World Bank: Global Illegal Tobacco Trade Estimated at $50bn Annually, Global Counterfeit Trade to Reach $4trn by 2022

Ugo Aliogo and Stephanie Igben
The World Bank has decried the rising trend in global illegal tobacco trade stressing that the trade is estimated at $40 to 50 billion yearly.

This is just as the International Chamber of Commerce (ICC) predicts that global counterfeit trade would reach $4 trillion by 2022, primarily driven by e-commerce.
In the same vein, the United Nations Office on Drugs and Crime (UNODC) has warned that COVID-19 has created new opportunities for organized crime to profit.

Speaking during a webinar with the theme, “Anti-Illicit Trade and Getting to Net Zero: Sustainable Strategies to Stamp out Illegal Trade of Tobacco Product,”Senior Global Director, Anti-Illegal Trade, Japan Tobacco International (JTI) Ian Monteith, said criminals have and continued to take advantage of COVID with continental differences.

He also stated that they recognize that unemployment increased and purchasing power disposable income has reduced as a result of the impact of Covid-19 pandemic.

He disclosed that organized criminals are highly adaptable, creative, exploiting public anxiety and enriching themselves not just from tobacco, but other products such as PPE, alcohol and pharma even counterfeit COVID vaccines have been identified in Asia.

Monteith further explained that a JTI report noted that across the 30 European countries (EU, UK, Norway and Switzerland) 34.2 billion cigarettes smoked in 2020 were illegal, which represents 7.8 per cent of total cigarette consumption in the EU and the tax loss for governments c.€8.5 billion.

He remarked that from a KPMG survey, France is the European country with the highest illicit cigarette trade incidence – 32 per cent at the end of 2020, adding that South Africa showed Prohahition did not work, “more amazingly has been the growth of illegal manufacturing in the European Union (EU).”

He added: “So, COVID has not prevented criminals from profiting. It rather put a pressure on consumers purchasing power and push them to turn to illegal products. That’s why we need more coordinated approach and a combination of partnerships fighting the underlying causes as well consequences and symptoms. Without demand there is no supply. One important action is to educate consumers that with every illegal pack they buy they support criminal groups. Global community campaigns are required.

“Some consumers believe illegal tobacco is a victimless crime. We need to inform them of the broader social impact of buying illicit products from criminal groups. Many of these groups also traffic people and weapons, with far-reaching consequences for society.”
“Illegal trade impacts everyone: farmers, millions of retailers, and hundreds of thousands of suppliers to consumers. The loss of revenue to law-abiding people is significant, as is the impact on consumers lured into buying sub-standard products.

“Governments should take a holistic approach when tackling illegal trade. Excessive regulation and sudden and sharp tax increases incentivize illicit trade. Law enforcement is effective only if reasonable and balanced policies are in place. As governments seek to revitalize the economy, they should consider the possible pitfall of sharp tax hikes or additional taxation designed to change behaviors around lifestyle choices and the environment that drive down affordability, Monteith stated.
“Japan Tobacco International has been advocating for increased cooperation among countries’ intelligent agencies to stop illicit trade across borders, cooperation with enhanced intelligence sharing between law enforcement agencies (LEAs) needs to be supported by the private sectors, ”advised Monteith.

JTI, he added, has been in the forefront of global awareness campaign against illicit trade, partnering with relevant government agencies such as the Romanian Police and Directorate of Preventing and Countering Illegal Migration and Cross-Border Crime, the Nigerian Customs Service In Nigeria, and a host of others in the fight against illicit products, contrabands and smuggling activities.