Tobacco smugglers roll their own market

A Belgian town has become the mecca for British bootleggers
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TOBACCO smoking may be on the decline but sales of cigarette papers are booming, according to the makers of the two most popular brands in the UK, Rizla and Swan.

Rizla, owned by Imperial Tobacco, reported a "substantial" rise in sales last year while Swan, owned by Swedish Match, reported a 6 per cent jump in paper booklets sold. Rizla has 80 per cent of the pounds 72m market and Swan has the rest, apart from a few tiny players.

So what, you may ask, is the reason behind the new-found popularity of cigarette papers? According to Rizla, tobacco smugglers are to blame. A staggering 70 per cent of all hand-rolled tobacco bought in this country is smuggled in from Belgium where, because of low duties, a 50-gram bag of tobacco costs just pounds 1.80 compared to pounds 7.73 in this country.

"The market is booming. There has been an enormous increase in tobacco smuggling, and this has led to to a huge increase in cigarette paper sales," said Paul Sadler, spokesman for Imperial Tobacco.

The growing use of cannabis, a soft drug for whose decriminalisation the Independent on Sunday is campaigning, could also be an unquantifiable factor in the rise in cigarette paper sales, although Rizla says rolling joints still constitutes "a very small use of paper".

Imperial Tobacco, which also sells cigarettes, this week wrote to Chancellor Gordon Brown urging him to review tobacco taxation and freeze all taxes pending the outcome of the review. Tobacco taxes in the UK are amongst the highest in the European Union.

The trade in tobacco burgeoned with the completion of the EU's single market in 1993 when import restrictions were eased within the EU. The centre of the trade is a small Belgian town called Adinkerke, where local residents' lives have been made a misery by the hordes of British tobacco smugglers who cross the channel to Belgium to make a quick buck. It is estimated that smuggled tobacco from Belgium costs the Exchequer around pounds 400m a year in lost revenue.

The problem at the moment is that the practice can only be tackled if all 15 EU member states agree to harmonise their tax rates.

According to the tobacco industry, the smuggling makes it harder to control cigarette sales to children, and cheaper street prices mean more smokers.