Illicit products account for 18.8 percent of Mexico’s cigarette market, reports Mexico Daily, citing a report released by the Confederation of Industrial Chambers of Mexico (Concamin). The figure is up from just 2 percent in 2011.
The illicit trade has cost the government an estimated MXN13.5 billion ($667 million) in uncollected excise and VAT taxes. The report added that the illicit sales create unfair competition for legitimate sellers and noted that the black market was helping to fund criminal activities, which negatively affect public security.
Concamin said that two-thirds of illegal cigarettes do not carry the security code that proves compliance with tax regulations “Illegal cigarettes are a multidimensional problem that has become sophisticated in recent years,” it noted.” Although before there was no local production of illegal cigarettes, today we can see in the market many brands do not have the security code that the government requires through the [tax regulator] SAT. This dynamic represents two-thirds of the problem.”
The Federal Commission for Protection Against Health Risks reported that there are more than 245 brands of illegal cigarettes in Mexico, mainly of Chinese origin, with the brands Win and Brass standing out as leaders in the cigarette contraband market, with 6.7 percent of total cigarette sales.