Margaret Hodge, chairwoman of the House of Commons public accounts committee, accused UK tobacco companies of oversupplying European countries, allowing the surplus to be smuggled back into Britain without paying duties, the Press Association reported.

Lost tax revenue in Britain amounts to GBP 1.9 billion (EUR 2.2 billion) annually, according to the report published on The Guardian website. An estimated 9 per cent of the UK cigarette market and 38 per cent of the roll-your-own trade is illicit, according to the report.