Tobacco manufacturers are warning that the government's latest tax increases could be seriously damaging for the industry.
Firms in the sector believe that further taxation on tobacco will lead to a surge in the amount of smuggled cigarettes entering the UK.
Chris Ogden, chief executive of the Tobacco Manufacturers' Association, told the Guardian that the Treasury would ultimately be losing out if tobacco sales drop.
This is because the government currently receives as much as 77 per cent of the price of a packet of cigarettes in duty. Each year this totals around £11 billion – more than corporation tax from the financial sector contributes to the economy.
Mr Ogden is now urging the government to think more carefully about its taxation strategy, to ensure it is beneficial for the country and for tobacco manufacturing companies.
John Whiting, assistant director of criminal investigation for HM Revenue and Customs, recently reminded smokers that buying smuggled cigarettes undermines honest business in the tobacco industry.
Typical Guttridge equipment used in the tobacco products manufacturing industry includes:
