Tax officials levied a GBP 650,000 (EUR 813,000) fine against British American Tobacco (BAT) for oversupplying a low-priced market outside the UK, a practise which encourages smuggling, the Observer reported.

It was the first time HM Revenue and Customs fined a tobacco company for shipping volumes in excess of reasonable legal demand of that market, although HMRC is monitoring other manufacturers, according to the newspaper. BAT allegedly oversupplied low-priced Belgium with fine-cut tobacco, some of which was returned to the UK as untaxed illicit product. BAT plans to appeal the ruling, the newspaper said.