Issue link: https://read.dmtmag.com/i/724263
70 tobaccoasia / Issue 4, 2016 September / October images courtesy of Burley Tobacco Growers Cooperative Association images courtesy of Burley Tobacco Growers Cooperative Association Black Sheep In theory, an unbroken and uncompromising T&T chain starting with the harvesting of tobacco leaves would constitute an ideal – or should we perhaps say idealistic? – situation. In practicality, though, certain marketing systems (such as free auctions, for exam- ple) present formidable challenges due to murky sup- ply chains involving individual unscrupulous traders and often enough also international crime syndicates who purchase their product from less than transpar- ent suppliers or even right from growers desperate to rid themselves of surplus undocumented stock. This fact not only creates and drives the hard-to-combat problem of illicit trade but also makes true global T&T a distant reality, at least for the time being. Dan King, head of leaf purchasing & agronomy at Imperial Tobacco, cautions: "We are driving continu- ous improvement in [our] supply chain transparency and sustainable tobacco program [to] ensure [that] each of our suppliers has a degree of traceability re- garding how tobacco travels from the farmers to the factories. But the criminals involved in the illicit trade don't adhere to any supplier standards and they can always source their requirements from less scrupu- lous suppliers." How severe the issue of illicit leaf re- ally is can be frequently gleaned from news reports. For example, in 2015 the Australian Border Force in collaboration with Indonesian Customs seized a staggering 71 tons of illicit leaf tobacco in three shipments destined for black market sale in the country. While two of the shipments were discovered after their arrival in Sydney, the third consignment was intercepted before it could leave Indonesia. Be- ing called a "historical record haul" by the Australian authorities, the shipments represented a total value of AU$40 million (US$30 mil.) and their illegal sale would have deprived Australia of AU$27 million in tax revenue. According to general manager Steve Pratt, the as- sociation "places high priority on traceability of the tobacco we purchase from our growers" and adds that BTGCA only purchases burley tobacco from certified growers utilizing good agricultural practices in order to provide worker safety, protect the environment, and to allow traceability from the farm to the consumer. But Pratt also concedes that illicit trade of burley does occur to some extent. "Our goal is to make sure we are not part of the problem," he says, because this might otherwise "encourage growers to overproduce, which allows untraceable tobacco to enter the system, which causes market oversupply and lowers the price." Illicit leaf – a billion dollar industry Pratt estimates that the illicit trade of all types of tobacco leaf accounts for approximately ten per cent of the total annual trade volume worldwide, representing a value that goes into the billions of US dollars. Outspoken and honest, he also read- ily admits that "the weakest point [in the supply chain] is the grower, who is trying to maintain a profitable operation", and that "growers will con- tinue to overproduce as long as there are dealers willing to purchase tobacco that does not require traceability and good agriculture practices." A blaming finger With these remarks Pratt clearly also points a blam- ing finger at shady traders and manufacturers (see side box "Black Sheep") who are unscrupulous and profit-greedy enough to buy up any amount of illicit tobacco they can lay their hands on and thus contribute to a burgeoning black market. "All companies should be required to offer traceability of their tobacco purchases and the tobacco industry should adopt worldwide stan- dards for traceability of all tobacco," he recom- Burley curing in a drying barn