Cigarette Smuggling

News, information and statistics about the illicit tobacco trade. Cigarette smuggling on the black market and other facts collected from tobacco companies, security agencies and other public information sources.

The trade in smuggled cigarettes is estimated to create a black market worth $1 Billion in North Africa. The United Nations Office on Drugs and Crime estimates  that Africans across the entire continent smoke 400 billion cigarettes a year. 60 billion cigarettes are believed to have been purchased on the black market.

The five Northern African countries of Algeria, Egypt, Libya, Morocco and Tunisia account for 44 percent of the region’s tobacco consumption, and the smuggling of cigarettes in those countries are much higher.

In Libya, over 75 percent of cigarettes smoked in the country was smuggled and bought on the black market.

Source:  Jamie Doward, “How cigarette smuggling fuels Africa’s Islamist violence,” Observer, January 26, 2013.

The State Minister for Finance estimates that up to $25 Million is lost in government tax revenue due to cigarette smuggling in the Bahamas.

Source: Neil Hartnell, “Tobacco Smuggling: Bill To Recover 80% Of Revenue Losses,” Tribune 242, January 24, 2013.

Around 9.7 million packs of cigarettes that were being smuggled were seized by police in Romania in 2012.

30 tobacco smuggling gangs were broken up and over 130 individual smugglers were caught in 2012. 268 stolen cars and vans that were being used in the smuggling was also seized.

Smugglers are able to purchase a pack of rolled cigarettes in Romania for half a Euro and sell it at a higher price in Ukraine and other Western Europe capitals.

Source:  Associated Press, “Romania Turns up Heat on Cigarette Smuggling,” ABC News, January 19, 2013.

Three out of every five cigarettes that are smoked in New York State were smuggled into the state, according to a study by the Mackinac Center for Public Policy. The rate of cigarette smuggling in New York was the highest in the country.

The state of New Hampshire had the most cigarettes that were smuggled out of state, with 26.8 percent of its tobacco being brought out of the state. The reason for the high rate of smuggling was due to the high rate of taxes for cigarettes in the states surrounding New Hampshire.

In 2010, it was estimated that the State of New York lost at least $1 Billion in tax revenue from cigarette smuggling.

Source:  Catherine Rampell, “Cigarette Taxes vs. Cigarette Smuggling,” New York Times, Economix Blog, January 10, 2013.

The Turkish Government losses $2.5 Billion (4.5 Billion Turkish Liras) in tax revenue each year due to cigarette smuggling activities, according to the Confederation of Turkish Craftsmen and Tradesmen.

Out of all cigarette packages smoked in the country, one out of every five packages are smuggled into the country. In the southeast region of Turkey, the smuggling rate increases to one in two cigarette packs.

Back in 2010, an estimated $1 Billion was lost to the illegal tobacco trade.

Source:  “Huge tax revenue lost in cigarette smuggling,” Hurriyet, January 8, 2013.

In 2012, criminal justice administrators in New Zealand handled 1,300 finds of tobacco and smoking equipment in the first half of the year, and 1,100 finds of smoking materials in the second half of the year.

Due to a smoking ban in prison enacted in July 2011, cigarettes within New Zealand’s prison system now has the same black market value as illegal drugs.

Source:  “Smoking ban and corruption linked in prisons,” Radio New Zealand, December 25, 2012.

The Bureau of Alcohol, Tobacco, Firearms and Explosives estimates that the federal, state and local governments lose a combined total of nearly $10 Billion a year in tax revenue due to the smuggling of cigarettes across state lines. Back in 2010, the estimated tobacco tax loss to the United States was $5 Billion a year.

In the State of Virginia, that tax on a pack of cigarettes is $0.30. In the State of New York, the tax rate is $4.35.

Smuggled cigarettes makes up to 40 percent of the entire cigarette market is made up of cigarettes smuggled in from other locations.

A smuggler can fill up a car with 600 cases of cigarettes, and can fit 12,000 cases into a large van.

 

Source:  “Cigarette-smuggling: The urge to smurf,” Economist, November 24, 2012.

The Bulgarian Customs Agency reported that the 15 percent of all cigarettes sold in Bulgaria in 2012 were sold on the black market as smuggled cigarettes. The number of cigarettes sold in the country that avoided taxes was down from 30 percent in 2010.

44 percent of the Bulgaria’s 7.4 million population smoke cigarettes.

Source:  AFP, “Contraband cigarettes smuggled in coffins in Bulgaria,” Google News, November 13, 2012.

The Tobacco Institute of Southern Africa stated that cigarette smuggling in South Africa causes up to $1.3 Billion (12 Billion South African Rand) in tax revenue losses.

People in South Africa will smoke up to 8 billion cigarettes that were sold on the black market. Smuggled cigarettes account for 30 percent of the entire tobacco market in the country.

Source:  “Smuggled cigarettes cost R12bn in taxes,” fin24, November 5, 2012.

A report by Phillip Morris International stated that sales of contraband cigarettes sold on the black market consists of 14.7 percent of all cigarettes sold in the Canadian Province of Quebec. In Ontario, the illegal cigarettes make up 27.2 percent of all tobacco sold.

Within the two provinces, authorities believe that there are up to 55 illicit cigarette factories that produce packs of cigarettes that are sold on Canada’s black market.

Source:  Tom Blackwell, “‘Surplus’ tobacco flooding the Canadian black market: RCMP,” National Post, November 4, 2012.