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World No Tobacco Day 2015

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Call To Action

The official theme of World No Tobacco Day 2015 is the illicit trade in tobacco products. The most effective way to reduce illicit trade is to reduce the demand for all tobacco products, legal or illicit.

May 31 is World No Tobacco Day, an important annual event when we pause to reflect on how to move the world away from tobacco use and toward improved public health.

Tobacco is one of the leading risk factors for non-communicable diseases, including cancer – worldwide, 18% of all cancer deaths, including a staggering 69% of lung cancer deaths, are attributable to tobacco use. Tobacco use is also one of the most preventable causes of cancer deaths.

This year’s World No Tobacco Day theme is illicit trade – tobacco products produced, exported, imported, purchased, sold, or possessed illegally. While illicit trade in tobacco products is undoubtedly troubling from a number of perspectives, including lost tax revenue for governments, increased revenue to tobacco companies, and links to organized crime and possibly terrorism, it is important to look at the whole picture. The tobacco industry consistently tries to claim that strong tobacco control policies increase illicit trade. But, in fact, the single best way to fight the illicit trade in tobacco products is to redouble efforts to use what we already know works to drive down the use of all cigarettes, legal and illegal.

Such practices include: increasing tobacco excise taxes, requiring graphic warning labels on tobacco packaging, making laws to ban tobacco marketing and demanding smoke-free public and work places and anywhere where children might be present.

It is also important to make very clear some fundamental truths about illicit trade.

First, almost all illicit cigarettes start as legal ones: by the industry’s own admissions, the proportion is about 95%. There is overwhelming evidence that the tobacco industry itself is regularly involved in some way in the illegal trade of their products. Furthermore, the tobacco industry often claims that illicit cigarettes are more unhealthy than legal cigarettes, but this is a ridiculous notion considering that these manufacturers make almost all cigarettes. More to the point, we know unequivocally that all cigarettes – legal or otherwise – will eventually kill you if used “as prescribed” by the manufacturer.

Second, although many governments believe it’s convenient and useful to work with the tobacco industry on illicit trade, governments should be very wary because the tobacco industry will do what’s best for the tobacco industry, not necessarily what is best for public health. For example, at least one tobacco company has developed a so-called “track and trace” systems to ensure the legal supply chain of tobacco products, but it is best to keep the industry at arm’s length and implement an independent program, such as the one that Kenya is now using to fight the illicit cigarette trade successfully. In the European Union, a new study co-authored by American Cancer Society researcher and Tobacco Atlas contributing author, Michal Stoklosa, shows that since signing agreements with several major tobacco companies about illicit trade that financial losses have not been recovered nearly as well as they expected. Additionally, these agreements have effectively served to secure the tobacco industry’s political presence in Europe, thereby threatening progress in helping people quit tobacco or avoiding it in the first place.

The existence of illicit trade should never distract us from the critical job of implementing strong tobacco control policies and saving lives. Moreover, we’ve seen that it’s possible for governments to create effective tobacco control policies and save lives, even in the presence of illicit trade.

We invite you to visit the rest of our website, tobaccoatlas.org, to learn more not only about the illicit trade in tobacco products, but more importantly about the steps that must be taken to fight the tobacco epidemic and create a tobacco-free world with less cancer and other diseases.


This post was drafted by Jeffrey Drope with contributions from Alex Liber, Elizabeth Mendes, and Michal Stoklosa.

The original version of this post is available at cancer.org.

The illicit cigarette trade is growing… Or is it?

The tobacco industry uses a little “sleight of hand” to misrepresent trends in illicit tobacco trade to serve their narrative of an existing or looming problem. In most cases, their claims articulate a half-truth at best. For example, Japan Tobacco International recently claimed that “the illegal tobacco trade in Ireland has grown” and that the trends “have shown a consistent gradual increase” from 2011 to 2013. To make their point, the company used illicit cigarette market share rather than the absolute number of illicit cigarettes smoked.
Relying on the illicit market share measure misrepresented actual trends in illicit cigarette consumption: while, according to the industry study, in absolute terms the illicit cigarette consumption in Ireland was in decline, the illicit market share increased, because legal cigarette consumption declined faster than the consumption of illicit cigarettes.

Similarly, in Guatemala there is a recent flat-to-downward trend in the absolute number of illicit cigarettes smoked, but the market share grew because overall consumption declined markedly.

In sum, we must track tobacco industry claims about illicit trade in cigarettes very closely and must counter their false narratives with an accurate portrayal of reality, particularly when they misrepresent the data to promote the idea that illicit trade is a result of successful tobacco control.

Resources

Methods

We present figures for Ireland and Guatemala to show a pattern rather than to report the precise number of legal and illegal cigarettes consumed. The Ireland figure is based on data from the European Commission (2015) and Japan Tobacco International (2014), so we caution that the data generated by the industry might not be accurate. It is important to note that the illicit cigarettes in the Ireland figure include contraband, counterfeit, illegal whites, duty free, and cross-border purchasing. The Guatemala figure uses data from Euromonitor International, which might also have some reliability issues.

Sources

Stoklosa M. Is the Illicit Cigarette Market Really Growing? The Tobacco Industry’s Misleading Math Trick. Tobacco Control. ePub May 2015. doi:10.1136/tobaccocontrol-2015-052398.

Japan Tobacco International (2014) The Illicit Tobacco Trade Review 2013.

European Commission (2015) Taxation and Customs Union. Releases for consumption of cigarettes and fine cut tobacco.

Euromonitor International. Passport Database. London, UK, 2015.

EU Illicit Cigarette Trade Agreements With Tobacco Industry Have Failed

The tobacco industry’s lawyers have largely outsmarted the EU governments.

Agreements with the industry, originally intended to address the illicit cigarette trade problem in Europe, have instead primarily served the tobacco industry by effectively securing their strong political presence in Europe, thereby threatening progress in tobacco control.

In the 2000s, tobacco companies were accused of facilitating illicit cigarette trade to Europe. To address this problem, the European Union (EU) signed agreements with the four major transnational tobacco companies to deter them from further involvement in the illicit cigarette trade. Within those agreements, the companies agreed to make payments equivalent to all evaded taxes in the event of any large seizures of their genuine products. These payments were intended to serve as a penalty to the industry for failing to control their supply of cigarettes to the illegal market.

The agreements, however, have not worked as intended. Because customs officials rely on the industry to determine whether cigarettes are counterfeit (not eligible for seizure-based payments) or genuine (eligible for the payments); not surprisingly, perhaps, in most cases of large seizures, the industry has simply claimed that the seized cigarettes are counterfeit.

Despite the failure of the agreements, negotiations to explore a possible extension for one of them are currently underway. The EU must take immediate steps either to end the agreements or to ensure accurate independent verification of whether a seizure is counterfeit product.

Almost All Illicit Cigarettes Began Legally Somewhere Else

Global Illicit Trade Makeup According to Philip Morris International

Note: figures are in Billions of Sticks for 2013

The tobacco industry narrative around illicit trade issues makes it seem as if illicitly traded cigarettes materialize out of thin air or that counterfeiting gangs are responsible for making all of them.

This, however, is not the case. In the actual figures that they present to their investors, Philip Morris International (PMI) asserts that out of the claimed 3 trillion cigarettes sold outside of China in 2013, only 339 billion of those were internationally-traded illicit cigarettes, and a paltry 0.22% of the total global cigarette market (just 7 billion sticks) was made by illegal counterfeiters.

Resources

Methods

Illicit trade volumes and legal consumption are from PMI and do not include data on China’s cigarette market. There is no reliable source for similar data for China’s market. Note, too, that the Tobacco Atlas does not use these illicit trade volumes anywhere else in the publication beyond this figure and the Atlas authors do not endorse the accuracy of these estimates.

Sources

Andre Calantzopoulos. PMI Investor Day. CEO Remarks. June 24, 2014. Slides.

Frederic de Wilde. PMI Investor Day. Marketing & Sales. June 24, 2014. Slides.

Historical Revisionism of Illicit Trade Data

The Fourth Edition of The Tobacco Atlas showed a global map of illicit trade estimates produced by academic and commercial sources. While these data were the best available at the time and help us in some ways to understand the broader context, the authors of the Fifth Edition of The Tobacco Atlas also determined that many of the commercial estimates were unreliable and fluctuated without sufficient explanation from year to year.

For example, as we see in this figure for South Africa, the commercial market research firm, Euromonitor International, has substantially and retroactively revised its oft-used illicit cigarette trade estimates (as it has done for other countries, too). Accordingly, we strongly encourage researchers around the world to use rigorous, transparent and replicable methods to estimate illicit cigarette trade volumes in their home countries, like the “Gap Method” developed by American Cancer Society researcher Evan Blecher (2010), if they wish to reference specific illicit trade volumes.

The lack of reliable and consistently calculated, cross-country data for illicit trade flows generates sufficient doubt for us to exclude such data almost entirely from the Fifth Edition of The Tobacco Atlas.

Resources

Methods

Euromonitor figures are the volume of illicit cigarettes as a percent of the total cigarette market in South Africa. Credit goes to Evan Blecher for developing and updating the estimates of illicit trade volume using the gap method in South Africa.

Sources

Blecher, E., Liber, A., Ross, H., & Birckmayer, J. Euromonitor data on the illicit trade in cigarettes. Tobacco control, 2015;24:100-101. doi:10.1136/tobaccocontrol-2013-051034.
Blecher, E. A mountain or a molehill: is the illicit trade in cigarettes undermining tobacco control policy in South Africa?. Trends in Organized Crime, 2010;13:299-315.

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Illicit Cigarette Trade

Governments should not heed tobacco industry threats of rising illicit trade as an excuse to postpone or avoid implementing strong tobacco control measures, but should take active measures to fight illicit trade, such as employing comprehensive track-and-trace systems.

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