Fining manufacturers not way to tackle illegal trade

The UK’s Revenue & Customs department has privately told British American Tobacco that fining tobacco companies for breaching anti-smuggling legislation might be less than helpful in the fight against the black market in tobacco products, according to a story in The Times citing the leaked minutes of a meeting.

BAT was penalised last month for oversupplying tobacco products to Belgium amid concerns that licit tobacco sold in lower-priced markets was being brought into the high-tax UK illegally.

BAT, which was the first company to be penalized under the legislation, was fined £650,000; and it could have its executives called before MPs on the Commons Public Accounts Committee.

HMRC said last month that it was keeping rival tobacco companies ‘under review to ensure they comply with the rules’.

However, in draft minutes of a meeting between BAT and HMRC in London in March, which have been passed to The Times, the tax agency said that fining tobacco companies could reveal the shortcomings of the legislation.