Smuggling cheap tobacco from Gibraltar 22 August 2013 Last updated at 05:13 By Phil Kemp BBC Radio 4's The Report, Gibraltar There are two things that strike any visitor to the frontier between Gibraltar and Spain. On the Spanish side, behind the perimeter fence, hundreds of bicycles, heaped in a large pile, rust in the summer sun. In Gibraltar, the first thing you come to, once your passport has been checked, is a kiosk selling cheap tobacco. The two things are linked. The bicycles have been seized from cyclists trying to smuggle tobacco across the border into Spain, where they can make a healthy profit. Cigarettes are around 40% cheaper in Gibraltar than they are in Spain, and a third of the price you would pay in the UK. But the difference in price has fuelled an illegal trade that appears out of control. Last year, the Spanish government says, it seized 139 million illegal cigarettes smuggled in from Gibraltar. That is more than double the figure for 2009. Spain says its increased checks at the border, leading to long queues, are in response to the problem of smuggling. But people in Gibraltar argue that they are in retaliation for the installation of an artificial reef in their waters that has prevented Spanish boats from fishing. The queues that I saw certainly appeared to be worse for vehicles attempting to enter Gibraltar than for those leaving. Politics aside, even some Gibraltarians acknowledge they have a problem with smuggling. Shawn Gulraj runs a convenience store called Ramsons in Gibraltar's main square, Casemates. "Obviously smuggling is rife in Gibraltar at the moment, especially fuelled by the crisis across the border," he said. In the Spanish town the other side of the border, La Linea - so named because of its location at the frontier - unemployment has reached 40%. "People make a living off it - they earn up to £4 or £5 per carton of cigarettes if they take it across the border and sell it," said Juan Jose Uceda, a spokesman for Spanish cross-border workers. He told me unemployed locals were driven to the trade. This is only people wanting to live - they have no means to pay for even a plate of food for their children. They are so desperate even the Guardia Civil [the Spanish Civil Guard] feel sorry for them. It's quite obvious from people on the street, people stuffing their cars and clothing and motorbikes and baby carriages, that people do not stick to the limit End Quote Shawn Gulraj Across the border from Gibraltar in La Linea I tested how easy it would be to find cheap cigarettes. At a kiosk in the centre of the town, no tobacco was on display but I asked for a pack of 20 cigarettes to try my luck. The vendor leaned out of view to retrieve a pack emblazoned with large English print warning about the dangers of smoking. It was clear that they had come from Gibraltar. Governments on both sides of the border have imposed limits on the amount of tobacco that can be purchased. On the Spanish side, residents within a 15km radius of Gibraltar are restricted to just four packets or 80 cigarettes a month bought from the Rock. In Gibraltar, tobacconists can sell only a maximum of five cartons or 1,000 cigarettes in one go. But Shawn Gulraj told me that despite the limits, smuggling was a growing problem. It's quite obvious from people on the street, people stuffing their cars and clothing and motorbikes and baby carriages, that people do not stick to the limit. If you go into the more concentrated areas, you'll see four or five tobacconists right next door to each other. One such area is Devil's Town Road, which runs parallel to the runway and borders the airport. What is the difference between that and people going over on booze cruises from the UK to France to purchase alcohol?  End Quote Fabian Picardo Gibraltar's Chief Minister The street is littered with ramshackle tobacconists that look like they opened for business in a hurry and could shut down just as quickly. One shop in particular was doing a roaring trade. In the corner, a young Spaniard tore up a carton of cigarettes, separating out the packets and taping them together in a long, thin line. The shopkeeper told me he knew what was going on but declined to be interviewed. But in the back of the shop, it was clear his customers were smugglers. All the way along the narrow street, smugglers stripped the inside bodywork out of old vehicles and lifted up car seats to stow their illegal supplies. One had even brought some elderly relatives with him - presumably to make it less likely the car would be stopped and searched. The customs officers are not to know that the two old Spanish women in the car are sitting on top of hundreds of illegal cigarettes. But Gibraltar's Chief Minister, Fabian Picardo, insists the problem is under control. "The Gibraltar authorities have made a huge number of arrests in the past year," he told me. And he says the booming trade is just a product of being a border town. What is the difference between that and people going over on booze cruises from the UK to France to purchase alcohol? There is in every frontier town always an arbitrage to be made one way and the other. Gibraltarians go to Spain to buy things that are cheaper in Spain than in Gibraltar. At the end of the interview, Mr Picardo told me he does not smoke himself and does not like the habit. The enormous number of tobacconists in Gibraltar, though, are unlikely to be worried about that. It is one of the few aspects of life on the Rock at the moment where the Spanish are more than welcome.