Mayfair and Silk Cut cigarette supplier JTI has called for more prosecutions and tougher penalties to curb tobacco- related fraud.

In a new report on cross-border shop- ping and smuggling, the company said initiatives aimed at reducing smoking – including higher taxes and the display ban – would cause more illegal trade in non-UK duty-paid tobacco, which HM Revenue & Customs figures show are already costing the Treasury £2.9 billion a year.

JTI claimed rising cigarette duty had already seen products where no UK duty has been paid increase from 13.8% of total consumption in the second quarter of 2011 to 16.4% in the corresponding period this year.

Southgate said: “With the government losing out on as much as £55 million a week in revenue because of tobacco smuggling, I find it perplexing that only 133 people were convicted for tobacco-related fraud [in 2010/11]. Does that really act as a deterrent?”

Southgate’s call for tougher action came as two men were jailed for attempting to smuggle cigarettes into the UK. Barry Wood, a freight distribution manager from Maidstone, Kent, was jailed for six-and-a-half years and lorry driver Romulus Boca, of Romania, for three years.

In a separate case, Marius Klein, of Lubomierz, Poland, has been sentenced to two-and-a-half-years after pleading guilty to his part in setting up an illegal tobacco factory in Nottinghamshire.