Tobacco Asia

46 tobaccoasia / Issue 1, 2017 March / April Table 2: Total Consumption of Counterfeit Cigarettes in Asia-Pacific Country* million sticks % change 2012 2013 2014 2015 2014/15 Australia 83 203 8 44 +450.0 Hong Kong 210 156 84 57 -32.1 (S.A.R.) Indonesia 286 Not Not Not -- available available available Laos Not 20 21 3 -85.7 available Macau Not Not 10 1 -90.0 (S.A.R.) available available Myanmar Not 17 Not 6 -- available available Pakistan 3 43 43 22 -48.8 Philippines 218 1,850 709 1,369 +93.1 Singapore 1 Not 4 1 -75.0 available South Korea Not Not Not 28 -- available available available Thailand 244 252 68 207 +204.4 Vietnam Not 17 8 Not -- available available Source: "Asia Illicit Tobacco Indicator 2015", Oxford Economics, December 2016 *Countries that were part of the report but whose consumption of counterfeit cigarettes was either non-existent or for which no data were given were excluded from this table. Source: "Asia Illicit Tobacco Indicator 2015", Oxford Economics, December 2016 Composition of illicit cigarette consumption in Asia-Pacific 2015 unscrupulous dealers supply counterfeiters with the necessary production machinery and printing technologies that only should be made available to legitimate manufacturers. Asia-Pacific: big successes and big setbacks Although the illicit tobacco trade is a global prob- lem and not isolated to any region or country, Clemente pointed out that Oxford Econom- ics' "Asia Illicit Tobacco Indicator 2015" report showed that across 17 select markets in Asia- Pacific, 117.3 billion sticks consumed in 2015 were illicit, or one in every seven cigarettes consumed. The report, published in December 2016 and freely available from the Oxford Economics web- site (http://www.oxfordeconomics.com), goes on to indicate that this figure included 1.7 billion counterfeit cigarettes (see table 1). But what appears at first glance as a relatively small figure has to be contemplated in perspective. It must be understood that counterfeiting does not usually affect cheap domestic brands (as there is no money in it for counterfeiters), but foremost premium domestic as well as well- known international ones. Although some Asia-Pacific countries have made great strides towards weeding out counter- feit products and should be commended for it, others either haven't done so well or even experi- enced a substantial resurgence of the problem (see table). For example, by 2014 total consumption of counterfeit cigarettes in Australia had dwindled to a mere 8 million sticks (from 203 million in 2013). But, incredibly, in 2015, the country again saw a mind blowing resurgence of 450% in counterfeit products compared to the year prior. Meanwhile, the Philippines, which has always been one of the region's largest market for counterfeit cigarettes, clocked a year-on-year increase of 93.1% in 2015. And fellow ASEAN member Thailand likewise ap- peared to have failed in its efforts to curb this illicit tobacco segment, as consumption unfortunately skyrocketed by a rather embarrassing 204.4% in 2015. These Oxford Economics figures suggest all too vividly that the fight against counterfeit ciga- rettes is far from over. Safety features: more is better To combat counterfeiting, a multi-layered ap- proach is best. In other words: The more sophis- ticated and numerous – thus costly and difficult to copy – the security features on cigarette packaging and the sticks themselves are, the less attractive the respective brand becomes to counterfeiters. "Fake products need to exactly match the orig- inal, therefore every part would need to be copied Composition of illicit cigarette consumption 2015 Legal Domestic Consumption Non-Domestic Legal Domestic Illicit Illicit Consumption Non-Domestic Illicit Unspecified Counterfeit Contraband Primary slicer used at an illegal cigarette manufacturing facility courtesy of Philip Morris International

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