Tobacco Asia

14 tobaccoasia FRONT PAGE NEWS 卷首新闻 Nearly Half of UK Cigarettes Illicit Almost half of the cigarettes consumed in the UK in 2025 did not generate UK tobacco tax revenue, according to a new KPMG study commissioned by Philip Morris International PMI). The findings point to continued growth in the country's illicit tobacco market and rising concerns over organized crime involvement. The report estimates that 45% of cigarettes consumed in the UK last year were non-duty-paid. Of that total, 13% were legally purchased abroad, while 32.3% consisted of counterfeit or smuggled products. Illicit cigarette consumption increased by 1.5 billion cigarettes compared with 2024, reaching more than 10 billion cigarettes and making the UK the second-larg- est illicit cigarette market in Europe by volume, behind France. KPMG estimated that the illicit trade cost the UK government more than £4.46 billion (US$6 billion) in lost tax revenue during 2025. PMI identified two factors behind the market's growth: an increase in so-called "front shops" selling illegal tobacco and vaping products, and the rise of factories manufacturing illicit cigarettes operating within the UK. The company said criminal groups increasingly use businesses such as vape shops, convenience stores, candy stores, barbershops, and mobile phone retailers to distribute illicit products. According to the report, counterfeit and smuggled cigarettes often originate from countries including Turkey, Poland, and Belarus, as well as free-trade zones in the Middle East. Recent enforcement actions have also uncovered large- scale illegal cigarette manufacturing operations inside the UK. Peter Nixon, managing director of Philip Morris Limited, the UK affiliate of PMI, called for stronger enforcement measures. "This should be a major wake-up call for the govern- ment; poorly resourced enforcement is depriving the UK of almost £4.5 billion a year. The past few years have been a boon time for organized crime gangs who are selling illicit cigarettes and vapes with impunity, ruining our high streets and commu- nities," he said. ITG Acquires Black Buffalo ITG Brands expanded its presence in the US oral nicotine category through the acquisition of Black Buffalo, a Chicago- based company known for its smokeless tobacco alternative products. The transaction carries an initial value of US$150 million, with additional payments tied to performance over the next three years. The deal adds Black Buffalo's product portfolio to ITG Brands' existing oral nicotine business, which includes its Zone nicotine pouch brand. Company executives said the acquisition broadens ITG's reach across different segments of the oral category and strengthens its ability to serve legal-age adult consumers. Founded in 2015, Black Buffalo produces long-cut and pouch products designed for adult consumers who use traditional moist smokeless tobacco. The company manufac- tures its products in North Carolina using US-grown barn- cured leafy greens combined with pharmaceutical-grade nicotine and food-grade flavoring. The products contain no tobacco leaf or stem. As part of the transaction, the Black Buffalo team will join the Imperial Brands team, the parent company of ITG Brands. Imperial Brands c.e.o. Lukas Paravicini described Black Buffalo as "a strong, challenger brand with a highly differentiated proposition" that aligns with the company's broader strategy for next generation products. Flavor Curbs Next for Hong Kong Hong Kong plans to target flavored tobacco products in the next stage of its tobacco-control strategy, health secretary Lo Chung-mau said, as authorities continue expanding restrictions on smoking and nicotine products. Speaking on a radio program, Lo described flavored tobacco as a "poisoned chalice" designed to attract younger consumers. He said manufacturers use additives, including menthol and sweet flavorings, to mask the taste and smell of tobacco, making the products more appealing to first-time users. "About 70% of young people's first puff of nicotine comes from flavored cigarettes, which make them easily addicted to smoking," Lo said. The government has already introduced 10 short-term tobacco-control measures and now plans to focus on regulat- ing flavored tobacco products. Lo did not provide details on the proposed restrictions but said authorities will eventually standardize cigarette packaging, including for flavored prod- ucts. "These flavored cigarettes are presented with colorful packaging like toys to attract youngsters. Their packaging will be standardized," he said. The announcement follows a broader effort to tighten tobacco regulations in Hong Kong. On April 30, authorities expanded the city's ban on alternative smoking products, making it illegal to possess or use vapes and e-cigarettes in public places. Enforcement remains ongoing, with tougher penalties for large-scale possession. Nearly half of all cigarettes consumed in the UK in 2025 were non-duty-paid, with 13% legally purchased abroad and 32.3% attributed to counterfeit or smuggled products. Credit: Ahsanjaya, Pexels.

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