UK 'is tobacco smuggling hotspot'

Scanning equipment is helping to detect contraband

Customs officers believe Britain has become the biggest market in Europe for tobacco smuggling backed by organised crime rings.

As many as a third of the cigarettes smoked in the country are imported illegally.

Officials believe groups such the Italian Mafia are behind the smuggling rings, which are costing the UK Government about £2.5bn a year in lost revenue.

The government's £209m strategy to put cigarette smuggling into decline within three years is clawing back some of the cash.

High-tech x-ray scanners introduced at ports have already uncovered a haul of six million cigarettes worth about £1m.

Smuggled tobacco sells for up to £2 less than in the shops

But the illegal trade is widespread, and British manufacturers know it is their cigarettes that are falling into the wrong hands.

The cigarettes are exported, so no tax is paid on them, then smuggled back into the country and sold on the black market at up to £2 a packet cheaper than the usual retail price.

Tax difference

Paul Sadler of Imperial Tobacco says cigarettes in the UK are the most expensive in Europe, which is what encourages the illegal trade.

"As a result, criminals target British products and bring them back to the UK to sell on the black market," he told the BBC.

Proceeds from tobacco smuggling have been used to fund criminal activities

Michele Emiliano
Anti-Mafia prosecutor

"It is entirely due to the tax and differential of tax between ourselves and other countries."

It is estimated that around 90 million contraband cigarettes are smoked every day in Britain.

In 1999, campaigners Action on Smoking and Health called for action to crackdown on fraud to help tackle the problem.

They told MPs that "serious gangsters" had moved from smuggling narcotics to tobacco because the risks were lower.

The Italian authorities say they know the Mafia controls the traffic in illegal cigarettes.

Gun running

Anti-Mafia prosecutor Michele Emiliano told the BBC that profits from tobacco smuggling is spent on funding other criminal activities.

"I'm referring to gun running through Italy to other places in Europe," he said.

"I'm also referring to drug smuggling through our ports for distribution across the continent and I'm also referring to illegal immigrants."

The success of the x-ray scanners at Felixstowe earlier this month shows the battle against the smugglers is being stepped up.

Paymaster General Dawn Primarolo said the haul discovered in a container showed what technology is capable of.

"These scanners are a vital weapon in our strategy to tackle smuggling, and will ensure there is no hiding place for contraband," she said.

A full report on the scale of cigarette smuggling into Britain will be shown on the Money Programme on BBC Two at 1930GMT on Wednesday.