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Wednesday, June 27, 2012

Supermarkets removing cigarettes from stores and selling them in petrol stations to avoid tobacco tax

CRAFTY supermarket bosses are to exploit a legal loophole to scupper a Scottish Government tax on tobacco.

Sainsbury’s said they will stop selling cigarettes and tobacco in three main stores but will keep selling the products in attached petrol stations – in a move that has triggered the interest of other supermarkets.

The Government’s so-called Tesco Tax will hit stores with a rateable value of more than £300,000, which sell both tobacco and alcohol, so it would not apply to the smaller stores

An insider at a rival chain, said: “It’s interesting that Sainsbury’s have taken this approach. There was talk about stores even opening a kiosk in their car park to get round the tax.

“But this move could solve any headaches for retailers as the tax is based on stores with rates of £300,000 that are selling tobacco.”

A Sainsbury’s spokesman said: “The impact of the public health levy, recently introduced by the Scottish Government, has led us to undertake a review of the sale of tobacco in our ­Scottish stores.
“As part of this review, we will remove tobacco products from sale from three of our Scottish supermarkets for the time being. We apologise for the inconvenience.”

The chain’s three stores in Blackhall, Edinburgh, ­Braehead, near Glasgow, and Murrayfield, Edinburgh, will stop selling tobacco but small shops attached to the petrol filling stations at Braehead and Murrayfield ­will continue to do so.

Sainsbury’s removed tobacco products from their St Andrews Square store in Edinburgh last month.
Under the tax, retailers who sell alcohol and tobacco will pay an extra £95million over the next three years.


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