Fitting radio frequency identification (RFID) chips inside cigarette packets to combat counterfeiting is one option being considered by HM Revenue and Customs (HMRC).

The department has yet to make any decision about how it will identify individual packets, but says RFID is one possibility.

‘It was announced in the budget that we will work with the cigarette industry to develop covert markings on packs,’ said a HMRC spokesman.

‘However we do not yet know what form that covert marking will take. Nothing has been ruled in or out and microchips are one of many options that also include holographic markings.’

The embedding of RFID tags would allow Customs officials to scan cigarette packets with a handheld reader to determine if duty has been paid.

The Tobacco Manufacturers’ Association is reported to support the technology to cut the number of counterfeit products sold in UK retailers. About three per cent of cigarettes smoked in Britain were counterfeit, it says.