Illicit Cigarettes Set to Dominate Pakistan

Illicit cigarettes may exceed legitimate tobacco sales in Pakistan within the next quarter, warn some industry insiders, according to Profit. The illicit products have already secured more than 40 percent of the market.

The tobacco industry has criticized the Federal Board of Revenue and the Ministry of Health for their perceived failure to curb the illicit market.

Sami Zaman, head of external affairs at Pakistan Tobacco Co., warned that if left unchecked, illicit cigarette sales could secure more than 50 percent of the market share in months.

Illicit cigarettes offer lower price points and many flavor options but lack proper taxation and legally mandated graphic health warnings.

The industry is having a hard time fighting this due to a supply shortage of legal products; 75 million kg of raw tobacco was secured for the entire cigarette manufacturing industry despite promises of 85 million kg, causing cigarette prices to increase dramatically.

The licit cigarette industry saw a 44 percent decrease in cigarette manufacturing during June 2023 followed by a 28.4 percent decrease from July 2022 to July 2023.