Issue link: https://read.dmtmag.com/i/797484
44 tobaccoasia / Issue 1, 2017 March / April By Thomas Schmid Countering the Counterfeiters As counterfeiters of brand cigarettes are becoming increasingly skilled in perfecting the art of emulating cigarette packaging, TOBACCO ASIA explores what tobacco companies can do to stem the tide and how packaging manufacturers assist them. The illicit tobacco trade is a significant concern not just for brand owners but also for society, con- sumers, and governments worldwide. Many coun- tries around the world are seeing alarming growth rates in the black market for cigarettes, a devel- opment which poses a potential threat to national security by providing a major source of illegal in- come for organized crime and terrorist organiza- tion, according to a discussion paper published by the European Union in 2016. The United Nations Security Council likewise has noted the link between cigarette smuggling and terrorism financing in its UNSC resolution no. 2199 on Syria, dated February 15, 2015. De- pending on the sources, an estimated 10-12% of the global cigarette market is illicit. That amounts to a staggering 600-650 billion sticks, representing annual losses in government revenues of an esti- mated US$40-50 billion. Yet other sources put the figure even as high as 17-20% globally. The illicit cigarette trade is made up of vari- ous distinct product categories: Contraband ciga- rettes, which are genuine products smuggled and sold illegally; under-declared products, which are cigarettes that are manufactured and distributed in the same country, but are not declared to the domestic tax authorities; illicit whites, which are obscure, unknown brands typically sold without a legal distribution network; and last but not least; counterfeit cigarettes, which essentially are copies of genuine products. How counterfeits fit into the equation When it comes to counterfeit cigarettes, it is not only about lost revenues, damaging brand values, and misleading consumers. Counterfeit cigarettes are produced outside of any regulatory environ- ment, they more often than not may contain low quality ingredients, unusually high levels of tar and nicotine and, in some cases even dangerous sub- Workshop for the manufacture of illicit cigarettes