Imps man in smuggling probe

A SALES executive of Imperial Tobacco, Britain's second-biggest cigarette company, has been arrested in a Customs & Excise probe into cigarette smuggling.

The man, who is based at its Nottingham factory, was released after questioning but the inquiry is continuing. The company refused to comment. 'Imperial Tobacco does not believe it appropriate to comment on allegations made about individuals,' it said.

Customs & Excise says Imperial ignored advice not to deal with foreign firms and individuals suspected of being involved in smuggling cigarettes. It operates a 'yellow card - red card' system warning makers against dealing with certain people and organisations because of their reputation. Warnings vary with the gravity of Customs' concerns.

Imperial received several warnings about trading with individuals and organisations in Afghanistan and Moldova. But a senior Customs source said: 'Imperial repeatedly ignored them.'

Customs & Excise and the powerful Commons Public Accounts Committee are independently looking into why half the contraband cigarettes sold in Britain are Imperial Tobacco brands.

Imperial, which owns the Regal, Superkings, John Player, Embassy and Lambert & Butler brands, has just reported pre-tax profits of £261m for the six months to April - up by 17% over the same period last year. And it has bought German cigarette maker Reemtsma for £3.7bn. Reemtsma produces West cigarettes, which are Europe's most frequently smuggled brand, according to the World Customs Organisation.

Customs & Excise has given the committee a six-page dossier on the activities of Imperial Tobacco.

The committee chairman, Tory MP Edward Leigh, says the file makes out a 'substantial' case against the firm. Imperial's chief executive-Gareth Davies, has been ordered to appear before the Committee on 19 June - and the company insists he is looking forward to explaining its position. Customs & Excise chief Richard Broadbent will also be there. He has complained to the Committee that Imperial has not fully cooperated in tackling smuggling.

Financial Mail has discovered that 30m cigarettes seized in Dublin on 13 May were Superkings. The cigarettes, valued at £4.2m, were originally destined for eastern Europe but ended up in Dublin in four 40ft containers labelled as furniture. They had come from Miami via Rotterdam.

Imperial insisted that it dealt only with bona fide distributors, and a spokeswoman said the firm had cooperated by cutting or stopping supplies to countries targeted by smugglers. 'Since March 2000 we have ceased trading with more than 20 distributors, including those servicing Moldova and Afghanistan. Most were terminated on our initiative, not at the request of Customs & Excise.'