'Rules only work if they are enforced'

Walk into almost any high street corner store in Britain and the chances are that roughly one in three vapes on the shelves is illegal. That is the sobering estimate from industry figures, backed by data showing more than 14,000 cases in 2025 of UK businesses found possessing or selling illicit vaping products.

The scale of the problem extends well beyond consumer protection. Law enforcement agencies have reported cases in which premises selling illegal vapes have also been linked to wider criminality, including the supply of drugs, counterfeit goods and other illicit products.

The trade provides a high-profit, cash-based market that serious organised crime networks have been quick to exploit, with links to drug trafficking, human trafficking, and modern slavery.

In one single operation, Trading Standards seized 46 million illicit cigarettes and over 12,500kg of hand-rolling tobacco across a three-year period. Despite efforts on that scale, the illicit tobacco and nicotine market in the UK continues to grow, with official estimates widely believed to understate the true scale of the problem.

The Tobacco and Vapes Act, which recently completed its passage through Parliament, attempts to address the problem through a retail licensing scheme and on-the-spot fines of up to £2,500. Critics — including the industry — argue it does not go nearly far enough. In France, retailers caught selling illegal disposable vapes face fines of €100,000. The UK’s proposed fixed penalty notices start at £200.

British American Tobacco is one of the world’s largest tobacco companies and has a direct commercial interest in how the new legislation is implemented. That context is worth keeping in mind. But the company also has operational insight into the illicit market that enforcement agencies have found useful — and some pointed things to say about the gap between political ambition and practical enforcement.

BAT’s own characterisation of the current situation is direct: “The ways of the past have failed to stop this issue. Now is the time for a change in approach — otherwise it is only the criminals who will continue to benefit.”

We put some key questions to Tolga Kilic, BAT’s Commercial Director for the UK & Ireland.

BAT is one of the world’s largest tobacco companies with a direct commercial stake in how the Tobacco and Vapes Act is implemented. How do you respond to the argument that industry involvement in shaping enforcement policy is inherently conflicted, regardless of how legitimate the concerns may be?

We fully understand why some people question industry involvement in these discussions. Ultimately, decisions on policy and enforcement rightly belong to government and enforcement agencies.

We operate across the globe and have seen first-hand how regulation can produce unintended consequences when poorly implemented. Australia is instructive here. Well-intentioned tobacco control policies, including high taxes, have been followed by serious unintended consequences — authorities there have publicly acknowledged rising levels of illicit tobacco activity, including organised criminal involvement and tobacco-related turf wars.

Our view is straightforward. Effective regulation benefits from input from all relevant stakeholders, including those responsible for manufacturing, distributing and retailing regulated products. This does not mean industry should determine policy, but it can help identify practical implementation challenges before they arise. Where we engage, our aim is to provide operational insight that supports enforceable, effective outcomes.

BAT is now calling for tougher fines and stronger Trading Standards powers, but for years BAT lobbied against tobacco regulation more broadly. How do you reconcile those two positions?

BAT UK has supported, challenged and sought to improve different regulations over time, depending on their likely effectiveness and impact. Our focus has always been on ensuring regulation is evidence-based, proportionate and capable of achieving its intended objectives.

We support stronger enforcement because rules only work if they are enforced consistently. Legitimate businesses should not have to compete with those operating outside the law, and consumers deserve protection from illegal and non-compliant products.

BAT has also argued that higher fines for retailers must be matched by strong enforcement across the board — including significantly greater resources and powers for Trading Standards, and mandatory pre-market testing for nicotine products shipped to the UK. Without enforcement across all those fronts, illicit supply chains will continue to strengthen regardless of what the legislation says on paper.

You say BAT can identify illicit products and has offered to train law enforcement. Can you give specific examples of where that cooperation has happened and what it produced? Which forces or agencies have you worked with?

We frequently test tobacco and nicotine products that Trading Standards officers send to us, determining whether they are illicit and where they were produced. We have also met with Trading Standards teams across the country to deliver training on how to spot counterfeit nicotine products on shop shelves.

What is BAT’s own estimate of lost legitimate sales revenue attributable to illicit trade, and how is that calculated?

BAT uses a range of established methodologies to estimate the scale and impact of illicit trade, including empty pack surveys, HMRC seizure data, and broader market modelling. A recent KPMG report estimates 7.3 billion illicit cigarettes currently in circulation in the UK — an increase of 1.37 billion year-on-year — alongside £4.87 billion in lost excise revenue.

The data points to a substantial and growing illicit market with a significant impact on both the public finances and legitimate businesses.

Consumers purchasing illicit products are rarely aware they are fake, with little or no oversight of what those products actually contain — a public health risk that sits alongside the organised crime dimension and the loss of tax revenue to the Exchequer.

PP note: KPMG’s illicit tobacco research is funded by the tobacco industry. 

If retail licensing and higher fines are implemented as BAT recommends, what’s your evidence that this would meaningfully reduce organised criminal involvement rather than simply displacing it?

We recognise that enforcement measures must be judged by real-world impact, not intent. A strong retail licensing system and higher fines will not eliminate the illicit market entirely, but they will help disincentivise it and reduce its accessibility, particularly on our high streets.

France offers a useful comparison. Any retailer there caught selling disposable vapes faces a €100,000 fine — a penalty that far outweighs any potential profit. By contrast, the UK’s proposed fixed penalty notices start at just £200. The deterrent effect of that disparity speaks for itself.

BAT has also pointed to the nature of the criminal organisations behind the supply chain as context for why enforcement needs to be robust. These are not small-time criminals. They are large, complex organisations frequently involved in a range of illegal activities beyond the nicotine trade itself — and where illicit activity of this kind is allowed to flourish, further criminality invariably follows.