Illicit trade in tobacco products: recent trends and coming challenges

Paraje, Guillermo; Stokłosa, Michał; Blecher, Evan

doi:10.1136/tobaccocontrol-2021-056557

Cited by 15 publications

(12 citation statements)

References 46 publications

(94 reference statements)

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“…Although the association between tax increase and illicit trade is controversial,20 the model considers the potential substitution between legal and illegal markets, based on the cross-price elasticity between them. Parameters needed to estimate cigarette price elasticity for each country were obtained from the literature.…”

Section: Methodsmentioning

confidence: 99%

Health, economic and social burden of tobacco in Latin America and the expected gains of fully implementing taxes, plain packaging, advertising bans and smoke-free environments control measures: a modelling study

et al. 2023

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ObjectiveTo investigate the tobacco-attributable burden on disease, medical costs, productivity losses and informal caregiving; and to estimate the health and economic gains that can be achieved if the main tobacco control measures (raising taxes on tobacco, plain packaging, advertising bans and smoke-free environments) are fully implemented in eight countries that encompass 80% of the Latin American population.DesignMarkov probabilistic microsimulation economic model of the natural history, costs and quality of life associated with the main tobacco-related diseases. Model inputs and data on labour productivity, informal caregivers’ burden and interventions’ effectiveness were obtained through literature review, surveys, civil registrations, vital statistics and hospital databases. Epidemiological and economic data from January to October 2020 were used to populate the model.FindingsIn these eight countries, smoking is responsible each year for 351 000 deaths, 2.25 million disease events, 12.2 million healthy years of life lost, US$22.8 billion in direct medical costs, US$16.2 billion in lost productivity and US$10.8 billion in caregiver costs. These economic losses represent 1.4% of countries’ aggregated gross domestic products. The full implementation and enforcement of the four strategies: taxes, plain packaging, advertising bans and smoke-free environments would avert 271 000, 78 000, 71 000 and 39 000 deaths, respectively, in the next 10 years, and result in US$63.8, US$12.3, US$11.4 and US$5.7 billions in economic gains, respectively, on top of the benefits being achieved today by the current level of implementation of these measures.ConclusionsSmoking represents a substantial burden in Latin America. The full implementation of tobacco control measures could successfully avert deaths and disability, reduce healthcare spending and caregiver and productivity losses, likely resulting in large net economic benefits.

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Section: Methodsmentioning

confidence: 99%

Health, economic and social burden of tobacco in Latin America and the expected gains of fully implementing taxes, plain packaging, advertising bans and smoke-free environments control measures: a modelling study

et al. 2023

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“…Strengthening tax administration is a crucial step in eliminating illicit tobacco trade, the feasibility of which remains questionable in relation to bidi and ST. Most SEAR countries will also need to modify their legal, administrative and enforcement structures, 69 which may include formalising the bidi and ST supply chain including issuing and enforcing vendor licences.…”

Section: Illicit Tobacco Trade - Beyond Cigarette Pricesmentioning

confidence: 99%

Common assumptions in tobacco control that may not hold true for South-East Asia

Siddiqi

Arora

Gupta

2023

The Lancet Regional Health - Southeast Asia

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“…Evidence against the tobacco industry’s claims on illicit trade is substantial. First, illicit trade has stayed the same in the last decade despite increasing tobacco taxes 95–97. In fact, illicit tobacco products, mostly cigarettes, constitute a stable share in a shrinking market.…”

Section: Challenges From the Industrymentioning

confidence: 99%

“…Thus, even when increased taxes divert some demand to the illicit market, they push prices up in the illicit market as well, discouraging consumption 96. Recent evidence shows that illicit cigarette prices generally follow the prices of legal cigarettes (correlation coefficient: 0.87) 97 111…”

Section: Challenges From the Industrymentioning

confidence: 99%

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Taxation of tobacco, alcohol, and sugar-sweetened beverages: reviewing the evidence and dispelling the myths

Paraje,

Jha,

Savedoff

et al. 2023

BMJ Glob Health

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The article reviews the large body of evidence on how taxation affects the consumption of tobacco, alcohol, and sugar-sweetened beverages (SSB). There is abundant evidence that demand for tobacco, alcohol, and SSB is price-responsive and that tax changes are quickly passed on to consumers. This suggests that taxes can be highly effective in changing consumption and reducing the burden of diseases associated with consuming these products. Tobacco, alcohol, and SSB industries oppose taxation on similar grounds, mostly on the regressivity of taxes since regressive taxes take a larger percentage of income from low income earners than from middle and high income earners; but also on the effects taxes might have on employment and economic activity; and, in the case of tobacco, the effects taxation has on illicit trade.Contrary to industry arguments, evidence shows that taxation may have short-term negative financial consequences for low-income households. However, medium and long-term financial benefits from reduced healthcare costs, better health, and welfare largely compensate for such consequences. Moreover, taxation does not negatively affect aggregate economic activity or employment, as consumers switch demand to other products that generate employment and may compensate for any employment loss in taxed sectors. Evidence also shows the revenues generated are generally spent on labour-intensive services. In the case of illicit trade in tobacco, evidence shows that illicit trade has not increased globally (rather the opposite) despite increases in tobacco taxes. Profit-maximising smugglers increase illicit cigarette prices along with the increases in licit cigarette prices. This implies that even when increased taxes divert some demand to the illicit market, they push prices up in the illicit market, discouraging consumption.

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Illicit trade in tobacco products: recent trends and coming challenges

Cited by 15 publications

References 46 publications

Health, economic and social burden of tobacco in Latin America and the expected gains of fully implementing taxes, plain packaging, advertising bans and smoke-free environments control measures: a modelling study

Health, economic and social burden of tobacco in Latin America and the expected gains of fully implementing taxes, plain packaging, advertising bans and smoke-free environments control measures: a modelling study

Common assumptions in tobacco control that may not hold true for South-East Asia

Taxation of tobacco, alcohol, and sugar-sweetened beverages: reviewing the evidence and dispelling the myths

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