Illicit Cigarette Consumption Research Articles

The cigarette market in Brazil: new evidence on illicit practices from the 2019 National Health Survey

ObjectiveTo explore new evidence on illicit practices, such as selling legal brands below the minimum legal price (MLP), and smugglers selling illicit brands at or above the MLP.MethodsFor the first...

Trend of Smuggled Cigarette Consumption in Tehran in the Last Two Decades.

Illicit tobacco trade is focused on Iran as a main target in the WHO's eastern Mediterranean region. Serial studies of Cigarette Packs Survey with same method were conducted in Tehran between 2003 and 2015 to evaluate consumed smuggled cigarettes. This study as the fourth Cigarette Packs Survey is designed to indicate the trends of illicit cigarette trade in Tehran in the last two decades. A cross-sectional household study was carried out in early 2021 in Tehran on 3042 persons who smoked at least one daily cigarette for a year. The sampling method was like the sampling method used in three previous studies. Participants aged≥15 years were asked to reveal their current cigarette pack, which was either legal cigarettes (having governmental label); or illegal cigarettes (without governmental label). The subjects included 2536 males (83.4%) and the mean age was 39.9±12.1 years; 1854 subjects (60.9%) showed foreign cigarettes and 1188 (39.1%) showed domestic cigarettes; 2705 (88.9%) consumed legal cigarettes and 337 (11.1%) consumed illegal cigarettes. Consumption of illegal cigarettes by gender showed greater use of smuggled cigarettes in males (11.7%vs 8.1%). No significant differences were seen based on the marital and educational status in terms of illegal cigarettes prevalence. Compare with previous studies, the trend of consumption of illicit cigarettes was decreasing in past two decades. This could be due to new regulation on monitoring cigarette distribution and changing illegal brands to legal as joint production.

New evidence of illicit cigarette consumption and government revenue loss in Indonesia.

INTRODUCTIONIllicit cigarettes because of their affordability could increase smoking prevalence, especially among young people. They also cause a large revenue loss for the government. This study aims to estimate illicit cigarette consumption and government revenue loss in Indonesia, a country with a very high smoking prevalence, especially among males.METHODSWe estimated illicit cigarette trade in terms of volume and revenue loss. Illicit trade was estimated as the discrepancy between legal cigarette sales and domestic consumption recorded by national representative surveys. Data sources included Basic Health Research Survey, Global Adult Tobacco Survey, National Socioeconomic Survey, and data from Ministry of Finance.RESULTSWe found that illicit cigarette consumption fluctuated from 19 billion sticks in 2007 to 14 billion sticks in 2013, and sharply increased to 59 billion sticks in 2018. Relative to cigarette consumption, illicit cigarettes were the lowest at 5% in 2013 and highest at 19% of consumption in 2018 (assuming 0% underreporting). The estimated government revenue loss ranged from IDR 24.2 to 42.0 trillion (US$ 1668 to 2897 million), which corresponds to 15.8% to 27.5% of cigarette excise revenue in 2018.CONCLUSIONSIn Indonesia, illicit cigarette consumption was found to be high and increasing, which contributed to a large government revenue loss (almost onethird of tobacco excise tax revenue). To reduce illegal cigarette production and smuggling, the government should increase resources to enforce the regulation on the excise tax system including stronger penalties, especially related to illicit cigarette production.

Analysis of the illicit tobacco market in Georgia in response to fiscal and non-fiscal tobacco control measures

BackgroundGeorgian illicit cigarette consumption was 1.5% in 2017. In 2018, a new tobacco control law took effect followed by a substantial cigarette excise tax increase in 2019. Research shows these...

Cross-validation of four different survey methods used to estimate illicit cigarette consumption in Brazil

ObjectiveTo cross-validate estimates of the size of the illicit cigarette trade based on the results of four different survey methods.MethodsIn 2018/2019, four non-industry-funded, large-scale studies were conducted in selected Brazilian...

Illicit Tobacco in Lithuania: A Cross-Sectional Survey.

Taxation policies are the most cost-effective measure to reduce overall tobacco consumption. However, cigarettes in Lithuania are among the cheapest in the European Union. The threat of the illicit trade is often used to compromise evidence-based policies, pricing policies particularly. The aim of this study was to determine the extent of illicit cigarette consumption in Lithuania and identify the main characteristics of illicit cigarette smokers. The national cross-sectional survey with direct observation of the latest purchased pack of cigarettes was conducted between August and September 2019. In total, 1050 smokers aged ≥18 were interviewed face-to-face. The illicit share of the total consumption of cigarettes per year was 10.7% with 9.7% of smokers showing or describing illicit cigarette packs compared to 17% reported by industry-funded studies. Older smokers, smokers with lower education and heavy smokers were more likely to regularly purchase illicit cigarettes. The average price of an illicit pack was almost two times lower than licit. Although the illicit trade of tobacco products is a serious policy challenge, the threat of an increase in illicit trade should not delay tobacco taxation improvements.

Estimating illicit cigarette consumption using a tax-gap approach, India.

ObjectiveTo estimate the magnitude of illicit cigarette consumption in India using a tax-gap approach.MethodsIn the tax-gap analysis, illicit cigarette consumption in India was defined as the difference between total and legal consumption. Data on total cigarette consumption came from two national Global Adult Tobacco Surveys carried out from 2009 to 2010 and from 2016 to 2017. Legal consumption was derived from Government of India data on domestic cigarette production and trade.FindingsEstimated total cigarette consumption was 104.8 billion sticks in 2009 to 2010 and 94.2 billion sticks in 2016 to 2017, a decrease of 10.6 billion sticks, or of 10%, over the time period. Legal cigarette consumption fell from 99.4 to 88.5 billion sticks over the same period, a drop of 11%. Estimated illicit cigarette consumption was, therefore, 5.4 billion sticks in 2009 to 2010 and 5.6 billion sticks in 2016 to 2017, and accounted for 5.1% and 6.0% of the market in these periods, respectively. Consequently, only about 1 in 20 cigarettes consumed in India was illicit. Between 2016 and 2017, the estimated equivalent retail sales value of illicit cigarettes was 49 billion Indian rupees (753 million United States dollars, US$) and the estimated tax revenue foregone was 25 billion Indian rupees (US$ 390 million).ConclusionIllicit cigarette consumption is relatively modest in India by global standards. Nonetheless, India should strengthen its capacity to control the illicit tobacco market as part of a comprehensive tobacco control strategy, while also continuing to implement traditional demand reduction measures, such as tobacco taxation.

Explaining the Consumption of Illicit Cigarettes

What drives the consumption of illicit cigarettes? While criminology has rarely addressed the divers of the illicit cigarette markets from a theoretical and empirical perspective, studies from other disciplines point to two classes of causes. Some studies stress the impact of cigarette prices and taxes on the market for illicit cigarette; others emphasize the importance of different non-price factors, including informal economy and corruption. This study tests the influence of both price and non-price factors on the illicit cigarette market. Multilevel growth curve analysis—three-level MLM for longitudinal measures—of the illicit cigarette market at the subnational level in the European Union. The analysis focuses on 247 regions in the EU between 2007 and 2013. This study shows that both price and non-price factors influence illicit cigarette consumption. Lower affordability of legal products, proximity to sources of cheap cigarettes, higher national income inequality, greater population density, and the levels of illicit cigarettes in neighboring regions are associated with higher illicit consumption. On the contrary, there is no empirical evidence of the role of two ‘usual suspects’: corruption and shadow economy. The paper also shows that the market for illegal cigarettes is shaped by both demand and supply factors. The geographic concentration of illicit consumption and smuggling calls for the creation of anti-illicit-trade units in most densely populated areas or custom task forces at the most sensitive borders. The disproportionate relevance of illicit flows from eastern non-EU countries suggests to increase the political pressure on these source countries. Finally, given the importance of the demand side in determining the size of the illicit market, price increases should be matched with consumer awareness campaigns. These campaigns should focus on the societal consequences of purchasing illicit cigarettes together with illustrating the harm of consuming tobacco products.

Modeling the structure and dynamics of transnational illicit networks: an application to cigarette trafficking

Many illicit markets are transnational in nature: illicit products are consumed in a country different from the one in which they were produced. Therefore, reconstructing the trafficking network and estimating the size of cross-border illicit flows are crucial steps to gain better understanding of these crimes and to enforce actions aimed at countering them. In this respect, the present study outlines a methodology with which to map and size illicit flows and applies it in estimation of transnational cigarette trafficking flows. The proposed methodology traces each step in the paths followed by illicit cigarettes flowing from their origin to the final consumption country and then estimates the quantity of cigarettes moving between each pair of countries. It exploits data on consumption of illicit cigarettes in 57 countries located in Europe, the Middle East, Central Asia, and North Africa, together with data on seizure cases and geographical information for 158 countries worldwide. These data are combined by a function that assigns a likelihood value of illicit cigarettes being transported between any pair of countries. An algorithm is then implemented in order to identify the most likely paths from the origin to the destination country. By merging results for all the different combinations of origins and destinations, this study estimates the size of all cross-border illicit flows and reconstructs a dynamic transnational cigarette trafficking network for the period 2008–2017. The results highlight the multifaceted role of countries in the cigarette trafficking network, the emergence of identifiable cigarette trafficking routes, and the evolution over time of the structure of this transnational illicit network. Finally, the paper discusses how the methodology developed could be adapted to the study of other transnational crimes.

Tobacco excise tax increase and illicit cigarette consumption: evidence from Vietnam

BackgroundOne of the most significant barriers to tax reform and tax rate increases in Vietnam is the threat of illicit trade promulgated by the tobacco industry. The industry argues that...

Illicit Cigarette Consumption and Government Revenue Loss in Vietnam: Evidence from a Primary Data Approach.

This article provides the first comprehensive picture and independent estimates of both illicit cigarette consumption and the resulting government tax revenue loss in Vietnam using data from a representative survey of cigarette smokers in 12 Vietnamese provinces. The survey consisted of face-to-face interviews and on-site cigarette pack examinations. We find that more than 720 million illicit cigarette packs, or 20.7% of total cigarette consumption, circulated in Vietnam in 2012. Consequently, government tax revenue loss due to illicit trade ranged from US $223 to 295 million. Our estimates also indicate that (1) the most popular illicit brands were Jet and Hero, both were sold at higher prices than the average legal brand; (2) the average price of illicit cigarettes was 51% higher than the average price of legal cigarettes; and (3) majority of illicit cigarettes were sold at convenience stores, which were registered and licensed businesses. Our findings suggest that prices are not a driver of illicit cigarette consumption in Vietnam, and this illicit trade is at least partially a consequence of weak market control enforcement.

Illicit cigarette trade in Metropolitan Santiago de Chile

ObjectiveTo estimate with a rigorous statistical methodology and independent from the tobacco industry the prevalence and consumption of illicit cigarettes in Metropolitan Santiago de Chile, in addition to identifying the...

A simulation impact evaluation of a cigarette excise tax increase on licit and illicit cigarette consumption and tax revenue in 36 European countries.

To assess the impact of a simulated 10% tax-induced cigarette price increase on licit and illicit consumption and tax revenues in 36 European countries. Employing panel data for licit and illicit cigarette consumption, fixed effects regression models were applied for different income clusters. Total cigarette consumption dropped by about 3.1% as a result of the simulated tax-induced price increase. Annual illicit cigarette consumption increased by 1.52%, (95% confidence interval: 0.21, 2.83), while annual licit cigarette consumption decreased by 4.61% (95% confidence interval: -6.51, -2.72) in the observed 36 European countries. With total consumption decreasing by about 8%, the Czech Republic, Latvia, Lithuania, Poland and Slovakia were affected the most by the price hike. More specifically, licit consumption in these countries decreased by 18.43% (95% confidence interval: -19.91, -16.95) while illicit use increased by 10.99% (95% confidence interval: 6.01, 15.96). Moreover, the overall annual tobacco tax revenue increased by US$14.69 billion in the simulation. Results of the study suggest that European policy makers continue to implement tobacco taxation policies to control smoking prevalence and national health care expenditures. At the same time, efforts to kerb contraband activities along EU Eastern borders should be intensified.

Measuring illicit cigarette trade in Colombia.

By 2016, tobacco industry provided the only illicit trade estimates in Colombia and used these to discourage tax increases since the 1990s. To establish the viability of a threefold hike in the excise tax, policy makers needed unbiased estimates of the illicit cigarette. To estimate the size of illicit cigarette trade in five Colombian cities (63% of the market), analyse characteristics of smokers of illicit cigarettes and compare market share results with one industry-funded survey. Street cross-sectional survey with smokers' self-report on consumption pattern, last purchase information and direct observation of smoker's packs. Sampling frame: smokers, men and women, 12 years old or older, all income levels, resident in five Colombian cities (Bogotá, Medellín, Cali, Cartagena and Cúcuta) with 1 733 316 smokers in 2013. Sample size 1697, simple random sample by city, sampling weights based on age groups and cities. Confidence level 95%, margin of error 3.5% for Bogotá and Medellín and 5% for the other three cities. Data collection period: 24 August-14 September 2016. Illicit cigarettes represent 3.5% of consumption in the five cities, a much lower estimate than the industry data. There are significant differences across cities, with Bogotá at the bottom (1.5%) and Cúcuta at the top (22.8%). The low overall penetration of illicit cigarettes in Colombia indicates that the industry's warnings against tax increases are not justified. The limited importance of tax levels as determinant of consumption of illicit cigarettes is also suggested by the differences across cities, all of them with the same tax regime.

Consumption of illicit cigarettes in India: findings from a retail survey

Consumption of illicit cigarettes in India: findings from a retail survey

Increase in tobacco tax does not lead to increase in illicit cigarette consumption in Hong Kong: findings from a top-down approach against tobacco industry-funded results

3.2. Advances in protection from tobacco pollution, second- and third-hand smoke (EP-138-3)

The prevalence of illicit cigarette consumption and related factors in Vietnam: results from GATS 2015

The prevalence of illicit cigarette consumption and related factors in Vietnam: results from GATS 2015

Measuring illicit cigarette consumption with tobacco surveillance data: evidence from the Global Adult Tobacco Survey for Mexico

Measuring illicit cigarette consumption with tobacco surveillance data: evidence from the Global Adult Tobacco Survey for Mexico

Trends in Illicit Cigarette Use in Brazil Estimated From Legal Sales, 2012-2016.

To estimate the proportions of illicit cigarette consumption in Brazil from 2012 to 2016, a period of sharp increases in cigarette taxes. We used an approach based on legal sales provided by the Secretariat of Federal Revenues and self-reported consumption data from an annually conducted telephone survey (VIGITEL) to estimate the changes over time in illegal cigarette use in Brazil. For that purpose, we also used available information on the proportion of illegal cigarette consumption from a nationwide household survey conducted in 2013 to calculate a constant proportion of underreporting from VIGITEL in relation to total consumption and sales in Brazil. There was an increase in the estimated proportion of illicit cigarette use from 2012 to 2013 (from 28.6% to 32.3%), then a decrease from 2013 to 2014 (32.3% to 28.8%), and then a sustained trend of increase from 2014 to 2016 (28.8% to 42.8%). Novel and feasible approaches to estimate changes over time in the illegal market are important for helping the effective implementation of tobacco excise tax policy.

Did the tobacco industry inflate estimates of illicit cigarette consumption in Asia? An empirical analysis

ObjectiveEstimates of illicit cigarette consumption are limited and the data obtained from studies funded by the tobacco industry have a tendency to inflate them. This study aimed to validate an...