Wholesalers in Scotland are urging the Scottish Government to look closely at the findings of a newly published report from Australia which shows that the market in illicit tobacco in the country has risen significantly since the introduction of plain packaging in December 2012.

The Scottish Wholesale Association (SWA) says that the KPMG report, 'Illicit Tobacco in Australia', provides compelling early evidence that plain packaging will encourage the illicit trade of goods, damaging legitimate operators in Scotland. KPMG's report also reveals that consumption of tobacco has not decreased since plain packaging took effect in December 2012.

"We would urge the Scottish Government to take time to consider this respected report by KPMG," said Kate Salmon, SWA executive director. "The report states that Australia's illegal tobacco market has risen to around 13% since the introduction of plain packaging just under a year ago, costing the Australian Government up to AUD$1bn in lost excise revenue.

"This is disturbing and should set alarm bells ringing that the introduction of plain packaging in Scotland will harm wholesalers and their retail customers by further benefiting the black market - and do nothing to encourage people to reduce their consumption of cigarettes and tobacco."

The Scottish Government is progressing plans to introduce plain packaging and will embark on a consultation early next year.