Every cigarette packet sold in Britain is to contain a radio frequency identification (RFID) chip under a new scheme designed to combat tobacco smuggling and counterfeiting.
The technology will allow HM Revenue and Customs officials to use hand-held electronic devices to determine whether an individual cigarette packet is bootleg or genuine and whether or not duty has been paid on it.
Since 1 October, RFID tags have been embedded in each packet of cigarettes produced for sale in Britain. The British government is expected to reveal further details this week in its pre-budget financial review concerning the new scheme.
The UK's Tobacco Manufacturers’ Association — which includes the largest cigarette suppliers — is helping to run the scheme in conjunction with Revenue and Customs, and initially the tobacco makers will fund the initiative.
The scheme is expected to end the expensive and lengthy test procedure to authenticate each pack that is suspected of having been imported illegally. The TMA estimates that about three per cent of cigarettes smoked in Britain, or 2 billion, were counterfeit.
The government believes the illegal trade is responsible for £ 3.5 billion (USD 7.1 billion) in lost British tax revenues per year, in addition to lost revenues of £ 800 million for the tobacco industry. The duty on tobacco raises about £ 9.5 billion a year for the treasury. Customs officers expect to start using the technology early next year, when old stocks of cigarettes without the RFID tags have passed through the supply chain. (pi)