It's almost surreal to hear people insist that the black market in tobacco is (a) negligible, and (b) unrelated to tobacco taxes. In places like Australia and the UK, this not only contradicts our "lived experience" but also basic economics.
And yet the UK government is so sanguine about the illicit trade that it didn't bother modelling the impact of the generational tobacco ban on it, and the recently leaked tobacco tax report from the European Commission confidently proclaimed that...
“while price levels may act to incentivise the illicit trade of tobacco products (ITTP) the main driver is not the relative levels of price or taxation, instead other drivers are at play such as the permeability of borders; the severity of sanctions for offenders; the geographic proximity to illegal production and/or distribution sites… In other words, there is no direct proportionality between tax levels and the level of illicit trade”
I've been doing some work on this using the most up-to-date cigarette tax/price/affordability figures and looking at their relationship with illicit cigarette sales. The results shouldn't surprise anyone. There is a very strong relationship. For example...
Epicenter published my findings yesterday. You can read the report here.
No comments:
Post a Comment