Written evidence submitted by Japan Tobacco International (JTI)

Who we are

Japan Tobacco International (JTI) is part of the Japan Tobacco group of companies, a leading international tobacco and vaping company with operations in more than 130 countries.

It is the global owner of both Winston, the number two cigarette brand in the world, and Camel, outside the USA and has the largest share in sales for both brands. Other global brands include Mevius and LD. In the UK, JTI’s brands include Benson & Hedges, Silk Cut, Mayfair, Sovereign and Sterling, as well as a number of other tobacco products including hand-rolling tobacco (Amber Leaf), cigars (Hamlet), pipe tobacco (Condor). JTI is also a major player in the international vaping market with its brand, Logic and tobacco vapor brand, Ploom. Headquartered in Geneva, Switzerland, JTI employs over 44,000 people and in 2020 was certified Global Top Employer for a sixth consecutive year. JTI is a member of the Japan Tobacco Group of Companies. For more information, visit



This response is made in reference to the Committee’s request for information on ‘emerging trends in consumer facing economic crime as a result of the COVID crisis’.

The illicit tobacco market is an economic crime – it deprives the Government of tax revenue and legitimate manufacturers, distributors and wholesalers of revenue and profit. Since the start of the century HM Revenue & Customs estimate that illegal tobacco consumption has resulted in an excise duty and VAT revenue loss of £47.2 billion[1].


Impact of COVID-19

JTI has produced a comprehensive assessment[2] illustrating how the illegal tobacco trade has been operating, across the globe, during the COVID crisis and how, we fear, it is preparing to ‘reap the rewards’ in the economic aftermath that will follow. The UK is not immune.

During the COVID crisis, the impact of border and travel restrictions has had a marked effect on the UK tobacco market. For example, in the second quarter of 2020 legitimate sales of cigarettes and hand-rolling tobacco have increased and this will have had a beneficial effect for legitimate business and the Government’s tobacco duty revenue. We estimate an additional £1 billion in excise receipts this year.

It is important to note that these additional sales do not mean there has been an increase in the number of people smoking, or the amount people are smoking. It reflects a shift in purchasing between the domestic legitimate market, crossborder and duty-free purchases made by travellers.

The reduction in travel (the Office for National Statistics reports a 96% fall in the number of UK residents going abroad in Q2 2020 versus in Q2 2019[3]) will obviously have dramatically reduced crossborder and duty-free purchases.

Whilst the travel restrictions may have limited some small-scale smuggling and temporarily disrupted the distribution networks used by criminals, there is little empirical evidence to suggest that Covid has been directly responsible for any reduction in illicit tobacco smuggling.

Our data suggests that UK consumers were still able to get hold of illegal tobacco during the first lockdown. A survey of 1,500 smokers conducted for JTI by Kantar, found that 30% of respondents had still been able to buy cigarettes or hand-rolling tobacco that were not in the standardised packaging required by UK law.

Test purchasing conducted in Bolton in the summer of 2020 also confirmed that illegal tobacco was still widely available. We found that 19 of the 31 shops (61%) visited sold our operatives illegal tobacco, the same proportion found in 2018 when 23 out of 37 were selling illegal tobacco (62%).

This suggests that whilst this form of economic crime has not been directly impacted by COVID, the longer-term economic conditions that have been created by the pandemic are likely to lead to increased illicit tobacco smuggling. We are now increasingly concerned that organised criminal groups will seek to further exploit public demand for cheap goods and capitalise on dwindling consumer confidence and buying power during the global recession that lies ahead of us. From long experience, we know that any decline in affordability fuels the trade in illicit or counterfeit products, particularly where this runs parallel to tax increases imposed in order to restore public finances.

The current pandemic crisis creates conditions that are to form a ‘perfect storm’ that will find some consumers inadvertently, and others willingly, buying greater amounts of illegal tobacco products, with impacts on criminal activity and the public finances. It is essential that we act to enhance enforcement action or this problem will grow significantly.



It is key that enforcement action is taken against the criminal gangs that import, manufacture, distribute and sell illegal tobacco products across the UK.

JTI believes that Trading Standards, who are at the forefront of enforcement action within the UK, must have adequate resources to tackle the sale of illegal tobacco in stores, which is ingrained in many parts of the country.

It was announced at the March Budget that there would be “increased resources for Trading Standards and HMRC to combat the illicit tobacco trade, including the creation of a UK-wide HMRC intelligence sharing hub”[4] and just this week, HMRC have launched the consultation on sanctions to tackle tobacco duty evasion, which includes consideration to extending trading standards officers enforcement powers.

As part of these welcome developments, there also needs to be a better way to collate, share and act on information about the illegal trade. At the present time, there are any number of places where consumers can report sales of illegal tobacco – the Customs Hotline, Citizens Advice Consumer Advice line, Crimestoppers, as well as local organisations set up and run by tobacco control groups.

The criminals behind the illegal trade do not operate in silos and while enforcement action at local level will be undertaken by local Trading Standards departments, it should be coordinated centrally to ensure that there is complete knowledge of all information available in order to allow the networks of criminal organisations to be more easily identified. Key to this must be one nationally recognised reporting number which feeds directly into the new intelligence sharing hub.

Finally, as well as adequate resources and improved information gathering and sharing, there needs to be a less obstructive, and in some cases less hostile, attitude towards legitimate businesses seeking to assist them. Some Trading Standards departments appear beholden to public health bodies or tobacco control groups whose default position is that the tobacco industry is in some way central to the illegal tobacco trade and must be ignored – this is simply false. The Organised Crime Task Force’s latest report[5] notes that the smuggling of counterfeit cigarettes was “the main threat within tobacco fraud targeting the UK”. More importantly, this attitude prevents law enforcement agencies acting on information that will help them take action against criminals and protect legitimate businesses.


December 2020




[1] Measuring tax gaps 2020 edition - Tax gap estimates for 2018 to 2019. HM Revenue & Customs, July 2020

[2] The Gathering Storm. JTI, September 2020 (

[3] Overseas travel and tourism, provisional: April to June 2020. ONS, 9 November 2020

[4] Budget 2020: Delivering on our promise to the British people. HM Treasury, March 2020

[5] Annual Report & Threat Assessment 2019/20. Organised Crime Task Force, November 2020