Between 2012-2013, HM Revenue and Customs in the United Kingdom seized a estimated 1.27 billion cigarettes from the black market. Working with its foreign partners, it also seized 56 tonnes of contraband tobacco in foreign countries during the time period.
From 2011 to 2013, HMRC has seized nearly 3.6 billion contraband cigarettes and 1,050 tonnes of rolling tobacco from the black market.
Back in 2010-2011, HMRC reported that taxes were not paid on 9 percent of all cigarettes and 38 percent of hand-rolling tobacco sold in the country. The losses in tax revenue in 2010-2011 was $2.9 Billion (£1.9 Billion).
Source: “HM Revenue and Customs ‘missing cigarette smuggling targets’,” BBC News, June 5, 2013.
The smuggling and sales of counterfeit goods in 7 major industries in India leads to a tax loss of $4.5 Billion (261 Billion Indian Rupees) to the government, according to a study by Ficci Cascade (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy).
The seven industries that were covered in the study included counterfeit auto parts, counterfeit tobacco and alcohol, and fake electronics.
Source: “Smuggling, tax evasion cost `26k cr,” Statesman, June 5, 2013.
Law enforcement officials in New York City stated that a single cigarette that is sold within jails on Rikers Island costs $30. The price to purchase the entire pack of 20 cigarettes costs $200.
In the streets of NYC, a single cigarette is sold on the black market for $0.50, and a pack of cigarettes is sold in retail stores for $15.
According to the Bronx District Attorney, between January 2012 to April 2013 there have been 85 arrests of tobacco smugglers attempting to bring in contraband cigarettes into city jails. In the first four months of 2013, police have arrested 20 people for cigarette smuggling.
Source: Reuven Blau, “Cigarette bans at city jails fuel $200-a-pack black market, surge in arrests,” New York Daily News, May 5, 2013.
In Northern Mali, a cigarette smuggler is paid $200 (100,000- CFA Francs) for a single trip transporting tobacco across the Sahara Desert. If the same smuggler is transporting cocaine, then the smuggler would be paid $2,000.
The United Nations Office on Drugs and Crime estimates that up to 18 tonnes of cocaine is smuggled through West Africa on its way to Europe. The cocaine has a street value of $1.25 Billion.
(See the price of cocaine per gram worldwide.)
Source: Afua Hirsch, “Cocaine flows through Sahara as al-Qaida cashes in on lawlessness,” Guardian, May 2, 2013.
A survey conducted by KPMG found that an estimated 65.5 billion illegal cigarettes are sold in the European Union each year. EU member states lose an estimated $16.3 Billion (€12.5 Billion) in total tax revenue due to the illicit trade.
In Germany, one in five cigarettes smoked does not get taxed.
Source: ”German tobacco sales decrease as smuggling is up,” Deutsche Welle, April 22, 2013.
Smugglers from North Korea are smuggling boxes full cigarettes into China and earning up to $8 per box. Each box consists of 500 cigarettes produced in North Korea. One smuggler told a reporter that he is able to make up to $8 per box when sold illegally on the black market in China.
China has over 300 million smokers and consumers one-third of all cigarettes worldwide.
In North Korea, a pack of cigarettes costs about $0.50 (3,500 North Korean Won) on the black market. Popular brands of tobacco in the country are Gohyang, Craven, and Yeomyeong.
Source: Sung Hui Moon, “North Korean Smugglers Cash in as More Chinese Light Up,” Radio Free Asia, April 3, 2013.
23.5 Billion illegal cigarettes were smoked in Pakistan in 2012. Illegal tobacco consists of cigarettes that avoided tax payments, were smuggled into the country, or were counterfeits.
Tobacco taxes in Pakistan make up 68.5 to 81 percent of the retail price of a pack of cigarettes.
Source: Javed Mirza, “Illicit cigarette trade to cost Rs100 billion to exchequer,” The News (Pakistan), March 19, 2013.
According to government officials in Ireland, the average price a legitimate pack of cigarettes sold in retail stores is $12 (€9.20).
Criminal gangs purchase counterfeit packs for as little as $0.26 (€0.20), and then sell the packs on the black market for $5.87 (€4.50).
In 2011, an estimated 770 million illegal cigarettes were smoked in Ireland.
Source: Fiona O’shea, “Black market cigarette trade on the increase,” Independent (Ireland), March 17, 2013.
The State of New Jersey in the United States loses an estimated $500 Million a year in tax revenue due to cigarette smuggling.
40 percent of all cigarette packs in the state is sold illegally on the black market without the payment of taxes.
Smuggling gangs are able make a $4 profit for each pack sold.
Source: Matt Sugam, “Cigarette Smuggling Costing New Jersey,” NewJerseyNewsroom.com, March 5, 2013.
In 2012, there was increase of 10 percent in the number of illicit or counterfeit cigarettes that were smuggled into the United Kingdom, according to a survey commissioned by tobacco companies.
The city of London had the highest amount of contraband cigarettes with 35 percent of the market being fakes or smuggled cigarettes.
In total, the United Kingdom Government losses up to $5.4 Billion in tobacco tax revenue each year due to smuggling activities.
Source: Justin Davenport, “Third of cigarettes are illicit as smuggling is new ‘crime of choice’,” London Evening Standard, March 4, 2013.