Tobacco firms face smuggling report

Tobacco seizures have increased

A Commons report into the tobacco industry could link some firms to large-scale smuggling.

The report of the Health Select Committee, due for release on Wednesday morning, may urge the Department of Trade and Industry to launch an investigation into the firms.

It is alleged that some were "complicit" in organised tobacco smuggling by being prepared to supply large quantities of cigarettes to sources in continental Europe used by organised bootlegging operations.

The anti-smoking group Action on Smoking and Health (Ash) presented evidence from company memos which it says supports its claim.

In addition, it has presented what it says is evidence of tobacco firms benefiting from the activities of smugglers in a variety of other countries worldwide.

Claims denied

The tobacco industry, and in particular British American Tobacco, has strenuously denied the allegations in evidence to the committee.

Clive Bates: pressing for an investigation

BAT's deputy chairman, former Conservative Chancellor of the Exchequer Kenneth Clarke, described them as "far-fetched", insisting that the company only sold to legitimate outlets, and paid all excise duties.

And a senior BAT executive described the Commons Committee as a "kangaroo court".

The main work of the committee was to examine the conduct of the tobacco industry in general.

Its report could also call for tighter regulation of many other aspects of the tobacco industry in the UK, from labelling to the use of additives.

Clive Bates, from Ash, said that while this was "solid" work, its priority was an investigation into the smuggling claims.

He said: "What we need now is a complete rethink and overhaul of the regulatory framework and a serious investigation into the rogue business practices related to smuggling."

It is estimated that up to £2.5bn in duty is lost to the government every year because of the activities of bootleggers.

As many as one in five cigarettes smoked in Britain may have been smuggled in.