The tobacco industry has argued that tobacco smuggling is caused by market forces, i.e., by the price differences between countries, which create an incentive to smuggle cigarettes from ‘cheaper’ to ‘more expensive’ countries, and so urged governments to solve the problem by reducing taxes to remove this differential, which will also, they say, restore revenue. Although such market forces have some effect, smuggling is in fact more prevalent in ‘cheaper’ countries, and reducing tax is not the solution. Where taxes have been reduced tobacco consumption has risen and revenue has fallen, with disastrous consequences for public health. The key to understanding cigarette smuggling is understanding the role of the tobacco industry. At the heart of cigarette smuggling is large scale fraud: container loads of cigarettes are exported, legally and duty unpaid, to countries where they have no market, and where they disappear into the contraband market. They are often smuggled back into the country of origin, where they are sold at a third to half price. It is therefore profitable because duty has been illegally evaded. The key to controlling cigarette smuggling is not lowering taxes, it is controlling the tobacco manufacturing industry and its exporting practices.
International Union Against Cancer (UICC/ECL), EU Liaison Office, Brussels, Belgium 2:
Department of Public Health Science, GuyÕs KingÕs and St ThomasÕ School of Medicine, University of London, London, UK
Publication date: March 1, 2003
More about this publication?
The International Journal of Tuberculosis and Lung Disease publishes articles on all aspects of lung health, including public health-related issues such as training programmes, cost-benefit analysis, legislation, epidemiology, intervention studies and health systems research. The IJTLD is dedicated to the continuing education of physicians and health personnel and the dissemination of information on tuberculosis and lung health world-wide.
Certain IJTLD articles are selected for translation into French, Spanish, Chinese or Russian. They are available on the Union website