What next, tobacco retailer licensing?

Most of you probably have lives so this may have passed you by.

For people like me however Friday was the closing date for submissions to an HMRC consultation on Tobacco Illicit Trade Protocol – licensing of equipment and the supply chain.

The official description read:

This consultation is about Article 6 of the World Health Organisation Framework Convention on Tobacco Control (WHO FCTC) Protocol. The aim of the Protocol is to eliminate illicit trade in tobacco products.

At Autumn Statement 2015 the government announced its intention to consult on Article 6 of the Protocol. Article 6 of the Protocol is concerned with registration or licensing of participants who trade in tobacco and tobacco products.

The consultation is seeking views on two aspects of Article 6:

– the mandatory control of tobacco manufacturing equipment
– whether the UK should license wholesalers, retailers, brokers etc of tobacco products

The government is keen to ensure that any response to the illicit tobacco trade is proportionate and does not add an undue administrative burden on business. It will therefore be seeking views from a wide range of stakeholders to establish clear evidence-based rationale for its decisions.

No decisions have yet been made in relation to whether parties in a supply chain should be licensed or whether some but not all parties should be licensed.

What should set alarm bells ringing for consumers (as well as retailers) is the suggestion that the UK should license retailers of tobacco products.

Curiously, though, the government doesn't seem interested in the views of the consumer. Section 2 of the consultation began:

Understanding your interest in this tobacco consultation

Businesses, organisations and individuals may have different perspectives and HMRC is interested in understanding the context of the answers you give to all the questions in this consultation.

– a tobacco retailer
– tobacco wholesaler
– a tobacco manufacturer
– a manufacturer of tobacco equipment
– a manufacturer of component parts of manufacturing equipment
– an importer/exporter of tobacco products
– an importer/exporter of tobacco manufacturing equipment
– a transporter/broker/warehouser of tobacco or manufacturing equipment
– a representative body – please specify
– a public health body or group
– Local Government (including Trading Standards) or other enforcement agency
– a member of the public
– Other: please specify

Consumers could, I guess, come under 'a member of the public' or 'other' but why not include 'consumer' as an actual category?

Undeterred, Forest submitted a five-page, 40-point letter on behalf of the consumer. Here are the first ten points:

1. Tobacco is a legal product and it would be wrong to introduce regulations that might unnecessarily restrict the number of legitimate tobacco retailers.

2. Tobacco retailer licensing would place an unnecessary administrative burden on legitimate retailers. It would discriminate against small and independent shops and some retailers could be forced to stop selling tobacco.

3. Current tobacco retailers denied a licence to sell tobacco could lose many of their regular customers. This in turn could force some retailers out of business. Such closures would affect not only customers who smoke but also non-smoking customers who might lose an important local facility.

4. A reduction in the number of retailers selling tobacco would unnecessarily inconvenience many adult smokers by forcing them to travel longer distances to buy tobacco.

5. To save them the inconvenience of these journeys it could encourage consumers to buy larger quantities of tobacco rather than, say, the single pack of cigarettes they might buy currently. This in turn could conceivably increase their consumption of tobacco.

6. Increasing the administrative burden on retailers could lead to higher prices as retailers pass the cost on to the consumer. Price increases could be added to non-tobacco products so the impact of licensing would unfairly hit non-smoking customers as well.

7. By making it difficult to buy tobacco close to someone’s home or place of work, the government will make it more attractive to buy tobacco on the black market.

8. Offered illicit cigarettes in a pub, for example, and it won’t only be the price that’s enticing. The fact that it’s so much more convenient because the local shop no longer sells tobacco could push many more people towards illicit tobacco.

9. There is no good reason we can think of why tobacco licensing should reduce illicit trade. People turn to the black market for one reason only – it’s much cheaper to buy illegal cigarettes than it is to purchase tobacco from legitimate, law-abiding retailers.

10. Tobacco licensing won’t change that. Instead, by potentially reducing the number of retailers selling tobacco, demand for illicit tobacco could increase because cost and convenience could combine to make black market tobacco even more attractive than it is already.

Tobacco licensing is being considered, apparently, as part of a wider programme to tackle illicit trade but as our response above makes clear there is no good reason why it should.

There are already laws to prosecute retailers who sell illicit tobacco. Why would tobacco retailer licensing deter anyone?

Trading Standards already have the power to prosecute shop owners who sell illicit tobacco. Councils can also revoke a premise's licence.

So enforce existing laws, don't introduce new ones that won't make any difference other than inconvenience legitimate, law-abiding retailers and consumers.

Call me cynical but I suspect the real motivation behind tobacco retailer licensing is not to tackle illicit trade but to reduce the number of retailers selling tobacco in order to make it more difficult for people to buy legal products. This is turn will force people to quit.

Anyway we concluded our submission with these three points:

38. We urge HMRC to enforce existing regulations rather than imposing new regulations on small businesses.

39. We also urge HMRC to put the needs of legitimate retailers and consumers first and not succumb to the demands of the tobacco control industry whose goal is to force smokers to quit regardless of whether they want to.

40. If adult consumers choose to purchase a legal product on which they pay a huge level of taxation, their lives should not be made unnecessarily difficult by the imposition of regulations that could conceivably fuel illicit trade and affect many more people including legitimate and hard-working retailers.

A summary of responses to the consultation will be published later this year. I'll keep you posted.

See also: The Government should reject tobacco retailer licensing and If the Government ignores tobacco retailers, regulation will be poorer for it (ConservativeHome).

Comments

[Junican]

Are you not aware of a previous 'consultation' on much the same subject? It tried to claim that 'raw tobacco' was special, except that the EU ruled ages ago that 'tobacco', as distinct from tobacco products, was an agricultural product. EU rules demand that impediments to free trade in agricultural products should not exist. So how can tobacco control demand that EU rules can be overturned? I thought that Cameron et al wanted to stay in the EU, but this consultation demands that we exit the EU rules re agricultural produce.
I think that you have misinterpreted the intentions of this regulation. The importation of tobacco products is already strictly controlled. All the stuff about licences for retailing tobacco products is a con trick. The real intention is to get around the agricultural nature of tobacco leaf.