A new study reveals that less than 3% cigarettes sold in the Indian market have travelled through illegal channels and the quantum of illicit cigarettes in shops is not in the 20-25% range as the tobacco industry claims.
The study conducted by researchers from the Centre for Public Policy Research, Kochi and the School of Economics, University of Cape Town estimated the market share of illicit cigarettes is 2.73%. Researchers collected 11 063 empty cigarette packs from 1727 retailers across the country and found varying proportions of illicit products across the country.It was published in BMJ Tobacco Control
A cigarette pack was classified as illicit if it had a duty-free sign, no graphic health warnings, no textual health warnings or no mention of ‘price inclusive of all taxes’ or similar text. Empty cigarette packs generated by 1 day’s single-cigarette sales were collected directly from cigarette vendors in four large and four small cities covering the length and breadth of India. Ten areas were randomly selected in each city/town, and all shops selling cigarettes within 1 km of the central point were surveyed.
The estimates of illicit cigarettes varied substantially across locations with the highest prevalence of illicit packs was in the town of Aizawl near the Bangladesh and Myanmar border (35.87%). The share of illicit cigarettes was found to be much higher (13.77%) among the cheapest cigarette brands.
The figures belie claims by the tobacco industry that surface every time there is talk of increasing taxes – though taxing tobacco is a public health intervention rather than means of revenue generation. For example Tobacco Institute of India that describes itself as a “representative body of farmers, manufacturers, exporters and ancillaries of the cigarettes’ segment of the tobacco industry in India, whose members account for more than 98% of the country’s domestic sales of duty paid cigarettes” puts the figures at a quarter of the market. “Illegal Cigarette trade comprising international smuggled and locally manufactured tax-evaded cigarettes accounts for as much as 1/4th of the Cigarette Industry in India. Based on the current tax rates on cigarettes, it is estimated that the Government loses Rs. 13,000 crores per annum on account of illegal cigarette trade,” claims the TII handbook on illicit cigarette trade.
