Globally, illegal tobacco is a growing trade – some research indicates this account for 11.2% of global tobacco consumption.
The illegal tobacco market involves criminal gangs producing counterfeit cigarettes, cross-border smuggling and large-scale tax evasion. Read more about BAT’s view on illegal tobacco trade .
We see it as vitally important that governments establish workable tax regimes and economic policies that discourage illegal trade, with strong border controls and effective laws to combat the illegal black market in tobacco.
Tackling illegal trade requires co-operation and understanding between legitimate tobacco companies, governments and organisations such as the World Customs Organisation, World Trade Organisation World Health Organisation, and the European Union.
Globally, we have used our expertise and knowledge of the tobacco supply chain to help governments and law-enforcers fighting the illegal tobacco market for many years.
The illegal ‘chop-chop’ tobacco trade affects everyone in the New Zealand community.
Illegal tobacco is a significant and growing problem for governments, law enforcement authorities and health agencies overseas. Once it takes hold, it's difficult to control.
Illegal tobacco traders do not pay tax. But, most importantly, they provide the cheapest available cigarettes, often at less than half the legal price, and have no qualms selling them to minors.
Tobacco smuggling to evade taxes has grown rapidly since 2018 off a historically low base and is on an upwards trajectory. The incidence of interceptions of illegal cigarettes at the border has increased by 352 percent between 2015 and 2019. The amount of tobacco product involved in each interception is also increasing.
Unlike legal tobacco, illegal tobacco is not required to meet manufacturing standards or quality controls, is not subject to excise, and can be sold without health warnings or age verification.