The volume of manufactured cigarettes sold dropped by 46%, from 23.4 billion sticks to 12.6 billion sticks, while the volume of rolling tobacco fell by 59%, from 8.6 million kilograms to 3.6 million kilograms. Converting kilograms of rolling tobacco into cigarettes using HMRC’s own methodology, Dr Christopher Snowdon of the Institute of Economic Affairs (IEA) found that a total of 19.8 billion cigarettes were sold legally in the UK in 2025, less than half the figure recorded in 2021 (40.6 billion).
Since 2020, excise tax on cigarettes has risen by 73%, and excise tax on rolling tobacco has risen by 115%. Despite these significant tax rises, tobacco duty revenues have fallen from £10.4 billion to £7.9 billion since 2021 and are now the lowest on record, after adjusting for inflation.
Studies have shown that cigarette consumption per smoker has remained stable in recent years. Estimates of smoking prevalence vary but every survey indicates that the decline in the number of smokers has been much less than 52%. Dr Snowdon says that the “inescapable conclusion” is that the illicit share of the tobacco market has grown enormously since 2020.
Commenting on the figures, Dr Christopher Snowdon, Head of Lifestyle Economics at the Institute of Economics Affairs said:
“The explosion of black market tobacco in recent years will not come as news to smokers, nor to anyone who pays attention to cigarette packs on the pavement and in beer gardens, but the dramatic decline in legal sales at a time when the number of smokers has been falling more modestly, is conclusive proof that we have a serious problem.”
