The Tobacco Reference Guide

by David Moyer, MD.


Chapter 31 Tobacco exports, imports and smuggling

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Tobacco exports, imports and smuggling: Smuggling

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An August 25, 1997 New York Times front page article was entitled "Cigarette

Makers are Seen as Aiding Rise in Smuggling. Tobacco Giants Deny Role in Illegal

Trade; Inquiries Show There May Be One." The estimated number of cigarettes

smuggled worldwide has increased from 100 billion in 1989 to 280 billion in 1995, or

28% of the one trillion cigarettes exported each year by all countries manufacturing

cigarettes. The manufacturers benefit because they receive the same price for

cigarettes even in contraband markets; the smuggling costs governments $16 billion a

year in lost tax revenue, and the cheaper cigarettes undermine initiatives to reduce

smoking. Companies commonly sell "huge quantities of top brands to traders and

dealers who are little more than pipelines to the smugglers." As well, industry

employees have at times had a significant role in stimulating the smuggling. Two

organized crime groups in Italy make $500 million a year by smuggling in Marlboro

cigarettes that they buy from Swiss dealers.

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The difference between global cigarette exports and imports increased from 137

billion in 1989 to 324 billion in 1994. Most of these "missing" cigarettes are

smuggled.

International Union Against Cancer, 1996

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"Smuggling helps the multinational companies because it creates a kind of illegal

introductory price for their brands - far below what the legal products are selling for.

This helps 'soften' the market up for a bigger sales assault... WHO estimates that

about one-third of the cigarettes produced in 1994 were moved from the legal market

into the smuggling economy - a 300% increase since 1989. Cigarette smuggling is

now thought to be costing governments some $16.2 billion annually."

World Watch, July-August 1997, p. 24

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