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Tag: illicit

  • Philip Morris Supports India’s Crackdown on Illicits

    Philip Morris Supports India’s Crackdown on Illicits

    On World Anti-Counterfeiting Day, Philip Morris International’s (PMI) India affiliate, IPM India, reinforced its commitment to combat illicit tobacco trade, protect government revenue, and uphold product integrity. The pledge aligns with India’s rollout of pack-level track and trace (T&T) technology, aimed at identifying and curbing counterfeit tobacco products.

    India, the fourth-largest illegal cigarette market globally, sees smuggled cigarettes make up 25% of its domestic market, according to PMI estimates. The company emphasized the critical need for stronger enforcement and collaboration to address the issue, which undermines public health, economic stability, and national security.

    Navaneel Kar, managing director of IPM India, praised the government’s T&T initiative, stating it will enhance transparency and enforcement. PMI says it has implemented T&T systems in over 140 countries, including the EU and GCC states, with positive outcomes in reducing illicit trade.

    Rodney Van Dooren, PMI’s Head of Illicit Trade Prevention for Asia Pacific, called for regional cooperation, noting India’s leadership role and growing influence in tackling counterfeit goods.

  • Thai Police Raid Illicit Vape Facility

    Thai Police Raid Illicit Vape Facility

    Thai police raided a large-scale illegal e-cigarette manufacturing facility this past weekend in the Khu Khot subdistrict, seizing more than 21,000 e-cigarette devices and arresting 29 suspects. Officers stormed a three-story commercial building in Lam Luk Ka district, Pathum Thani Province, which had been transformed into a covert production hub. Behind the main office and worker accommodation, police discovered a sprawling three to four rai (4,800 to 6,400 square meters) factory producing disposable and refillable e-cigarettes.

    Police confiscated 6.1 million baht ($189,000) of illegal products, along with assembly tools, sealing machines, and e-liquid filling equipment. Authorities said the factory began illegal production in early 2025, and had recently begun transitioning from disposable to refillable models, and was in the process of installing a conveyor-belt system to boost output.

  • South Australia Shuts Down 5 Stores Under New Tobacco Laws

    South Australia Shuts Down 5 Stores Under New Tobacco Laws

    Five CBD stores have been shut down for selling illicit tobacco and vapes under South Australia’s tough new laws. Four stores received 28-day closure orders, and one was closed for 3 days after raids by the Consumer and Business Services task force. Officials had given stores a grace period but warned that there would be zero tolerance once the laws went into effect on June 5.

    The new laws allow for up to 12-month closures and fines ranging from A$700,000 ($455,000) for an individual to A$6.6 million ($4.3 million) for a “large commercial” business. Landlords may also face penalties if they allow illegal sales on their premises.

    Since July 1, authorities have seized A$34 million ($22.1 million) in illegal products during over 500 inspections.

  • Malaysia Losing $1.2B to Illicit Cigarettes

    Malaysia Losing $1.2B to Illicit Cigarettes

    Malaysia continues to suffer major revenue losses from the illicit cigarette trade, with an estimated RM5 billion ($1.2 billion) in tax revenue lost each year, according to the latest NielsenIQ Illicit Cigarettes Study released in March.

    After peaking at 63.8% in 2020, illicit cigarette consumption continued its slow decline down to 54.6%, according to the report, with 10 dominant contraband brands accounting for 75% of cigarettes smuggled. The study also raised alarm over rampant tax stamp fraud, noting that 31% of illegal cigarette packs bore counterfeit stamps.

    “Organized smuggling syndicates are growing increasingly sophisticated, posing a serious challenge to enforcement and public health policy,” the report stated. Hotspot states such as Johor, Selangor, and Sabah were identified as major entry and distribution points for illicit tobacco products.

  • Belgium Losing €544M from Illegal and Foreign Cigarettes

    Belgium Losing €544M from Illegal and Foreign Cigarettes

    Legal cigarette sales in Belgium continued to fall in 2024, while the volume of counterfeit and smuggled products increased significantly, according to the 19th annual report by consultancy firm KPMG, commissioned by Philip Morris International.

    Nearly 2.4 billion cigarettes consumed in Belgium last year came from non-domestic sources, a 17% increase compared to the previous year, meaning nearly one in three cigarettes smoked in the country were not purchased through Belgian sales channels. While domestically-produced sales declined, 1.1 billion cigarettes in Belgium were legally purchased abroad last year, an increase of 22%. The volume of counterfeit and smuggled cigarettes in the country also grew, by 13%, to 1.3 billion.

    Imports from Bulgaria tripled since 2020 to 770 million cigarettes last year, as did those from Luxembourg at 740 million in 2024. According to KPMG, the shift to illegal or foreign products is estimated to have cost the Belgian government around €544 million in lost tax revenue last year.

  • EU Sees Highest Rate of Illicit Cigarettes Since 2015

    EU Sees Highest Rate of Illicit Cigarettes Since 2015

    According to the 2024 KPMG study, produced annually and commissioned by Philip Morris Products SA, smokers in the European Union consumed 38.9 billion illicit cigarettes in 2024, a 10.8% increase versus 2023, the highest level since 2015. That number accounts for 9.2% of total cigarette consumption, with governments losing as much as €14.9 billion in tax revenues at a time when many countries face intense economic pressures and rising black markets.

    PMI called for effective policymaking to counter the growing threat of illicit trade, and said it believes that steep and abrupt tax increases are exacerbating the issue and benefitting criminals who supply unregulated, untaxed, and inferior products. To combat this growing threat, PMI urges the adoption of evidence-based regulation with balanced and predictable taxation through tax calendars, continued public-private collaboration, and enhanced support of regional and national law enforcement agencies.

    “The illicit tobacco trade threatens the European economy, public health, security, and social stability; today, higher-taxed and higher-priced markets such as France and the Netherlands are especially impacted by illegally imported and counterfeit goods,” said Christos Harpantidis, PMI’s Senior Vice President, External Affairs. “Its massive socioeconomic impact negatively affects tax collection, job creation, and legitimate businesses, the engine of our European economies. The availability of cheap, unregulated cigarettes in the underground economy also impairs efforts to reduce smoking rates and achieve a smoke-free future.”

    France has the largest illicit market in Europe, reaching 18.7 billion illicit cigarettes consumed last year, 37.6% of total consumption. The Netherlands saw the largest increase in illicit cigarettes, which doubled to 17.9% of total consumption.

    A detailed overview of the results, country profiles, and methodology of the KPMG study is available here.

  • Report: Black Marketeers Continue to Evolve with Technology

    Report: Black Marketeers Continue to Evolve with Technology

    Tobacco smugglers and black marketeers are increasingly using technologies such as social media and drones to deliver cigarettes to smokers in Europe and avoid law enforcers, a report found.

    According to the 2024 KPMG study, produced annually and commissioned by Philip Morris Products SA, the illegal networks’ flexible strategies have helped illicit consumption increase 10.8% in the EU from 2023, with criminal groups shifting toward smuggling smaller packages, more often, via budget airlines, railways, and drones. They are also increasingly bypassing physical stores to sell directly to consumers on social media.

    The report showed that criminal groups are holding less inventory, which is reflected in a decrease in the size of illicit cigarette seizures as the gangs mitigate their risks and reduce the impact of raids by law enforcers. The more recent change in tactics follows another shift from 2020, when the groups moved production closer to end-markets, partly in response to the pandemic disruption, and also reducing the chance of detection.

  • Australia’s Anti-Smoking Push Fuels Crime, Fails to Curb Smoking 

    Australia’s Anti-Smoking Push Fuels Crime, Fails to Curb Smoking 

    The Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA) condemned Australia’s tobacco control strategy as a “public health failure” that prioritizes ideology over evidence, fueling a A$6.3 billion ($4.1 billion)  illicit tobacco market while adult smoking rates remain stagnant. New data reveals one in four cigarettes consumed in Australia originates from the black market — CAPHRA says that is a direct consequence of the world’s highest tobacco taxes and restrictive vaping policies.  

    CAPHRA argues this crisis exposes a fatal flaw in Australia’s approach: prohibition without offering safer alternatives drives consumers to criminal networks rather than reducing harm. 

    “Australia’s tobacco policy doesn’t pass the pub test,” said Nancy Loucas, CAPHRA’s executive coordinator. “Sky-high cigarette prices haven’t made people quit—they’ve made criminals rich.

    “The government’s own figures show smoking rates flatlined at 11% since 2019 despite taxing a pack to A$50 ($32.50). Meanwhile, organized crime syndicates pocket A$2.3 billion ($1.5 billion) annually in evaded excise, funding drug trafficking and violent turf wars.” 

    CAPHRA’s data said Australia’s illicit tobacco trade has surged by 46% since 2020, with over 800,000 smuggled cigarettes intercepted monthly at airports. Criminal syndicates increasingly exploit international travelers, while fire bombings of non-compliant retailers exceed 220 incidents since 2023. 

    “This isn’t just about lost tax revenue—it’s about community safety,” Loucas said. “Melbourne’s ‘tobacco war’ has seen shops torched and innocent bystanders endangered. The government transformed a health issue into a national security crisis by ignoring basic economics: punitive taxes without alternatives breed black markets.” 

  • Kenya: Illicit Cigarettes Jump to 37% of the Market 

    Kenya: Illicit Cigarettes Jump to 37% of the Market 

    Kenya is losing more than Sh9 billion ($69 million) annually in potential revenue (taxes and levies) to the illicit cigarette trade, a new report now indicates, with almost all of these products being smuggled into the country. The newly released findings from a study conducted by international research company Kantar indicate that the illicit cigarette trade in Kenya has soared to a record high, with more than one in three cigarettes sold in the market not paying taxes.

    BAT Kenya is calling for urgent action by the authorities to tackle and mitigate the profound implications of illicit trade in cigarettes, and said “this alarming situation calls for drastic, multipronged action to seal the loopholes and protect legitimate business in Kenya.”

    “This alarming rise in illegal cigarette trade is not only depriving the Kenyan government of vital revenue needed for the country’s economic stability, but is also undermining the security and livelihoods of thousands of Kenyans in our value chain,” BAT Kenya managing director Crispin Achola said. “The illicit trade in cigarettes is not only an economic issue, it is a matter of national security and public interest.”

    Last year, the value of smuggled and counterfeit goods seized at Kenya’s entry points, reached Sh243. 5 million ($1.9 million), according to Kenya Revenue Authority (KRA), up from Sh200 million ($1.5 million) the previous year. Reports also suggest illicit cigarettes jumped from occupying 27% of the market to 37% in just one year.  

  • Pakistan’s Illicit Cigarette Trade Surges to 58% of Market

    Pakistan’s Illicit Cigarette Trade Surges to 58% of Market

    The director of the Pakistan Tobacco Company (PTC), Asad Shah, voiced concern over the growing share of illicit cigarette trade in Pakistan, now estimated at 58% of the market. Speaking at a pre-budget media briefing, Shah highlighted that the total size of the cigarette industry in Pakistan stands at approximately 82 billion sticks annually. Despite this, only 34 billion sticks are currently taxed, a stark decline from 67 billion a decade ago.

    He emphasized the significant loss in potential tax revenue, stating that the sector could generate up to Rs 570 billion ($2 billion) annually. However, only Rs 292 billion ($1 billion) was collected during the fiscal year 2023-24, with Rs 223 billion ($781 million) received in the first 11 months of the current fiscal year.

    Shah revealed that while the legal cigarette sector holds just 42% of the market, it contributes a staggering 98% of the total tax revenue. He criticized the lack of penalties for violating minimum pricing laws, stressing that no policy can be effective without equal enforcement across the board. He also raised alarm over the sale of locally produced cigarettes without tax stamps, which undermines the government’s track-and-trace system.

    To address these issues, Shah proposed several measures, including a revision of the minimum pack price to counter the perception that cigarettes are inexpensive in Pakistan. He also recommended a significant reduction in the adjustable tax on cigarette filter material (acetate tow) from Rs 44,000 $154) per kg to Rs 4,000 (14) per kg to discourage smuggling. Authorities have already seized 450 metric tons of smuggled acetate tow this year.