regulation

Smoking Out Illicit Trade: How Some Policies Intended to Limit Smoking Drive Illegal Trade

FCTC has adopted a policy of encouraging developing nations to follow the demand reduction strategy of mature markets in raising taxes and introducing and then expanding regulation on tobacco products. In many cases such policies result in the rise of illicit tobacco (either counterfeits or legally produced smuggled cigarettes), especially where policy changes are implemented rapidly and enforcement capacity is limited. According to KPMG, illicit tobacco makes up roughly 10 percent of the global cigarette market, and the figure is rising.

Reacting to the spread of illicit tobacco, WHO established the Protocol to Eliminate Illicit Trade in Tobacco Products (ITP) under the FCTC in 2012. While sound in principle, the ITP faces numerous challenges in implementation.

Evidence is accumulating that the process is being taken over by those who seek not just to prevent widespread use of illicit tobacco but use of all forms of tobacco. An understandable distrust of the tobacco industry is in danger of leading to counterproductive policies.

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