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ISSUES
ANTI ILLICIT TRADE
Smuggling is a major global problem for manufacturers of many goods, including computers, electrical goods, cars, watches, wines and spirits, perfumes and tobacco. It is caused by tax differentials, weak border controls, and import restrictions and bans, and only governments can tackle it effectively. Smuggling damages our business, and we would like every market to be entirely rid of it. British American Tobacco companies do not smuggle and we do not condone smuggling. We work actively with governments and customs & excise authorities around the world to help them eliminate smuggling and ensure we can compete fairly and openly.
Our Groups business enables governments worldwide to gather over £15 billion a year in taxes, including excise duty on our products, over 8 times the Group's profit after tax. the vast majority of the markets where we operate are orderly.
Smuggling is caused by tax differentials, weak border controls, and import restrictions and bans - often to protect state monopolies - on goods which are in high consumer demand. Where governments are not prepared to address the causes of smuggling, it can rapidly spiral to overwhelm an orderly market and will frequently be penetrated by organised crime.
Smuggling and counterfeiting damage our business. We would like every market to be entirely rid of them. When regulators fail to crack down on counterfeiters, not only do legitimate companies suffer as illegal producers undermine market share and brand loyalty, but governments suffer as the tax revenues from legitimate products fall.
We believe if governments and regulators choose to work constructively with the legitimate tobacco industry, they can achieve a 'win/win' scenario, including sensible tax policies which ensure predictable government revenue flows. However, if governments choose to exclude the legitimate industry, they face the risk of abrupt descent into disorderly markets characterised by counterfeiting, smuggling and a growth in organised crime.
EU Social Reporting can be the best opportunity to strengthen our co-operation with relevant stakeholders in order to reach common objective which is elimination of smuggling and counterfeiting.