British American Tobacco whacked with £650,000 fine by HMRC for “oversupplying” Belgium cigarette market
(City A.M., November 13, 2014)
British American Tobacco (BAT) has been hit with a fine of £650,000 by HM Revenue & Customs for oversupplying cigarettes to Belgium, which has substantially lower tobacco taxes than Britain.
Apparently, that causes more low-cost cigarettes to be smuggled into the UK.
According to papers seen by the Wall Street Journal, it is the first time a big tobacco company has been fined for “oversupply of products to high-risk overseas markets”, high-risk markets being classified as those that sell cigarettes much cheaper than in the UK.
The penalty for such practises can be up to £5m. But BAT has rejected the charge of oversupplying Belgium and intends to challenge the fine in court. A pack of cigarettes in Britain will set you back £8.47, whereas in Belgium it costs £4.75, according to the Tobacco Manufacturers’ Association.
The Exchequer estimates one in 10 cigarettes sold in the UK is counterfeited, and the government loses as much as £2.5bn each year to the black market. Cigarettes and their producers are seen as an easy target for chancellors seeking to raise money. It has become par for the course in Britain to expect almost every budget to include a rise in tobacco duty.
However, the high price of cigarettes in Britain combined with strong demand has proved an enticing prospect for smugglers. Many cigarette manufacturers fear the scope for black market activity may increase further as a result of the EU tobacco products directive, which will be implemented into national law by mid-2016.
The measures ban flavoured cigarettes, such as menthols, as well as certain pack types like those which contain only 10 cigarettes. In total 45 per cent of the market is set to be impacted by the tobacco products directive.
ASH Ireland welcomes a commitment by Minister James Reilly earlier today that he would bring proposals to the Government to introduce the plain packaging of cigarettes on sale in Ireland. The Minister made this commitment at the launch of “Healthy Ireland” in the Mansion House.
ASH Ireland is disappointed that the introduction of plain packaging was not included in the Tobacco Products Directive, shortly to be approved within the EU. However we were always aware that individual countries could proceed and introduce plain packaging of tobacco on an independent basis. We very much welcome Minister Reilly’s decision to take this independent path as confirmed today. Minister Reilly will have the full support of ASH Ireland and the entire health sector with his plans to introduce plain packaging. This will constitute a hugely important health initiative, which will again contribute to the denormalisation of smoking and hopefully contribute to reducing smoking prevalence.
As experienced by the Australian government; the Tobacco Industry will fight Minister Reilly’s health initiative vigorously, however he now has the knowledge that the Australian government fought back and proceeded with this health initiative despite the efforts of the profit driven vested interests.
The bottom line for all of us in Ireland is that 5,200 of our citizens die every year because they smoke – and every effort must be made to reduce this dreadful statistic. The introduction of plain packaging will certainly be another positive step in the right direction.
For contact: ASH Ireland: 0818-305055
Wally Young, Young Communications: 087-2471520
With effect from Friday next 1st February, the process of implementing the regulations to ensure that graphic warnings will appear on all cigarette packs on sale in Ireland will commence – a most welcome and necessary development. From Friday all products placed on the market must comply with the legislation and all products on sale in retail outlets must be fully compliant by 1st February 2014.
This is ample evidence to show that health warnings, as we have on tobacco products at present, combined with coloured graphic images, can be effective at discouraging smoking and advising the consumer of the health risks associated with smoking. The Tobacco Industry must now comply with the regulations signed into law by Minister James Reilly on 21st December 2011.
Dr Ross Morgan said today, “we welcome the introduction of these regulations, which will provide all tobacco users with graphic images that will inform them of the realities facing smokers. One in two smokers die as a direct result of their smoking and tragically over 5,200 die in this country each year. The Australian Government recently introduced plain packaging, combined with graphic warnings on all tobacco packs, and we encourage Minister Reilly to follow the Australian example”.
For contact: ASH Ireland, 01-6599451/Wally Young, Young Communications, 087-2471520
Note to Editors:
A copy of the Statutory Instruments which include the images that will be used are available on the Department of Health website, www.doh.ie
Dr Ross Morgan, and Dr Angie Brown made a presentation to the Seanad Public Consultation Committee on 19th June, following on from the Committee’s invitation for submissions on “Changes in lifestyle can prevent approximately one third of cancers. How does Government and Society respond to this challenge?
If you would like to join the 300,000 people currently trying to quit smoking please access the following link:
ASH Ireland today launched a new website, The Tribe,www.thetribe.ie specifically designed to engage with young people on smoking and tobacco related issues. (Launch-12pm Tuesday 22nd May 2012 at 41a Blackberry Lane, Rathmines – the offices of Cawley Nea)
This interactive website, will deal with health, environmental and addiction issues, as well stressing the many other downsides to smoking, such as drying of the skin (wrinkles) loss of hair quality, damage to teeth, loss of fitness and nicotine poisoning of young people who work in the tobacco fields in developing countries.
Dr Angie Brown, of ASH Ireland and Medical Director of the Irish Heart Foundation said today, “We are very aware that young people do not engage effectively with websites, which are designed for adults. The new website, which we had evaluated by young people’s focus groups, is specifically designed to meet the needs of young people. We have provided information, together with a range of videos and pictures, which highlight the many issues and dangers associated with tobacco and smoking. The Tribe idea, is essentially a ‘tribe against big tobacco’ and all this big industry stands for; including massive profit, aggressive marketing of a killer product and a major influencer of governments all around the world”.
At today’s launch transition year students from Drimnagh Castle secondary school, who had reviewed the website presented their assessment on the possible impact of www.thetribe.ie.
Jason Nolan, transition year student at Drimnagh Castle said, “www.thetribe.ie is accessible and very helpful for people of my age group and school goers; as there is a lot of smoking in the vicinity of schools. I was also taken aback with some of the statistics; I learned, for example, that most people who die from lung cancer are smokers”.
Cameron Hazel, another transition year student from Drimnagh Castle said, “I was particularly taken by the information on ‘big tobacco’, the enemy as they are referred to on www.thetribe.ie . I also learned a lot about how ‘big tobacco’ continually try to influence governments, who are health focused and want to change the laws and make smoking less attractive and less normal”.
The website, www.thetribe.ie was designed by Cawley Nea/TWEA, Dublin.