Illicit Tobacco: Illegal Profits, Public Peril

A report by the Campaign for Tobacco-Free Kids

Hundreds of billions of cigarettes are “vanishing” each year from legal trade channels into an underworld market, and the counterfeiting of cigarettes is growing steadily, all at an enormous cost to public health and nations’ economies.

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From China to the United Kingdom, and from Canada to Brazil, this outlaw trade spans the globe. The illicit trade of tobacco products is so pervasive that it was estimated at 10.7 percent of worldwide sales in 2006, or 600 billion cigarettes, and cigarettes are believed to be the most illegally
trafficked legal product in the world.

The human impact is grave. Smuggling, whether of genuine or counterfeit brands, delivers cigarettes that are cheaper to buy. Because cheaper cigarettes lure youth and other new customers, they boost sales and consumption and make it harder for smokers to quit. As a result, illicit
trade adds steadily to health care costs, worker productivity losses and the growing global death toll from tobacco use: 5.4 million lives a year, projected to rise to 8 million by 2030.

The economic harm is also severe. The smuggling of genuine cigarettes steals as much as an estimated US $40 billion to US $50 billion a year from governments in tax revenue,5 with counterfeit trafficking stealing billions more. In addition, public health strategies are undermined; honest businesses suffer from unfair competition; and public safety is threatened when illegal profits support organized crime and even terrorist networks.

To save lives and billions of dollars, strong international efforts are needed to eliminate illicit tobacco trade. One effort has begun. Parties to the Framework Convention on Tobacco Control (FCTC), an international treaty that took effect in 2005, are working to negotiate a treaty devoted to ending illicit trade. This paper will give an introduction to illicit tobacco trade; discuss its causes and impact; and explore ways to combat it.

Read the full report.

Posted in My Work, Scrolling Image, Fri, 22/05/09