Convenience retailers could lose up to 30% of incidental sales if restrictions on the tobacco category proposed by the EU go ahead. The Tobacco Products Directive proposes a number of EU-wide restrictions that include a ban on packs of cigarettes with less than 20 sticks, and rolling tobacco in packets smaller than 20g.
A report published by Oxford Economics predicts that convenience stores would lose between 10-30% of incidental sales, while supermarkets would lose 2-10% of incidental sales.
The report says: “Small shops which typically generate 20% of their turnover from tobacco, would suffer disproportionately from the removal of smaller, lower cost packs of cigarettes and hand-rolled tobacco, with marginal businesses threatened by the loss of turnover and cash flow.”
Speaking earlier to SLR about the TPD, JTI’s Head of Communications, Jeremy Blackburn, said: “The Directive is very much focussed on being EU-wide and [given the state of different markets] that means a disproportionate focus on theUK. Our view is that if you take the lowest street price for illicit tobacco products and compare it with the price of a 20 pack, someone who buys 10s to limit their spend or their consumption will see that they can buy illegally for much less.”
Imperial Tobacco’s UK Communications Manager, Gayatri Barua-Howe commented: “Currently, one in six corner shops in theUKis at threat of closure due to lost sales from tobacco smuggling and cross border shopping. The EUTPD proposals, if agreed, will act as an open invitation for criminals to peddle more illicit tobacco onUKshores. This will further erode Scottish retailers’ incomes and deprive the Treasury of much needed revenue for public services.”
