigarettes bought by the smoker abroad or in duty-free and imported legally for their own use. Of course "Trading standards officers in Lincolnshire collected more than 1,350 discarded cigarette packets, with only six out of seven of them found to have paid UK duty, suggesting that some of the remainder may have been imported illegally" doesn't sound quite so good. It's yet another sexed-up "dog bites man" story from the Wail.

"The article does not make clear why the manufacturers of smuggled cigarettes put extra cadmium and lead in them, those are expensive minerals aren't they?"
I think the suggestion is that reputable manufacturers take these things out, but how the bloody hell they would do that is beyond me.

Mark Wadsworth said...

DP, ah yes, but... er. I can't remember the official answer to that.

W42, Din, B, yup. If we're in the EU then we can buy cigarettes there without UK duty and that is the end of the matter. Being in the EU does have one or two good things!

B, go on, can anybody work out how on earth lead, arsenic and cadmium end up in tobacco. It's just dried leaves, why would it end up full of heavy metals?

Steven_L said...

I'm sorry to see my colleagues in North East Lincolnshire quite literally stooping to new lows and picking discarded fag packets up from dirty pavements.

Although I'm sure they are congratulating themselves on a scoop in the Daily Mail.

On point 1 - chemicals, EU regulation of tobacco products has low maximum 'tar' standards by international levels. Hence products not produced to these strict standards usually have higher (naturally occuring) levels of such base elements in them. Tar is just the total residue really.

On your point 2, I suspect HM Treasury know what is going on and try to calculate the optimum level of duty (while lobbying with the WHO for EU-wide duty levels).

You can see a similar thing happening with how manufacturers price premium brands now. Marloboro or B&H Gold are about 30% more than the cheap brands now. This can't just be VAT can it?

(good question to ask a tax accountant / economist methinks)

Anonymous said...

B, go on, can anybody work out how on earth lead, arsenic and cadmium end up in tobacco. It's just dried leaves, why would it end up full of heavy metals?

I don't think anyone could be bothered adding them, except maybe chinese producers, noone knows why they make products intentionally more dangerous.
Tobacco plants has a high uptake of heavy metals, so you have to test all the tobacco, and mix with tobacco with less heavy metals until the values are acceptable. Usually the origin of the plant (soil type) predicts fairly well what the values are.

-Kj

Mark Wadsworth said...

SL, I described the basic rules on how to set the revenue maximising tobacco duty rate here.

As to cheap brands/premium brands, I am amazed that the difference is so big, I have noticed this in the supermarket, but I only buy Old Holborn so don't pay much attention.

Steven_L said...

This explains more about how these sort of tests are done

The DofH used to use a lab down in Surrey from what I remember.

Anonymous said...

For extra heavy metals in cheaply made fake brands versus more expensive name brands, researching the manufacture of cigarettes might lend a clue.

Unsold cigarettes at the retail counters can be sent back to the manufacturer once expired freshness has passed for credit. Once received, manufacturer can grind up the stale-dated cigs, which is called reconstituted tobacco after being run through a chemical soup to bolster back up its flavour, colour, nicotine content, etc.

The reconstituted is blended back in with the fresh tobacco to produce new batches of cigarettes.

If it is a cheaper no-name generic brand, then the reconstituted part is a higher proportion of the mix than in a quality brand which might use little to no reconstituted tobacco.

For black-market cheaply made cigarettes, it may be they are made entirely of reconstituted to keep costs down and nothing fresh, thus a higher metals content from being run through the chemical soup.

That is my guess what might be the difference that could cause it.

To say it the way they do though sounds like scare tactic propaganda as matter of speech to scare people by them pointing out in detail that tobacco is constituted of molecular structures - the same as everything else in the universe is made of molecular structures of some sort or another.

Anonymous said...

This idea of manufacturers using reconstituted tobacco makes me wonder too - if the manufacturing process were simply changed to using only pure tobacco and nothing else, would that not seem to result in a safer more pure product - and why is anti-smoking chasing after smokers and hunting them down for harassment when maybe they could be tweaking the manufacturing process and would result in a better quality, safer and more appealing product, that would thwart the black market and if allowed to be branded, would thwart it even more. The anti-smoking industry is to tobacco and smokers what the Keystone Cops at turn of last century in the cinema were to never catching criminals and being a laughing stock mockery of how ridiculous the establishment was.

Lola said...

My old dad used to wax lyrical about his time in Burma when he was able to watch cheroots being rolled on the dusky slightly moist thighs of beautiful Burmese girls. What effect would that have on the heavy metals content?

(Whenever he smoked one a faraway look would come into his eyes. Do you think Kipling was right? - "A woman is only a woman/but a good cigar is a smoke/..")

James Higham said...

3/4 don't smoke eh?