There have been few outbreaks in recent years - with the possible exception of the creeping virus that is "Big Brother" - that have caused as much media hoo-hah as the plague of foot-and-mouth disease. But, even as livestock are slaughtered by the landfill-load and farmers fear for their very existence, the subject of bootleg 'baccy has again been front-page news, proving once and for all that tobacco smuggling has reached epidemic proportions in the UK.

A report on the black market in tobacco products published in May 2000 by consultants DTZ Pieda revealed that, with estimated sales of £2.5 billion a year, tobacco smuggling is now second only to drugs in terms of consumer spending on illegal activities.

The study reports that 16.6 billion cigarettes and £430 million-worth of handrolling tobacco were sold illegally each year in the UK, providing the bootleggers with an estimated net untaxed profit in excess of an appalling £550 million.

According to official estimates from HM Customs and Excise, the Treasury lost a massive £3.8 billion in tax revenue in 2000 from these criminal activities, over five times greater than the value of benefit fraud. At best, Customs only seize around 10% of cigarettes entering the country illegally and this lucrative trade is crippling tobacconists and corner-shops and seriously impacting on revenue in many clubs and other licensed premises.

"Our income from cigarettes has dropped by around 70% over the last couple of years" says John Pyatt of Adderley Green Working Mens Club in Stoke-on-Trent. "The majority of members who used to smoke packet cigarettes now use rolling tobacco, which they either bring back legitimately from abroad or buy on the black market."

The tobacco companies and the government estimate that 30% of tobacco products sold in the UK are imported, but just 8% are obtained by legitimate cross-border shopping. With smuggled packs of major brands selling on the street at around £2 less than the official retail price and rolling tobacco on illegal sale even cheaper, smokers are more than prepared to see their morals go up in smoke to save a few quid.

"We deplore cigarette smuggling" says Jeff Jeffery, corporate affairs manager of Gallaher plc, whose brands include Benson and Hedges, Silk Cut, Mayfair and Old Holborn, "and we support and applaud the Customs' efforts to police the problem. But without a fundamental review of tobacco taxation policy, we don't believe a full answer can be found."

A pack of B & H sells in UK shops for £4.33, whilst that same 20 costs £1.89 in France, £1.55 in Spain and a mere £1 on Tenerife. "You must realise that, in a depressed area like ours, people will go out of their way to buy cheap tobacco" says John Hyett. And it would appear that dealers are getting ever more brazen in their marketing techniques. Hyett says "There was a classified ad in our local paper recently, under 'For Sale', that said 'Ten packs of rolling tobacco, unwanted gift, bargain at £30'! There was a 'phone number and the ad even said 'Smoking Can Damage Your Health'! I've no idea why Customs don't just crack down on them."

"It's very difficult for Customs" says Gallaher's Jeffery. "When there's a seizure, we assist them with the prosecution, but it's impossible to contain the problem - levels are increasing year on year. There are even places, like London's Holloway Road, where you can see people openly selling smuggled tobacco on the street. The government needs to agree to sit down with the tobacco companies and explore the possibility of a tax reduction. But then, even a £1 a pack reduction would still leave the UK out of line with other countries."

Imperial Tobacco, Gallaher's rival and manufacturers of popular budget brands such as Lambert & Butler, Mayfair and Richmond, feels that there may be a glimmer of light at the end of the channel tunnel. In the company's half-year results, chief executive Gareth Davis suggested that the Government could be winning the war. He said "Increasing the number of customs officers last year, allied to a more modest duty increase, appears to be restricting the penetration of non-UK duty-paid cigarettes." He also called for a more integrated approach to the problem.

The main sources of bootleg tobacco products would appear to be outside of a club's jurisdiction. John Pyatt makes his policy quite clear by prominently displaying a notice to the effect that any member caught selling tobacco in the club will be immediately expelled. "We did have a minor problem with people trying to sell it in one club, but we soon stamped it out" says Peter Evans, who runs three social clubs in south Wales. "But you can't stop them buying it at boot sales or out of the backs of cars."

Pyatt, Evans and Peter Hunt of the Kings Heath Sports and Cricket Club in Birmingham all agree that they now sell tobacco products purely as a service to members rather than any kind of profit centre. "We can't even compete with the legitimate supermarket prices" says Evans "and people have cut down on their smoking anyway, for health as well as cost reasons."

Recently, the media has been riddled with smuggled-cigs horror stories. Children were being sold cigarettes from ice-cream vans outside schools in Scotland, kids as young as 5 are used on cross-channel ferries to bring contraband back in their rucksacks, a 60 year-old York couple were jailed for running a bootleg fag-shop from their council house and the licensee of a club in Greater Manchester was given 6 months in 1999 for running an open-all-hours duty-free shop from his club - now, there's a novel way to attract business!

Media hype aside, it would appear that the ill-effects of tobacco smuggling are more apparent in members' coughs than in clubs' coffers. With cigarette, cigar and tobacco sales a mere add-on rather than a profit stream, clubs can rest somewhat easier than the small tobacconist or corner shop, which rely on volume sales of these low-margin products for a major part of their livelihood.

If a mantra is needed to bring to the attention of smokers the folly of buying illegally, try the words of Customs & Excise's Scottish detection chief, Dave Clark: "Before anyone buys a packet of cigarettes on the black market, they should consider very carefully the consequences of their actions. They are stealing taxpayers money that could be better spent on local services, while lining the pockets of criminals prepared to exploit the most vulnerable members of society."

Tobacco smuggling sidebar - tobacco advertising

The battle over the advertising of cigarettes and other tobacco products continues to rage the length and breadth of Britain and the European Union.

All tobacco advertising has been banned from television since the mid-1960s and a voluntary agreement exists regarding other forms of advertising - posters, press ads and promotions - between the tobacco manufacturers and the government whereby advertising does not make smoking out to be glamorous, to appeal to children, or to link smoking with sporting success or sexual attractiveness.

AN EU directive that would have banned tobacco advertising throughout member nations was overturned by the European Court of Justice in 1998, but the UK government announced that it would introduce its own legislation to implement a ban. All tobacco advertising, promotion and sponsorship would be outlawed, with the exception of trade advertising, along with the distribution of free cigarettes and "brand-stretching" - the branding of other goods, such as clothing, by tobacco producers. As currently drafted, the bill allows tobacco sponsorship to continue up to 1st October 2006.

Latest published data, provided by anti-smoking organisation Action On Smoking and Health, shows that the tobacco industry spends almost £60m each year on advertising and sponsorship. The Department of Health estimates that a ban would reduce tobacco consumption by 2.5%, reducing the number of deaths from smoking by 3,000 a year.

The Tobacco Manufacturers' Association, however, argues that tobacco advertising is aimed merely at building brand loyalty, promoting a switch of brands or launching new brands. Research shows that the predominant influence in taking up smoking is family and friends - a child living in a home where parents smoke is 2½ times more likely to smoke than those living in a smoke-free environment.

Pro-smoking organisation Forest sees advertising as a way of informing the public of the different types of product on the market and as a way of promoting the anti-smoking message - if tobacco advertising is banned, so is the ability to publicise the health warning messages, free of charge.

With the advertising industry fearing mass redundancies, the government wary of revenue losses and tobacco manufacturers failing to understand why they may be prevented from promoting their - perfectly legal - product in a highly competitive marketplace, legislators must consider all possible angles before deciding on a course of action. We can only hope that common-sense will prevail and that such action will permit adult smokers to make their own decisions and grant manufacturers the right to promote their product with responsibility and care.