Illicit tobacco is increasingly prevalent in the UK, driven by successive duty increases that push up tobacco prices.
Last year the illicit sector grew to unprecedented levels – 30% of cigarette and 54% of roll your own tobacco consumption now comes from illegal and other non-duty paid sources (JTI).
These figures underscore the urgent need for a comprehensive strategy to combat the illicit tobacco market.
“Insufficient funding and powers for enforcement agencies, combined with years of escalating tobacco duty has contributed to the rapid growth of this black market. Whilst we welcome the government’s recent funding boost for Trading Standards, we feel it falls far short of addressing the growing threat of illicit tobacco,” comments Ian Howell, Public Affairs Manager, JTI UK.
“Our major concern is that the problem will only get worse if the Government proceeds with the proposed generational smoking ban, taking footfall and profit away from law-abiding stores and giving illegal operators an increased customer base.”
There is no doubt that retailers are deeply concerned about the generational ban as part of the Tobacco and Vapes Bill. A recent survey found that 87% of retailers agree that the proposed generational smoking ban would lead to more illicit tobacco activity in their local area (Acorn Retail Promotions).
“The government needs to acknowledge the scale of the problem, and to crack down on illicit tobacco sales as a priority in 2025. The proposed generational smoking ban will only play into the hands of illegal tobacco operators and will negatively impact on thousands of small convenience businesses across the UK. We urge the government to reconsider its approach and focus on tackling the root causes of the illicit trade rather than implementing a generational smoking ban,” adds Howell.
“We call on retailers to continue reporting any information they have about the sale of illegal tobacco and vapes to Trading Standards through the Citizens Advice consumer helpline on 0808 223 1133.”
Japan Tobacco International (JTI), the number one tobacco manufacturer in the UK (Circana), is increasing the number of rolling papers included within its 50g pouch of Rolling Tobacco (RYO) products from 100 to 120.
This upgrade provides added convenience and cost savings by allowing consumers to be more able to roll an entire 50g pouch without needing to buy extra papers, all while enjoying the same great quality.
With Ultra Value products continuing to lead the way in terms of share growth (Circana), stocking 50g RYO pouches provides another value option for existing adult smokers, with one pouch providing 66% more cigarettes compared to a 30g pouch.
The upgrade will apply to all of JTI’s RYO brands – including Amber Leaf 50g (RRP: £43.35) – the number one rolling tobacco brand in the UK (Circana) – Kensitas Club 50g (RRP: £36.50), Benson & Hedges Blue 50g (RRP: £36.50), Sterling Essential 50g (RRP: £36.50), Sterling 50g (RRP: £38.10), Holborn Yellow 50g (RRP: £38.50), Old Holborn Original 50g (RRP: £45.10).
Andrew Malm, UK Market Manager for Imperial Brands, comments: “Addressing the threat posed by illicit products requires a collaborative approach across the industry. Retailers, distributors, and manufacturers must work together to actively combat the illegal trade by staying vigilant and taking swift action when suspicious activity arises.
“The most important thing is education. Retailers can educate their staff members who will communicate with the customer, helping them avoid confusion or misinformation and make informed choices about their purchases. If your team is aware of the risks of illicit tobacco, then they can talk to customers and help them to steer clear.
“If you know, or even just suspect that illicit products are being offered in your area, you need to report it. Our website Suspect It? Report It! will direct you to your local Trading Standards team, or you can report any suspected illicit activity anonymously via the website. We can then use this to advocate with policymakers.”
In the area of tobacco, Imperial Brands continues to revisit and align its product offering to reflect evolving customer preferences. With more consumers looking for ways to reduce spending amid soaring household costs, there is a shift towards lower-priced propositions in both Roll-Your-Own (RYO) and Factory Made Cigarettes (FMC).
The search for value is a long-term trend, and smokers are shopping around to find a product they enjoy smoking without it hitting them too hard in the pocket. With products in the lowest pricing tiers (economy and value) now worth 72% of all FMC sales in the UK (ITUK), it’s clear that sales in the category are very much driven by demand for value.
With that in mind, last year Imperial Brands introduced Paramount, a new cigarette brand targeting adult smokers who are seeking high quality at exceptional value. Paramount features premium, full-flavour Virginia sun-ripened tobacco, catering to the UK market where the majority of cigarettes feature Virginia blends and full-flavour tobacco (ITUK).
With the value cigarette market growing by 5% in the last year (ITUK) and now accounting for 30% of UK sales (ITUK), Paramount addresses rising demand in this segment. Since its UK launch last year Paramount has become the fastest growing brand in FMC in FY25 (IMB).
“In terms of cigarette papers, value-savvy consumers are increasingly migrating from king size into combi formats due to the added value and convenience they offer,” adds Malm. “Alongside this, we’re also seeing growing demand for unbleached papers as consumers seek out papers with a more natural look. To help retailers tap into this trend, we recently extended our combi range to include a new Classic King Size Combi variant for our iconic Rizla brand.”
Available at an RRP of £1.40, Rizla Classic King Size Combi includes 32 unbleached king size papers and tips to appeal to the rising number of smokers looking for papers with a more natural look and feel with the added benefit of tips in the same pack. This ensures Rizla Classic King Size Combi offers everything smokers will need for the perfect, authentic rolling experience.
“Looking ahead, we anticipate that the move towards value products will continue to intensify as pressures on the cost of living remain for many,” says Malm.
“More generally, there is also continued demand for more intense tobacco blends and greater variety. This is driving sales in smoking accessory products such as flavour cards and menthol filter tips.”
The demand for variety extends into rolling tobacco too. While price can be a factor in a customer’s choice, the unique taste of different tobacco brands and blends is critical as smokers seek different experiences – whether it’s a milder or stronger flavour, or a preference for a sweeter taste.
The Golden Virginia brand comprises a trio of high-quality blends – Original, Yellow, and Amber – each with its own unique characteristics and carefully crafted from premium quality tobacco blends to meet differing taste preferences.
Imperial’s longest-established brand, Golden Virginia Original brings together 24 tobaccos for a rich, full-bodied experience, with a higher moisture content ensuring a consistently satisfying smoke.
The newest addition to the line-up, Golden Virginia Amber is a stronger tasting blend with an intense aroma for a distinctive smoking experience. It is ideal for those looking to explore a different Amber blend without sacrificing quality, all at a competitive price.
Meanwhile, Golden Virginia Yellow has been expertly blended for a smoother, milder taste, with a hint of sweetness ensuring a perfect balance between quality and a lighter smoking experience.
Each blend comes in a range of pouch sizes including 30g, 40g and 50g, catering to different customer needs. All pouches include Zip Click to ensure long-lasting tobacco freshness.
Between them, the Golden Virginia brand meets the needs of a wide range of rolling tobacco smokers across the UK, making them a ‘must stock’ for any retailer.
Imperial Brands products – both combustible and non-combustible – continue to perform strongly on the UK market.
In FMC, its best performers are JPS Players, Richmond, L&B Blue, Lambert & Butler and Embassy, while the best sellers in RYO are Golden Virginia, Gold Leaf JPS, Riverstone and Players (ITUK).
Last year Imperial Brands introduced Paramount, a new cigarette brand targeting adult smokers who are seeking high quality at exceptional value. Paramount features premium, full-flavour Virginia sun-ripened tobacco, catering to the UK market where the majority of cigarettes feature Virginia blends and full-flavour tobacco (ITUK).
With the value cigarette market growing by 5% in the last year (ITUK) and now accounting for 30% of UK sales (ITUK), Paramount addresses rising demand in this segment. Since its UK launch last year Paramount has become the fastest growing brand in FMC in FY25 (IMB).
Imperial Brands continues to offer a mix of both heritage and new brands that consumers trust in terms of quality and value for money.
“We would advise retailers to check up – or refresh their memories – on the ‘No ID No Sale’ Guidelines. In addition, retailers can visit the No ID No Sale website to download free retail packs which contain POS merchandise such as Statutory Tobacco Notices and Age-Related posters along with ‘Scan Me’ and ‘No ID No Sale!’ badges and shelf wobblers,” suggests Malm.
“Alongside this, we’d always advise retailers to check their supply sources rigorously and to continue to be wary of potential suppliers offering products which may be illicit.”
To help retailers increase their product knowledge and stay on top of the key issues influencing the tobacco and vaping categories, Imperial’s Ignite app is the gateway to a range of helpful tools and advice.
Easily accessible through a handy mobile app, Ignite provides retailers with up-to-date category, legislation and product news with ‘1 minute’ reads. There are opportunities to test your knowledge with fun games and quizzes where you can win cash prizes, and even holidays. Retailers can also ensure their staff stay informed with pointers to help with staff training opportunities, and access exclusive offers or take part in incentives to drive sales.
Downloadable POS and marketing support are also available through the app to help retailers boost sales and maximise profits in store.
“Effective merchandising plays a crucial role in shaping a positive customer experience. One key area to focus on is the counter, as it’s often the first touchpoint for customers. Keeping this space clean, organised, and visually appealing creates a great impression. Meanwhile, a good stock of popular items keeps customers coming back and fresh inventory creates opportunities for impulse buys,” advises Malm.
While tobacco products cannot be displayed in-store, ensuring that the shelving in the closed cabinets where tobacco products are stored is well organised is an easy-win for retailers. Customers can then see easily the products they are looking for. It also helps to place complementary products such as cigarette papers and lighters close to each other for ease of selection.
“As always, it’s very important for retailers to ‘follow the money’. Sales of value products continue to burgeon so there is a clear need to focus efforts there. However, it is worth remembering that premium products can carry higher margin than economy and value products and will always retain a loyal group of smokers, so we would advise against removing these products from any store completely,” continues Malm.
“Meanwhile, we are seeing that more and more retailers are now engaging proactively with customers to understand what they are looking to purchase – this intelligence then drives decisions around how ranges are tailored on a store-by-store basis.”
Smart retailers are also being more proactive when it comes to checking stock levels to ensure the most popular products are always available. This will help keep customers happy and ensure they have no need to go elsewhere – with the risk they might stay away for good.
Across the UK, the 25-34-year-old age group currently has the highest proportion of smokers at 14% (ONS) so any decisions around ranging need to ensure products are available that meet the needs of this group. When it comes to rolling tobacco, data shows that 30g packs are now by far the most popular, making up 69% of all RYO sales (ITUK). With this in mind, it’s clear that value-focused customers are increasingly opting for budget-friendly RYO products that offer the lowest out-of-pocket spend.
“To cater for this demand, it’s key that retailers stock the right RYO product offering and we would highly recommend offering a wide range of leading brands such as Embassy Signature, Riverstone and Players JPS. Although 30g formats may be proving the most popular for shoppers, larger formats still account for 31% of RYO sales, so ensuring a range of 50g formats is available should also be a focus,” adds Malm.
“While products in the value and economy price tiers account for more than half of RYO sales, the premium price sector in fact holds the largest share of the RYO market at 36% (ITUK). This demonstrates that, despite the focus on value, there are still many adult smokers who remain brand-loyal and are willing to pay a higher price for a brand they know and trust. With this in mind, we’d recommend that retailers stock a range of leading premium RYO brands, including Golden Virginia.
“A final point to note is that impulse purchases are very much on the rise – these present fantastic incremental sales opportunities for retailers, meaning many are opting to stock a broader range of accessories to take advantage of this.”
Prianka Jhingan, Head of Marketing at Scandinavian Tobacco Group UK, comments: “Just over a year ago STG UK entered the next gen nicotine category with the launch of XQS nicotine pouches. Whilst our core focus is still cigars, next gen nicotine will only grow in importance, so we will continue to leverage our agility and industry knowledge with next gen products to complement our core categories and diversify our product portfolio.”
Over the last five years cigarillos have been the real success story within cigars. Sales are now worth just over £151m (IRI) and they account for more than half of all cigars sold in volume terms. The latest data IRI also shows the total cigar category to be worth just under £326m in annual sales, with all three other segments in varying degrees of volume decline.
To further capitalise on the surge in demand for flavoured cigarillos, at the beginning of the year STG UK announced the launch of Signature Action Mix cigarillos, which contain two capsules and combine the flavours of Berry and Mint. They come in ten-packs with an RRP of just £5.85 which is lower than competitor brands but still offering an attractive margin to retailers.
“It’s important grocery retailers stock the right range of cigars rather than a big range, so we usually advise them to consider stocking no more than the top two or three brands in each of the four main cigar segments, as the top ten biggest sellers overall account for well over 90% of total sales. From our portfolio, the must stock brands for a convenience retailer would be Signature Blue, which is the UK’s best-selling cigar outside cigarillos, Signature Action, which is the UK’s third biggest-selling cigarillo and growing fast, our Henri Wintermans Half Corona, which is easily the UK’s best-selling medium/large cigar, and Moments Blue which is our high-quality value proposition,” adds Jhingan.
“I think it’s important for grocery retailers to focus on cigars and cigarillos all year round to make the most of the attractive profit margins. Having said that, there are certain times of the year when cigar sales tend to go up, including the summer, and particularly Christmas, when a larger cigar can become part of the festive celebrations, so it’s really important to be fully stocked to maximise those additional sales. When it comes to pricing, I think it’s always important for retailers to offer a range of cigars with different price points to meet differing consumer needs. But in general, I would suggest they follow manufacturers’ guidance on pricing, as our recommendations afford value for the consumer, whilst giving exceptional margins for them.”
“At STG we like to consider ourselves as the ‘cigar category champions’, so we work closely in partnership with all our multiple grocer customers, from offering promotional support, to visiting head offices providing up to date advice on adult cigar consumers’ smoking habits or assessing inventory levels in order to maintain continuity of supply.”
Roll-your-own specialist Republic Technologies UK is driving increased consumer demand for its brands of choice in the UK’s strong-performing tobacco accessories market.
With the market valued at over £433m, and growing at 14.6% (IRI), Republic Technologies is making a major contribution to sustained category growth, thanks to a combination of ground-breaking NPD, strong retailer relations and trade support for both new and established products.
The £124m (IRI) papers sector continues to perform well, with value sales up 8.4% (IRI) on last year, and Republic Technologies is increasing its presence in this sector by offering consumers more choice within its fast-growing, environmentally-friendly OCB range.
“Shoppers still want quality and value, which OCB delivers, but the plus point for the range is its environmental credentials which offer a clear point of difference vs most other papers, and this is really resonating with roll your own purchasers,” says Gavin Anderson, Sales & Marketing Director at Republic Technologies.
Organic and chlorine free, OCB Rice Papers are made from a blend of rice and organic hemp. The unbleached, ultra-thin papers deliver a premium rolling and slow-burning experience in a natural, brown paper. With 32 papers per pack, OCB Rice is available in both Slim (RRP, £1.10) and Slim & Tips (RRP, £1.73).
Republic Technologies is also underlining its environmental credentials in the £82m filters sector with the rollout of Just Paper plastic free Swan filter tips.
In a category boosting first for tobacco accessories, innovative Just Paper Swan Filters provide consumers with an experience that is similar to traditional cellulose acetate filters, but with a much lower environmental impact
The Swan Just Paper range features a ‘flip-a-tip’ design which dispenses loose extra slim filters, without the use of plastic rods. Each box contains 120 filters, with 10 boxes per outer, with an RRP of £1.45 per consumer unit.
“Choice, innovation and quality are well established drivers of the tobacco accessories category and the Just Paper range delivers in each of those areas. Significantly though, the range has advanced the development of filter tips by offering roll your own consumers a product which not only delivers on performance, but which also has a significantly reduced impact on the environment,” adds Anderson.
Tobacco accessories continues to be a key category for the convenience sector. Sales in the convenience channel account for more than half of all tobacco accessories sales and are now valued at £241m, growing at 14% year-on-year (IRI).
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