LONDON – A major new survey commissioned by the Tobacco Manufacturers Association reveals the true impact of high government taxes and new regulations on tobacco sales in the United Kingdom.

The survey found that 72.5% (around 7 million) smokers buy tobacco from sources where U.K. taxes won't be paid, including illicit tobacco and from abroad. Forty-one percent of smokers purchased tobacco from illegal sources. Smokers on higher incomes were as likely to buy illicit cigarettes as those on low incomes.

In addition, smokers are stockpiling cheap or illicit tobacco with 53% of cigarette smokers buying 200 or more when they buy from sources that won't have paid the U.K. tax. Taxes on tobacco have increased by 65% since 2010 and by 5.9% at the 2017 spring budget.

Meanwhile, 45% of smokers said that the ban on small tobacco packs and the introduction of mandatory plain packaging tempted them to purchase illegal tobacco. An analysis by Oxford Economics highlighted that banning small tobacco packs will cost the Treasury £2.1 billion in its first year. Treasury lost out on £3 billion from tobacco purchases which didn't pay U.K. taxes in 2015-16.

Tobacco on which UK taxes is not paid is a major issue for law enforcement and taxpayers. The association’s director general, Giles Roca, said that the high tax policy “has continued to push smokers to buy from non-UK duty paid and illegal sources. … The regulations that came fully into force this year banning small tobacco packs and introducing plain packaging are making the problem worse by pushing smokers towards the illicit market rather than encouraging them to quit.”