The UK government is using digital track-and-trace technology from Swiss firm Dentsu Tracking in its fight to close down illicit tobacco supply chains.

The system, which was successfully launched this month, provides the UK government with digital, data-driven traceability functionality across the entire tobacco supply chain. The system forms a pillar of the UK’s anti-illicit trade strategy, supporting Her Majesty’s Revenue & Customs (HMRC).

“We are honoured to work with HMRC and help the UK in the fight against illicit tobacco trade,” said Philippe Castella, managing director of Dentsu Tracking. “Our digital system is tailored to the policy objectives of HMRC and designed to address the specific characteristics of the UK market. This ensures that the system provides HMRC with the highest level of visibility and government control over the entire UK tobacco supply chain.”

The track-and-trace system established by Dentsu leverages the advantages of digital technology to enable the movement of legal tobacco products to be monitored and allow UK authorities to detect and fight the different forms of illicit trade, thereby curbing the circulation of non-compliant products for which taxes have not been paid and that do not meet all legal requirements in terms of content and packaging.

Reducing the circulation of non-compliant tobacco products enables the UK to increase national tax collection while protecting citizens and legitimate businesses.

The system was designed in line with all applicable UK and international laws, including full compliance with the FCTC Illicit Trade Protocol that requires parties to ensure the tracking and tracing of tobacco products along both manufacturing and key distribution points.

By integrating data analytics tools, Dentsu’s system transforms the collected supply chain data into meaningful information that helps UK authorities identify potentially fraudulent events. The system supplies HMRC with real-time analyses, statistics and alerts.

“At Dentsu Tracking, we strongly believe that the added value of tracking and tracing is only as strong as the level of supply chain insights that the system delivers to government bodies,” said Jan Hoffmann, Dentsu’s director of government business. “Collecting data therefore is not enough. We generate powerful business intelligence that will help the UK authorities to carry out targeted controls and real-time investigations in the field.”

All businesses engaged in the manufacture, importation, exportation, storage, distribution and sale of tobacco products into and through the UK supply chain must use the track-and-trace system. Track-and-trace requirements have existed in the UK since May 2019 and apply to cigarettes and roll-your-own tobacco. All other tobacco products will have to comply with the requirements from May 2024.

In November 2021, by means of a public procurement process, Dentsu Tracking was appointed as provider for establishing and operating a new UK tobacco track-and-trace system. Dentsu replaced the previous provider De La Rue.

Dentsu provides track-and-trace services to 28 governments worldwide and supplies and operates government-controlled systems in more than 40 countries.

Dentsu Tracking is headquartered in Geneva, Switzerland, and is a subsidiary of Dentsu International, which has a $9bn turnover and is registered on the Tokyo Stock Exchange.