Taking a world view
View our interactive map showing illegal tobacco trade hotspots around the world, and find out what we have been doing at BAT to fight the problem.
Explore our interactive map showing the illegal tobacco trade issues we face globally.Begin your journey
The illegal tobacco market has grown 30% in the last two years and is now at its highest level, driven by excise increases and plain packaging. This increase in the illegal tobacco trade is now costing the government Aus$1.35 billion per year in lost taxes.
BAT Australia is leading the industry fight against the illegal tobacco trade through continued law enforcement and government engagement and the sharing of intelligence and independent analysis of the illegal tobacco trade.
Illegal cigarettes account for 20% of the total cigarette consumption in Vietnam, and cost the government more than VND8,000 billion (USD$400 million) a year in lost taxes.
BAT Vietnam works closely with, and supports government and law enforcement agencies to raise awareness and tackle this illegal trade.
Around 3 out of 10 packets of cigarette that are sold in Malaysia are counterfeit or smuggled with the vast majority smuggled from neighbouring countries.
Increased enforcement activities are making headway, and have successfully driven down the levels of illegal cigarettes that are consumed in Malaysia by an unprecedented 2% to 33.7% in 2014 compared to 2013.
Illegal cigarettes count for 1 out of every 4 that are consumed, costing the government nearly US$ 1 billion in the last 5 years.
BAT Pakistan's Anti-Illicit Trade (AIT) team launched first-of-its-kind training for law enforcement agencies to boost efforts to counter the illegal tobacco trade.
The level of illegal tobacco is estimated at around 22% in Canada with concentration of the problem in the province of Ontario where more than 1 out 3 cigarettes sold is illegal. This illegal product is mainly domestic production with no duty paid.
BAT Canada works collaboratively with law enforcement and legislative authorities in the disruption of the illegal production and distribution of contraband tobacco, and works closely with partners, advocacy groups, and government agencies to raise awareness of the problem, which is instrumental in shaping effective federal and provincial legislation.
Recent excise increases, combined with poor border controls, has led to a 40% growth of the illegal tobacco trade in the last 3 years, which represents 31% of market share or 33bn cigarettes. The main source of this illegal tobacco is Paraguay. Souza Cruz places great importance on the ongoing fight of this illegal trade, working with law enforcement agencies and officials on efforts that include enforcement (approximately 5bn sticks seized per year and increased penalties) and wider engagement.
17% of cigarettes consumed in Mexico are illegal, with the largest inflows coming from India, USA and Panama. BAT Mexico works collaboratively with government and law enforcement agencies to focus on activities to that prevent illegal tobacco products entering the country.
Paraguay is a main source of illegal tobacco in many Latin and Central American countries. Legal domestic sales in Paraguay in 2014 was 0.8bn cigarettes. However, it is estimated that a further 65bn cigarettes were produced and exported, and that maximum production capacity in the country is around 100bn cigarettes.
Illegal cigarettes amount to 23.77% of total consumption in the Central American & Caribbean region costing millions of dollars in unpaid taxes for the region's governments and fuelling other criminal activities. Panama's Colon Free Zone and other FTZ in the country are the second largest source of illegal cigarettes flows in the Americas, mainly concentrated in Central America and Colombia.
BATCCA works collaboratively with private sector chambers, other FMCG companies and governments to form Anti Contraband Commissions. These Commissions support governments in enacting tougher anti-smuggling laws, creating special anti-contraband task forces and ensuring tougher enforcement, which has led to more seizures, arrest and convictions.
The issue of illegal tobacco in South Africa is signifcant, and years of continued growth has seen consumption levels reach as high as 35%.
The main source of illegal tobacco in South Africa has historically been from Zimbabwe. However, recent developments have shown an increase in locally manufactured, non-excise paid products. In 2014, an estimated 70% of all illegal tobacco consumed in the country was manufactured within South Africa.
BAT South Africa continued work in tackling the illegal tobacco trade has helepd to drive a sizeable reduction of consumption levels to 23% in 2014.
The level of illegal tobacco has increased four-fold to an average of 2.7% of the market by the end of 2014 compared to 2012. Counterfeit cigarettes are the largest growth area, accounting for more than 50% of total duty non-paid tobacco products. The number of illegal factories inside the country is also increasing. BAT Russia works in collaboration with government officials and retailers to raise awareness of and to draw attention to the issue.
Illegal cigarettes account for almost 20% of the total cigarette consumption in Turkey, which equals almost 1 billion packs. Neighbouring Bulgaria is both a source and a transit country for illicit supplies to Turkey. BAT Turkey supports the Confederation of Turkish Tradesmen and Craftsmen's national AIT campaign, which launched to increase awareness that the illegal tobacco trade has on society and to the economy.
Ukraine is one of the major sources and transit countries for illegal cigarettes to Western Europe. As a result of comprehensive cooperation between the tobacco industry and the Ukrainian government, six illegal factories were closed in 2014. BAT Ukraine has also provided solid inputs into the government's Anti-Illicit Trade plan for 2015.
Smuggled, tax evaded and counterfeit cigarettes account for nearly 23% of the total size of the Middle East volume costing governments close to USD$800 million in lost revenues. Political uncertainty and warfare in several Middle East markets also contribute to the growing problem.
BAT MIddle East plays a key role in tackling this problem - building awareness and facilitating the efforts and collaboration of stakeholders to combat illegal tobacco.
Due to concerted collaborative efforts between BAT Nigeria and government regulatory agencies, the level of illegal tobacco in Nigeria has been on a systematic decline.
Due to BAT Egypt's effective collaboration with Egyptian Law Enforcement Agencies, especially the National Border Guards, more controls are imposed on the borders between Egypt and Libya, leading to a significant decrease in the flow of illegal tobacco from Libya.
Illegal tobacco levels in Tunisia is 43%. BAT Tunisia engages with the Tunisian Law Enforcement Agencies, Customs, the Police, retailers and wholesalers to tackle the issue.
The largest non-EU inflow of illegal tobacco into the EU is from Algeria.
France has the highest volume of illegal cigarettes in Europe, with growing volumes continuing to originate from Algeria and cheaper markets in Eastern Europe.
BAT France collaborates closely with a number of organisations to combat the illegal tobacco trade, including UNIFAB (Union of Manufactures), and has signed a MoU with the Minister of Interior (T&T). BAT France has also run training session for Southampton custom officials.
The decline in sales of legal cigarettes in Poland is driven mainly by high availability of smuggled cigarettes from Belarus, Ukraine and Russia as well as growing consumption of local illegal tobacco leaf. By the of 2014, the share of the illegal tobacco trade in the tobacco market exceeded a total of 25% with estimated losses in tax revenue for the state budget equivalent to 1 billion EURO per year. BAT Poland works with government and law enforcement agencies to drive awareness of the issue, verifying evidence (including samples) and providing expertise that could be used in court trials, and knowledge sharing across industry.
Germany has the second highest volume of illegal cigarettes in Europe. Together with close and constructive cooperation between the industry and the authorities, volumes of illegal tobacco have decreased in 2014 by nearly 2%.
Illicit whites brands account for over half of illegal tobacco consumption.
BAT Romania has signed Protocols of Understanding with National Customs and Border Police department to fight against this illegal trade. BAT Romania also works with customs to provided training of tobacco sniffing dogs, which has become one of most efficient and effective ways in detecting illicit tobacco at borders.
Illegal tobacco volumes in Italy have been driven by increased inflows of illicit whites brands.
BAT Italia works in close collaboration with Italian law enforcement authorities and also actively participates at the AIT Permanent Observatory, round tables and dedicated events. A tailored communication campaign has been also launched highlighting the unintended consequences of the illegal tobacco trade and the link with organized crime.
We invest over $75 million each year to fight the illegal tobacco trade. British American Tobacco has dedicated Anti-Illicit Trade teams across the globe that work with government agencies, including police and customs officials.
As well as signing Memorandum of Understanding (MoU) to tackle illicit trade in more than 50(*) countries across the world, BAT plc. has also entered into voluntary negotiations with the European Union (EU). The EU Cooperation Agreement (EUCA) was officially signed in mid-2010 and is now a legally binding agreement between British American Tobacco, the EU and the EU Member States. This Agreement covers 28 Member States and an additional 19 countries (**).
(*) (*) BAT plc. 2014 Sustainability Report
(**) EUCA additional 19 countries: Albania, Andorra, Aruba, Belarus, Bosnia and Herzegovina, Syria, Turkey, UAE, Ukraine, Morocco, Nigeria, Panama, Russia, Serbia, Switzerland, Kosovo, Macedonia, Moldova and Montenegro.
Data sourced from KPMG reports and local market data.
For further information, please contact BAT Press Office:
Will Hill / Anna Vickerstaff
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