Illegal tobacco supplies hurt legitimate market

Foreign competition is depressing the UK tobacco market as companies battle high taxes and an increase in smuggling. The UK tobacco market is declining by 10% a year, but the number of smokers is not declining at the same rate, says Rupert Welchman, Pan European tobacco analyst at Threadneedle. The reason is that 15-20% of the tobacco sold in the UK is smuggled in and a large proportion of consumers buy from the foreign market. He adds: "So while the legal market is on a downturn, the illegal and foreign market is on the upswing." Gerard Callahan, fund manager at Baillie Gifford, points...