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New tobacco legisation is having a detrimental impact on business, retailers say

Almost two-thirds of convenience stores are already feeling the impact of plain tobacco packaging and the ban on small packs, despite the new rules not coming fully into force for just over two months.

A survey conducted by the Tobacco Retailers’ Alliance over the past few weeks has found 60% of small retailers say the phasing out of packs containing fewer than 20 sticks or 30g of rolling tobacco alongside standardised packaging was already having a detrimental impact on their business.

The TRA said feedback it had received from retailers suggested customers who could no longer purchase their regular smaller packs and who couldn’t afford the larger packs were looking to buy from alternative sources.

Under EU rules, manufacturers were banned from producing smaller formats last May and retailers have until 20 May this year to sell through any non-compliant packs.

“These results confirm what we have long feared; that the banning of small packs and the introduction of plain packaging is having a detrimental impact on many small retailers. Even with two months to go before full implementation, it is clear that these measures are impacting on legitimate businesses,” said TRA national spokesman Suleman Khonat.

“In particular we know that the ban on small packs will impact on footfall and in incidental spend on other items as people no longer come into the shop every day. The feedback from this survey now confirms this.”

As part of the survey, 98% of small retailers said they felt taxation on tobacco was very high while 62% were aware that smuggled or counterfeit tobacco was being sold in their local area.

“Small retailers also believe that tax on tobacco is too high. We know that high tax is leading to the boom in black market tobacco that takes business away from legitimate traders, again as confirmed by this survey, by the high number of retailers who are aware of illicit tobacco being sold in their area,” added Khonat.

“Corner shops are the lifeblood of many communities that, in many cases, would not exist if it wasn’t for selling tobacco. It is crucial that the chancellor recognises this and uses his Budget to help small shops - he could do this by reviewing his current approach to tobacco taxation and by ensuring that there are no new measures or burdens announced next week.”