Scrap the tobacco tax escalator to protect independent retailers
The Tobacco Retailers’ Alliance writes ahead of the Budget and asks the Chancellor to abolish the tobacco tax escalator or witness even more independent retailers going out of business.
I am a tobacco retailer. Like any other tobacco retailer, I have had to deal with successive pieces of burdensome legislation in recent years.
I’ve had to change my shop to comply with new regulations about the display of tobacco products; I’ve watched my customers go elsewhere in search of cheaper, illegal tobacco as a result of the impact of the Government’s tobacco duty escalator; and this year, in May, I will have to explain to my customers why they cannot buy cigarettes in packs of fewer than 20 or hand rolling tobacco pouches smaller than 30 grams, which is a direct result of an EU Directive that will ban them.
Like it or not, tobacco remains an important category for independent retailers. On average, it accounts for around one third of total revenue in shops like mine. And when smokers come into my shop, they usually buy a newspaper or chewing gum alongside their tobacco. This extra income is so important for independent retailers and we’ll see less of it if the Government increases tobacco tax at the Budget in March.
I am worried that more tobacco tax, on top of all of the legislation that has been introduced recently, will drive more of my hard working customers to buy tobacco from non-shop, often illegal, sources. Already, this costs a typical independent retailer around £30,000 per annum in lost sales.
Why does any of this matter? It matters because local independent retailers – like me – are at the heart of communities up and down the country. We are central to local economies and provide vital services to millions of people every day. Britain, it was once said, is a nation of shopkeepers. But, with the burdens now being placed on retailers, we risk becoming a nation without shopkeepers.
I often say that once a local shop is gone, it is gone forever and that could not be truer in today’s climate. The challenges that independent tobacco retailers face are bigger than ever. The last thing we need is more tax on tobacco products, which will drive up prices and push people into the illegal market. Illegal tobacco hurts retailers, taxpayers and the community. That’s why the Government should scrap the tobacco tax escalator.
