Current and Future Environment
The true cost of illegal cigarettes and other illegal tobacco products
#Illegaltobacco
When you’re offered a cheap packet of illegal cigarettes or hand-rolling tobacco, it may seem like nothing more than an easy way to save a bit of money. But that one transaction is actually part of a vast global problem that causes far more damage than you may realize…
Illegal tobacco products, which include cigarettes, rolling tobacco, water pipe tobacco and snus, are those which have been illegally produced, smuggled across borders, or have not had the proper taxes applied.
The scale of the illegal tobacco trade cannot be underestimated – if taken together as a whole it would be the equivalent of the third-biggest tobacco manufacturer in the world.
That means roughly 11% of all cigarettes sold and consumed are illegal, therefore failing to meet the high standards that their genuine, legally purchased counterparts do.
It’s therefore crucial that we all take a stand against those behind the illegal tobacco trade, and work together, towards eradicating the problem as comprehensively as possible.
A few illegal cigarettes… where’s the harm in that?
THE PROBLEM IS REAL... AND GROWING
The truth is that criminal gangs all over the world are exploiting the low risk, high profit draw of illegal cigarettes. It is now one of the most smuggled illegal products in the world.
11.6
%
of cigarettes smoked today are illegal
570
bn
illegal cigarettes are smoked each year, based on OECD figures
The consequences of illegal tobacco are wide-reaching
Illegal tobacco doesn’t just harm legitimate businesses – it harms communities, governments and consumers all over the world.
We play our part in fighting illegal tobacco trade because it damages our business but criminal gangs peddling unregulated products has even more damaging consequences for communities.
What’s more, while innocent people suffer from the trade of illegal cigarettes and other illegal tobacco products, criminal gangs prosper. Their profits fund international criminal operations: money laundering, corruption; even terrorism.
ILLEGAL TOBACCO HELPS ORGANIZED CRIME INFILTRATE LOCAL COMMUNITIES
It’s tempting to think of the person in your neighborhood selling cheap illegal cigarettes as just a friendly local. Someone trying to make a living while also saving you a bit of money. In most cases though, the web of criminality that they’re tangled up in means this could not be further from the truth.
In February 2020 an enforcement operation conducted in Spain by the Spanish Civil Guard (Guardia Civil), supported by EUROPOL with the involvement of several Law Enforcement Authorities from EU and UK, resulted in the seizure of:
1
st
underground illegal cigarettes factory in the EU
+
3
m
counterfeit cigarettes
20
kg
of hashish
144
kg
of marijuana
3
weapons
Workers, locked up four meters underground were forced to work in extremely dangerous and toxic conditions. They were not allowed to leave the facility on their own, and no emergency security was in place.
Source: EUROPOL
In March 2021, an enforcement operation conducted by Russian Law Enforcements resulted in the seizure of:
1
illegal cigarette factory in Krasnodar area
10
tons
of raw tobacco used in the illegal production
7.3
m
counterfeit cigarettes
428,000
cigarette pack blanks
5,000
cigarettes per minutes (estimated capacity of machineries seized)
180
cigarettes packs per minute (estimated capacity of machineries seized)
Sources: Customs.gov.ru, Kommersant.ru
What makes illegal cigarettes so attractive to criminals?
The punishments handed out for selling illegal cigarettes and other illegal tobacco products are often light, especially compared to other illegal activities. It is also often judged to be a low-priority, ‘victimless’ crime and therefore policed far less effectively - making it a low-risk, high value way for criminals to raise funds.
The cost of producing counterfeit cigarettes is very low, with factories in parts of Europe, Middle East, Asia and around the world able to churn them out for just a few cents each. The customer mark-up makes them incredibly profitable for criminal groups who of course are also paying no government taxes. One smuggled container of counterfeit cigarettes into Europe can make anywhere between $3 to $5 million dollars.
Because regulations increasingly prohibit shops from displaying tobacco on shelves and increasingly impose uniform packaging on brands, it’s also much easier to pass off counterfeit cigarettes and other illegal tobacco products as ‘real’ - compared to, say, a fake designer handbag.
Who Loses?
Taxpayers and governments lose vital revenues
Every year taxpayers lose around $40 billion of revenue around the world, as a result of the trade in illegal cigarettes and other illegal tobacco products.
Consumers have no guarantee of what they are smoking
Without quality controls and regulations, cheaply produced illegal cigarettes contain all kinds of contaminants like dirt, rat droppings, lead and cadmium.
Illegal cigarettes get into the hands of children much more easily
Criminals don’t care what they sell, but they also don’t care who they sell to. They often target young people on purpose.
Who benefits?
We’re sometimes accused of exaggerating the consequences of illegal cigarettes and other illegal tobacco products, but countless governments and public bodies agree with us: the illegal tobacco trade is a serious global problem with global repercussions, directly linked to terrorism and organized crime including human trafficking.
ILLEGAL CIGARETTE SMUGGLING IS NOT A LIGHT MISDEMEANOR. WE ARE SPEAKING OF SERIOUS ORGANIZED CRIME. WE ARE SPEAKING ABOUT GANGS THAT OPERATE SMUGGLING ON AN INDUSTRIAL SCALE. WE ARE SPEAKING ABOUT DANGEROUS CRIMINALS WHO FINANCE OTHER ILLEGAL ACTIVITIES THROUGH THE REVENUE THEY MAKE FROM ILLEGAL CIGARETTE SMUGGLING
Tackling a new era of illegal tobacco trade
The digital age has given rise to new, often poorly regulated ways to buy and sell goods. Social media and auction sites are exploited by the criminals and terrorists peddling illegal tobacco products in ways that impact the ‘real world’ more than you may realize…
Read more on our fight against illegal tobacco trade during COVID-19
Just because they’re in your feed doesn’t mean they’re your ‘friends’…
It used to be that the selling of illegal cigarettes and other illegal tobacco products was restricted to street corners or the backroom of a dimly lit bar. The internet, though, offers near limitless real estate for criminals to establish their tobacco-trading enterprises. From social media marketplaces to auction sites and hurriedly-registered domains… the online ‘shopfronts’ for illegal tobacco are constantly changing.
Since 2015, we’ve been systematically removing large numbers of these online threats. The scale of the problem is a daunting one, but one that our people attack with a combination of crime-tackling experience, cutting-edge technology and commitment to the cause.
In numbers: the fight against illegal tobacco sold online
24,500
illegal tobacco websites taken down as a result of our online investigations
3.2
bn
illegal cigarette sticks seized as a result of our online investigations in 2020
How better regulation can help counter crime and terrorism
In their quest to impose arbitrarily extreme regulation on the sale of tobacco products, many countries are creating far more problems than they’re supposedly solving…
For example, the introduction of ever-steeper tax increases has criminal gangs rubbing their hands with glee – consumers who are suddenly priced out of the legitimate market are driven towards the cheaper illegal tobacco options available on the black market.
Meanwhile, the misguided move towards display bans in shops and ‘plain packaging’ in some countries (despite no evidence of it achieving the stated health goals) is making it easier than it’s ever been for criminals to produce dangerous counterfeit products. Where once they had to recreate varied and complicated branded packaging, they now need little more than a template with one font and one color.
For these (and many other reasons) it’s clear to us that extreme regulation isn’t working – that’s why we champion a partnership approach. We think it’s important that the tobacco industry is regulated, but not in counter-productive ways that further expose communities to criminal and terrorist threats.
How you can help counter crime and terrorism
Put simply: don’t buy illegal tobacco products and put your money in the hands of organized criminal groups!
With the rise of auction sites and social media marketplaces it’s easier than ever before to find a ‘good price’ for almost anything. But a packet of illegal cigarettes or pouch of illegal tobacco costs far more than the notes and coins that you hand over in the moment. Don’t become an unwitting enabler of criminal organizations and terrorist groups.