Lawmakers across the developed world seem to be united behind the idea that the best long-term approach to reducing levels of smoking is to keep on hiking the price of tobacco products until consumers can no longer afford them. Earlier this week, CBC News reported that an internal Health Canada study recommended that Ottawa should significantly increase the price of cigarettes if it wants to meet its target of reducing smoking levels to 5% of the Canadian population. In the UK, British Chancellor Philip Hammond yesterday used his Budget speech to announce that the price of a packet of cigarettes in Britain will continue to rise at 2% over the rate of inflation. The Australian government intends to take the price rise strategy to extreme lengths by increasing the cost of a packet of cigarettes to A$40 ($30.33) by 2020. But while numerous studies have shown that making tobacco products more expensive does reduce levels of smoking, there is evidence to suggest that increasing the cost beyond a certain point may have more negative effects than positive.
A report published at the beginning of November by the Washington DC-based Tax Foundation think tank revealed that New York, which levies the highest rate of state cigarette taxation in the US, is the country’s capital of illicit tobacco. The Tax Foundation estimates that in 2015, the latest year for which data is available, 56.8% of all cigarettes smoked in New York were smuggled into the state. New York City Mayor Bill de Blasio announced he would like to see tobacco taxation rise still further in the state, suggesting that cigarette tax should increase by $2.50, bringing the minimum price for a packet of smokes up to $13. This would make cigarettes purchased in New York three times more expensive than those bought in North Dakota, making interstate tobacco smuggling even more attractive to organised criminals. In Europe, 9% of all cigarettes smoked were fake or smuggled last year, representing an overall tax loss to European governments of as much as €10.2 billion ($12.16 billion), according to a study from KPMG. The report noted that this made illicit tobacco one of the largest major players in the European cigarette market last year. In May, a separate KPMG report revealed that the Australian government lost A$1.61 billion last year as a result of tobacco smuggling, and that 13.9% of tobacco products consumed in the country were illicit
Put simply, repeatedly raising the price of tobacco products both increases the profits organised criminals can make from the illicit cigarette trade, and makes it more likely that those who are determined to continue to smoke will seek out cheaper ways of doing so, be they legal or not. The fact that cigarette prices in many western countries are going up at such a fast pace makes it inevitable that the illicit tobacco trade will continue to grow, losing governments billions of dollars’ worth of lost tax revenues, and lining the pockets of organised criminal gangs and terror groups. In countries such as the UK and Australia, and in certain US states, the point at which the positive effects of repeatedly hiking the cost of tobacco products continue to outweigh the negative seems to have passed. While the World Health Organisation has said that increasing the price of tobacco is one of the cheapest and most effective ways of reducing smoking, the wisdom of piling taxation onto cigarettes sold in the developed world is looking increasingly shaky as prices continue to go up and up. If anything, prices need to go up in low to middle-income countries, which are home to 80% of the world’s smokers.
As tobacco prices continue to rise in developed countries, more organised criminals will be drawn to the illicit cigarette trade, which is becoming all the more attractive to smugglers as potential profits soar; not least due to the fact that illicit tobacco is much less risky than drug dealing or people trafficking. The fact that profits from cigarette smuggling are known to fund terrorist groups such as Daesh, Hezbollah and al-Qa’ida makes the policy of continually fuelling the trade by whacking up prices in the developed world look increasingly questionable. As well as creating business opportunities for criminals and terrorists, high cigarette prices are also resulting in the loss of huge amounts of tax that could be spent on public health initiatives and research into smoking-related illnesses.
Increasing tobacco prices has played a major part in cutting smoking rates in many countries across the world, but the time has come to recognise that continually hitting tobacco enthusiasts in the pocket will not eradicate the habit. Putting the libertarian argument that people should be allowed to smoke themselves into an early grave if they so wish to one side, the time has come for policy makers to accept that putting up the price of tobacco again and again has serious consequences that have for some time now outweighed the benefits of doing so. In developed countries at least, governments that want to reduce smoking rates must come up with new ways to persuade smokers to stub out the habit for good.
Organised crime police in Australia seize 1.5 tonnes of smuggled tobacco worth A$1.5 million
Police in Australia discovered a 1.5-tonne consignment of illicit tobacco estimated to be worth A$1.5 million ($1.01 million) in Sydney’s south west earlier this week, according to a statement from New South Wales Police.
Officers from the force’s Strike Force Raptor, which is dedicated to targeting organised criminal activity connected with the country’s motorcycle gangs, found the huge haul after conducting a raid on an industrial unit in the Fairfield district of the city on Tuesday.
Detectives searching the premises after executing a warrant came across 73 boxes that were found to contain loose tobacco weighing almost 1.5 tonnes.
Police said the tobacco was impounded and taken away for further analysis, adding that no arrests had been made in connection with the shipment.
In May of last year, authorities in Australia launched a crackdown on the sale of illicit tobacco that the country’s government said it hoped would raise some A$3.6 billion over a four-year period.
Finance Minister Mathias Cormann said at the time that the initiative would see the government take action to prevent the sale of the 864 tonnes of illicit tobacco that was estimated to make it past the country’s customs agencies every year.
Kelly O’Dwyer, who was the nation’s Minister for Revenue and Financial Services at the time, said: “These measures will shut down the avenues that organised crime syndicates have to access illicit tobacco to fund criminal activity.”
Just months later, officers from Australian Border Force announced that they had arrested a man in connection with the discovery of a record haul of 9.5 million smuggled cigarettes, which were found concealed inside a container in a port city of Fremantle in Western Australia.
The illicit cigarettes, which were thought to have been made in Southeast Asia, would have cost the Australian treasury A$7.66 million in evaded duty had they made it onto the country’s black market.
Earlier this month, the Australian Criminal Intelligence Commission (ACIC) released a report that revealed law enforcement agencies across the country confiscated 30.6 tonnes of illicit drugs last year, noting that methamphetamine remained one of the most consumed and seized illicit drugs in the nation.
Michael Phelan, ACIC CEO, commented: “The estimated street value of the weight of amphetamines, MDMA, cocaine and heroin seized nationally in 2017–18 is nearly $5 billion, underlining the size of the black economy that relates to illicit drugs alone.”
The seventh National Wastewater Drug Monitoring Programme report, which was released in June by the ACIC, found that Australians are now using twice as much methamphetamine as any other illegal drug.
Users can no longer trade alcohol and tobacco-related products on Facebook and Instagram
Facebook has banned the trading of alcohol and tobacco-related products between users.
A new policy introduced by the company bans all private sales, trades, transfers and gifting of alcohol and tobacco on Facebook and Instagram.
The company said the new policy will be policed by a combination of artificial intelligence, manual checks carried out by humans and reports submitted by users.
In addition, Facebook said that brands which post content related to the sale or trading of alcohol or tobacco-related products, including electronic cigarettes, will now need to make sure that this type of content can only be seen by users aged 18 and over.
According to a report from CNN, Facebook said that while it is working to inform group administrators of the new rules, content or pages that breach them could be taken down.
The new policy will not apply to general content that feature alcohol or tobacco-related products that are not posted in order to sell them to other users.
This will mean that “influencers” who are paid by companies to include products in social media posts will still be able to be pictured posing with alcoholic drinks and tobacco-related products, and will not be forced to age restrict such content.
Many businesses are able to get around strict advertising bans on alcohol and tobacco-related products in some countries by paying influencers to be pictured with the items they sell.
“We are updating our regulated goods policy to prohibit the sale of alcohol and tobacco products between private individuals on Facebook and Instagram,” the social media giant said in a statement.
“Our commerce policies already prohibit the sale of tobacco or alcohol in places like Marketplace but we’re now extending this to organic content.”
Facebook is regularly the subject of criticism over how its platforms can be used for the trading of illicit products and the facilitation of other illegal activity.
Earlier this year, a report from the Athar Project revealed that Islamist terrorist organisations are using Facebook Groups to trade looted antiquities stolen from war zones such as Syria, Libya and Yemen.
In October of last year, a woman from Texas claimed she was raped, beaten and sold into the sex trade at the age of 15 after meeting a trafficker online who posed as a Facebook “friend”.
Counterfeit and smuggled cigarettes cost EU member states €10 billion in lost tax revenue last year
The EU illicit trade in black market cigarettes cost member state governments a total of €10 billion ($11.23 billion) in lost tax revenues in 2018, according to a new report from professional services firm KPMG.
That figure was up €369 million on 2017, despite the total number of counterfeit and smuggled cigarettes consumed in EU nations falling 1.1 billion to 43.6 billion.
Commissioned by US tobacco giant Philip Morris International, the independent study revealed that the EU market for smuggled and counterfeit traditional smoking products was equivalent in size to total legal cigarette sales in the United Kingdom, Austria and Denmark combined last year.
In total, counterfeit and smuggled cigarettes in the EU were estimated to account for 8.6% of all consumption across the 28-nation bloc in 2018.
KPMG found that while the circulation of smuggled, illicit whites and other illicit tobacco product volumes declined in 2018, counterfeit was the only category to show year-on-year volume growth.
The number of fake cigarettes in circulation across the EU rocketed by 33% to 5.5 billion in 2018, which was the highest level recorded since KPMG first conducted the study back in 2006.
Half of the nations included in the study witnessed an increase in the consumption of fake cigarettes last year, with the largest volumes being reported in Greece (1.5 billion) and the UK (0.9 billion).
Commenting on KPMG’s findings, Alvise Giustiniani, PMI Vice President of Illicit Trade Prevention, said: “Beyond damaging government revenues, harming legitimate businesses—including our own—and fuelling crime in local communities, the availability of cheap, unregulated cigarettes on the black market undermines efforts to reduce smoking prevalence and prevent youth from smoking.
“For PMI to have impact in our drive to unsmoke the world, we must sustain our combined efforts to eliminate illicit cigarette trade, while ensuring responsible access to better alternatives for the men and women who would otherwise continue to smoke.”
Last month, Europol announced that it had coordinated an operation involving law enforcement agencies from a number of EU members states that resulted in the break-up of a gang that is thought to have made some €680 million from cigarette trafficking and a range of other illegal activities.
The organised criminal network behind the conspiracy is said to have made the majority of its profits through the smuggling of cigarettes and drugs to the UK, before shipping cash to Poland, where it was laundered in currency exchange offices and invested in property in Spain and other countries.
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- EU Commissioner for Human Rights calls on member states to protect migrants from people smugglers
9 February 2018
9 February 2018
8 February 2018
28 November 2017
28 November 2017
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