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Tag: illicit

  • Malaysia’s Illicit Tobacco Trade Down, But Evolving 

    Malaysia’s Illicit Tobacco Trade Down, But Evolving 

    Officials in Malaysia announced that 55% of the cigarettes being purchased are illegal, a decline for the fourth consecutive year since 2020’s peak of 63.8%. JT International Bhd (JTI Malaysia) managing director Juliana Mohd Yahaya said law enforcement efforts in curbing illegal tobacco smuggling and a ban on trans-shipments of tobacco products are helping the cause.

    “We expect the incidence of illicit cigarettes to continue to decline this year,” she said at a news conference discussing the nation’s annual Illicit Cigarettes Study for 2024. “What has also contributed to the reduction in illicit cigarette incidence is the ongoing tobacco tax moratorium by the Ministry of Finance. But we know that at some point, [the moratorium] will end, so if the government were to impose an excise increase on tobacco products, we hope that it would be a moderate and predictable one.”

    Another finding from the study was that an ever-increasing number, 13.8%, of illicit cigarettes bore fake tax stamps, leading companies like JTI Malaysia to advocate for the government’s transition from paper-based tax stamps to digital tax codes, aligning with the government’s digitalization drive.

    Malaysia’s nicotine makeup consists of consumers using 23.8% legal cigarettes, 29.9% illicit cigarettes, 25.3% e-cigarettes/vapes/HTPs, and 20.4% of users who use both traditional and alternative products.

  • Thai PM Orders Crackdown on E-Cigs

    Thai PM Orders Crackdown on E-Cigs

    Following a raid in Bangkok that seized 3,000 vapor items worth more than 2 million baht ($60,000) over the weekend, Thailand’s Prime Minister, Paetongtarn Shinawatra, ordered a comprehensive crackdown on e-cigarettes, warning that any officials found complicit will face serious consequences.

    The Thai government’s spokesperson, Jirayu Huangsap, said that the directive comes amid reports of widespread e-cigarette sales and corruption across the country.

     “The Prime Minister has ordered a crackdown on e-cigarettes and urged decisive action against any officials involved,” Jirayu said. “This operation covered just one jurisdiction under the Metropolitan Police Bureau, yet numerous illegal vendors were found operating openly.”

    Jirayu said shops selling the products were not concealed but operated openly on streets with eye-catching displays, making it unlikely that local police patrols would overlook them. He also said some of the shops were operating near schools, with reports suggesting certain officials had accepted bribes to turn a blind eye to these activities.

     “In areas where arrests are made by other agencies, local police must be investigated to determine whether negligence or involvement in bribery is a factor, similar to when illegal gambling dens are discovered in their jurisdictions,” Jirayu said. “I have already reported this to the Royal Thai Police. If commanding officers fail to take action, the problem will persist. The situation has escalated to the point where potent drugs are being mixed into e-cigarettes, resulting in youth fatalities, including cases of lung perforation.”

  • Illicit U.S. Vape Sales at $2.4 Billion for 2024

    Illicit U.S. Vape Sales at $2.4 Billion for 2024

    Sales of illicit, flavored disposable vapes in the United States accounted for 35% of the e-cigarettes sold in convenience stores and supermarkets in 2024, according to Reuters. The $2.4 billion in sales marks a considerable improvement over 2023’s $3.2 billion.

    The research comes from a source at Circana, which could not confirm the data as it is not officially public yet. The company’s data only tracks sales in certain channels such as convenience stores but does not capture vape sales made online, in independent stores, or specialty vape outlets.

    Circana told Reuters that it estimated the entire vape market it tracks to be $6.8 billion last year.

  • Belgium’s Largest-Ever Illegal Cigarette Factory Discovered

    Belgium’s Largest-Ever Illegal Cigarette Factory Discovered

    On Thursday (Feb. 20), Belgian customs officials seized 30 million cigarettes in Lommel (Limbourg), raiding the largest illegal cigarette factory ever discovered in the country. The illicit cigarettes represented more than €14.4 million in evaded taxes.

    Authorities uncovered a fully operational production facility with four complete production and packaging lines running continuously. Approximately 50 people, mainly of Ukrainian, Moldovan, and Romanians, were working at the site. Customs officers also confiscated several tons of tobacco and various branded cigarettes stored in the warehouse.

    This is the first clandestine factory uncovered in 2025, following a record year in 2024 when 12 illegal cigarette production sites were dismantled.

  • Hong Kong Sees Surge in Visitors Carrying Illicit Cigarettes

    Hong Kong Sees Surge in Visitors Carrying Illicit Cigarettes

    Cigarette smuggling occurrences in Hong Kong surged 80% last year, accounting for 68% of the total number of cases handled by Hong Kong Customs, officials said. At a news conference today, the Customs and Excise Department said more than 21,000 of the 31,000 total cases they handled in 2024 involved illicit cigarettes.

    Chan Tsz-tat, who became the city’s Commissioner of Customs and Excise in December, attributed the surge in cigarette smuggling cases to a 94% increase of inbound travelers found with cigarettes that exceeded the 19-stick duty-free limit. Chan said the underlying reason for the increase is that Hong Kong increased the tobacco duty from HK$1.9 (24 US cents) to HK$3.3 per cigarette over the past two years.

    Customs seized about 600 million sticks of illicit cigarettes, which is actually a decrease of 6% compared with the previous year as smuggling syndicates are lowering the number of cigarettes being smuggled at one time and diversifying smuggling channels to minimize losses. Customs officials made 40 large-scale cigarette confiscations, during which it seized 328 million cigarettes. 

  • BAT: Illicit Vapes Making Market “Unsustainable”

    BAT: Illicit Vapes Making Market “Unsustainable”

    British American Tobacco’s growth in smoke-free products was deemed to be dragged down by the prevalence of illicit vapes in the US market, making for disappointing numbers in 2025. The company reported that vape sales in the US fell 0.8% last year, with price increases failing to make up for a slump in volumes, a sign that competition from unauthorized manufacturers is eroding its market share.

    Cigarette volumes in the US plunged 10.1%, BAT said, blaming a downturn in consumer spending and an increase in the discount category, where the company does not operate. The company is forecasting growth in adjusted operating profit of 1.5% to 2.5% for 2025.

    “We all understand the situation is unsustainable in the US on the vapor side,” said Chief Executive Officer Tadeu Marroco on a call with reporters, adding that the illicit vapes mean that users have no control over the specifics of what they are consuming. “Hopefully the new administration will bring a new way to think about enforcement.”

  • Lithuanian Customs: Huge Increase in Counterfeit Cigarettes from Latvia

    Lithuanian Customs: Huge Increase in Counterfeit Cigarettes from Latvia

    Lithuania’s State Border Guard Service says it has already intercepted half a million packs of illegal cigarettes coming into the country from Latvia, after only confiscating 111,000 illegal packs last year. Lithuanian customs officials say there has been a huge increase in the production of counterfeit cigarettes in Latvia, which are ending up on the Western European market.  

    “Illegal cigarette production in Latvia was particularly active last year, and the scale is really impressive as 30 truckloads were intercepted at the end of last year,” said Darius Zvironas, director general of the Lithuanian Customs Department. “Not the total amount produced, but the amount waiting to be shipped out. These are huge figures.

    “The flow of such cigarettes from Latvia goes through Lithuania, mainly towards Western Europe, and some of them end up in Lithuania.”

    Earlier this week, a shipment of smuggled cigarettes from Latvia worth €620,000 was intercepted in the Raseiniai District.

  • PTB Dissolution Hurts Farmers, Opens Illicit Market

    PTB Dissolution Hurts Farmers, Opens Illicit Market

    The Pakistani government’s decision to dissolve the Pakistan Tobacco Board (PTB) and hand over the regulatory authority to provincial governments has sparked months of controversy, and will likely have severe economic, social, and regulatory consequences, said Osama Siddiqui, a macroeconomic expert.

    “The PTB has played a pivotal role in regulating tobacco production and the industry under a centralized system that benefits all stakeholders, including farmers and the legal tobacco sector,” Siddiqui said.

    He added that the dismantling of the system could lead to a surge in illegal tobacco cultivation and sales, which would undermine the legal industry. One of the PTB’s critical contributions has been ensuring fair prices for tobacco farmers, especially in Khyber-Pakhtunkhwa (K-P), where the majority of Pakistan’s tobacco is produced. By maintaining a balance between supply and demand, the PTB has safeguarded farmers’ interests, providing them with a stable income.

    The expert fears that provincial governments lack the capacity to manage this responsibility effectively. Without the PTB’s oversight, the farmers could face financial hardships due to falling prices and market instability. A decline in tobacco production will deprive the farmers of their livelihoods and leave them vulnerable to exploitation.

    The PTB’s centralized regulation has also fueled growth in tobacco exports, which increased from $42 million in 2019-20 to $108 million by the end of 2024. Additionally, legal tobacco sales have made a substantial contribution to the national treasury by generating Rs237 billion ($853 million) in revenue through the federal excise duty and sales tax.

  • Philippines Approves Tobacco Tracking Bill

    Philippines Approves Tobacco Tracking Bill

    To deter illicit nicotine products, the House of Representatives in the Philippines approved a measure to introduce a track-and-trace system for tobacco products. Under HB 11286, cigarettes, vapes, and tobacco products would need to be affixed with a stamp that has “physical or digital features,” while requiring companies to register equipment needed in making cigarettes and electronic vapes with the government.

    “The illicit tobacco trade in our country is alarming,” Rep. Ray Florence T. Reyes, who sponsored the measure, said. “One in five sticks of cigarettes did not pass the quality control and is more likely to cause death. “These unregulated products expose consumers to greater health risks.”

    Meanwhile, the House Ways and Means panel is eyeing an annually alternating tax rate hike scheme on cigarette products, while also tweaking the tax rate over all tobacco products. HB 11360 seeks to implement an odd-and-even numbered tax rate increase for cigarettes to curb the surge of illicit tobacco products in the Philippines.

    “The rate of tax imposed shall be increased by 2% every even-numbered year effective on Jan. 1, 2026, and 4% every odd-numbered year, effective on Jan. 1, 2027,” the bill stated, changing the tax rate structure across all tobacco products.

     “The increase shall be implemented until Dec. 31, 2035, provided that after the 10-year period, a review of the tax imposed and its impact on revenue collections, health costs, and prevalence of smoking shall be conducted.”

    Discussions over the levied tax rates for cigarettes have taken a front seat at the House tax panel, which is eyeing to reduce excise tax losses over the tobacco industry due to smuggling. Excise tax rates for heated tobacco, cigarettes, and vape products are levied a yearly 5% tax rate increase from 2024, according to the Bureau of Internal Revenue’s (BIR) website.

    “BIR revenue data show that further successive increases in tax rates have failed to result in higher collections,” Euvimil Nina R. Asuncion, revenue operations group director for the Finance department, said. The BIR collected only P134 billion (USD $2.3 billion) of its budgeted P185 billion (USD $3.1 billion) tobacco excise tax in 2024.

    However, Anthony C. Leachon, former Department of Health advisor and convener of health advocacy group Sin Tax Coalition, said the bill would actually lower revenues collected.

    “We project that this will lead to P29 billion of forgone revenue for public health and tobacco farmers from 2026 to 2030 and will make cigarettes and electronic smoking devices more accessible to the youth and the poor,” he said.

  • England: Half a Million Fake Cigarettes Seized

    England: Half a Million Fake Cigarettes Seized

    The Hull (England) City Council announced that last week it seized more than 500,000 counterfeit cigarettes and vapor products from a property on Anlaby Road.

    The council’s trading standards team and Humberside Police said it seized “266 pounds (121kg) of cigarettes and 500 vapes hidden in stacks of cardboard boxes.”

    “Tobacco like this is about more than just cheap cigarettes or vapes,” Charles Quinn, city councilor said. “Products aren’t subject to any safety regulations – they could pose a significant fire risk and there’s simply no way to know what you’re actually buying.

    “Research also shows they fund organized crime. There’s simply no place for these counterfeit products in our communities”.