Billion Dollar Baby: Contraband Tobacco’s Price Tag in Australia
A new report finds that sales of illegal tobacco has come with a high cost to the Australian government.
POTTS POINT, New South Wales – A booming illegal tobacco trade is costing the Australian government billions, according to the first report on illegal tobacco released since the introduction of plain packaging last year. The report, issued this week, shows the problem has worsened with the tobacco black market now booming with illicit cigarettes imported mainly from Asia and the Middle East.
The report was developed by KPMG LLP in the UK, and commissioned by British American Tobacco Australia (BATA), Philip Morris Limited and Imperial Tobacco Australia. It shows that the overall size of the market has grown from 11.8% to 13.3% and more than $1 billion (approximately $946 million in U.S. dollars) a year in excise revenue is being lost. The growth of the illegal market is consistent with evidence from covert purchases.
In BATA’s view, plain packaging, combined with our already high tobacco tax rates, and the previous government’s plan to increase tobacco excise by another 60% over the next four years, could see the illegal tobacco problem skyrocket. “Nearly 70% of every dollar sold from a legal pack of cigarettes goes to the government in taxes, which is why tobacco smuggling is such a lucrative venture for gangs as they obviously don’t pay any tax and pocket the profits instead,” said BATA spokesperson Scott McIntyre in a press release.
Lear MoreTiffany wins $2.2m damages against online counterfeiters
Jewelry company Tiffany & Co has won $2.2m in damages and a permanent injunction against 78 websites selling counterfeit versions of its products. The US District Court for the Southern District of Florida issued a final default judgment against the website operators last week, ordering take-downs for a series of sites using domain names such as salestiffany.net, shoptiffanyco.com, tiffanyandcomall.com,tiffanycooutlet.co.uk. “Trademark counterfeiting severely damages brand owners and consumers alike,” commented Michael Kowalski, Tiffany’s chief executive. “The way to stop it is to take aggressive action against the counterfeiters and make them pay, civilly,” he added. “That’s what happened in this case which should send a message to anyone trying to sell counterfeit Tiffany merchandise.” Tiffany filed suit against wholesale club Costco earlier this year for allegedly selling diamond engagement rings that infringed its trademarks. It also filed a suit against eBay in 2004 to try to make the online retailer take infringing products off its website, but failed to secure a judgment in its favour in 2008 after an appeals court ruled it is the manufacturer’s responsibility to monitor goods sold on online auction sites. A bid to bring the case to the US Supreme Court was blocked in 2010.
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Share of counterfeit alcohol market in Kazakhstan reaches 50%
The share of counterfeit alcohol market reaches 50% in Kazakhstan, Director of the Expert Institute of European Law and Human Rights Marat Bashimov said at the briefing in the Central Communications Service. Marat Bashimov noted the inefficiency of the Ministries in combating the shadow economy and said that the market of the counterfeit alcohol in Kazakhstan reaches 50%, whereas in other developed countries the share is about 8-15%, CA-News reports.
http://bnews.kz/en/news/post/168709/
Lear MoreCoalition says youth are target of contraband tobacco
The seizure of $14,000 worth of illegal cigarettes last week in Pictou County has caught the attention of the National Coalition Against Contraband Tobacco. Jacqueline Bradley, executive director of the coalition, phoned this newspaper to publicly express what she believes is a growing trend in Eastern Canada. She said she first became involved in the topic when her 15-year-old daughter came home from a party talking about people passing around cigarettes in a plastic baggie. She did some research and discovered it was contraband smokes. “For me the only thing I want my kids taking out of a baggie is their lunch,” she said. Youth are one of the main targets of contraband cigarettes and that’s something she says parents should be concerned about. “We have no way of truly knowing what’s in them because there is no control.”
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Illicit tobacco funding gangs and increasing use
ILLEGAL tobacco is booming across Australia, funding international criminal gangs, and costing taxpayers more than $1 billion each year. And the introduction of plain packaging for legal cigarettes has failed, according to a report released this morning. That report states that tobacco consumption in Australia will rise this year for the first time since 2003. Demand for cheap counterfeit and contraband cigarettes is accelerating, driven by excise increases on legitimate tobacco. And shops dispensing illegal tobacco do so with apparent impunity, despite a fine of up to $340,000 for selling a single packet. The Tobacco Plain Packaging Act, passed in 2011, made Australia the first country to remove all logos, colour and design from cigarette packets. But a report compiled by the international auditing firm, KPMG, and released exclusively to the Herald Sun, shows that while sales of legal cigarettes and tobacco have slipped slightly in the past 12 months, surging demand for counterfeit and contraband cigarettes and chop chop tobacco has more than made up that shortfall. The KPMG report was commissioned by big players in the legal tobacco industry. It involved analysing consumers’ preferences and collecting 12,000 discarded cigarette packets. Three years ago, then prime minister Kevin Rudd announced a 25 per cent increase in tax on cigarettes along with the plain packaging plan, the government convinced the changes would slash tobacco consumption by 6 per cent.
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Tobacco worth $24,000 stolen in Windham
WINDHAM – A young Windham-area family took a hit in the pocketbook this week when thieves cut a large hole in a pack barn and made off with 14 large bales of cured tobacco.
Each bale weighs 750 pounds. Total value of the theft is estimated at $24,000. Dan Fernandes and partner Kendle Columbus of Windham Road 6 were not insured. “I never thought in a million years that this would happen,” Fernandes said Thursday. “When I saw this my heart just sank.” The theft occurred in the early morning hours of Wednesday. Whoever did the crime was well-organized and brazen. The thieves drove several vehicles up to the rear of the pack barn, cut a large hole in the back of it, and made off with a large amount of tobacco. Fernandes, 30, was not insured. With his pack barn being less than 100 feet from his home, Fernandes didn’t think anyone would attempt an incursion like this. Fernandes was so confident about his situation that he decided this year not to pay the $700 premium to insure the contents of his pack barn. “Our offshore workers saw this and they were so upset,” said Columbus. “This was their hard work too. They had tears in their eyes. They asked ‘What kind of country is this?’” Const. Ed Sanchuk of the Norfolk OPP says a crew of six would have been capable of hoisting the bales onto a truck. He suspects the tobacco has been shipped to a blackmarket producer of contraband cigarettes.
Sanchuk noted this was the third theft of its kind in the tobacco belt in recent weeks. He said farmers and their neighbours need to band together and look out for suspicious activity on each other’s property. The OPP are interested in hearing reports of strangers snooping around farmyards or who come onto properties claiming to look for someone they believe lives in the area. Sanchuk said vehicle descriptions and licence numbers should be noted under these circumstances and passed along to police right away. Fred Neukamm of Aylmer, chair of the Ontario Flue-Cured Tobacco Growers Marketing Board, said growers should seek advice from the OPP if they have doubts about the security of their buildings. Neukamm added that growers should not confront the situation if they believe they have come upon a theft in progress. “Personal and family safety comes first,” Neukamm said. “The most appropriate advice is to phone 911 and ask for the police immediately.”
http://www.tillsonburgnews.
Major tobacco bust in Abercrombie
NEW GLASGOW – A 41-year-old man Pictou County man has been charged under the Excise Tax Act in relation to one of the area’s largest unstamped tobacco busts. The Pictou County intregrated Street Crime United conducted a traffic stop Tuesdaymorning in Abercrombie and as a result 80,000 cigarettes with a street value of $14,000 were seized. “Unstamped tobacco is a large problem nation-wide,” said Andrew Joyce of the Pictou County RCMP. “It ieads to major organized crime and as the underbelly of our society it has the potential to draw our nation down to third world status. This is taken very serious by police.”
The accused man, who has been released from police custody, will make his first court appearance on December 16.
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Counterfeiting a Major Problem in Cameroon
YAOUNDE — The government of Cameroon said international trade in counterfeit and pirated products cost the west African country $2 billion this year. This total does not include domestically produced and consumed counterfeit and pirated products and the significant volume of pirated digital products being distributed via the Internet. It says the items counterfeiters and pirates produce and distribute are dangerous, posing health and safety risks. It is business as usual at the Ekounou Market, known for the sale of counterfeit and pirated goods in the heart of Cameroon’s capital, Yaounde. From toothpaste to industrial products, drugs, drinks and textiles, everything looks fake. Yvette Tomo, a middle-aged merchant, tells VOA that it is not only at their market where counterfeited goods are bought and sold in broad daylight. “In Cameroon, you have an impression that practically everything is fake,” she noted. “If people also counterfeit medicines and baby milk then the situation is very bad.”
http://www.voanews.com/
Nobody is immune to negative effect of contraband tobacco
As British Columbia completes its annual pre-budget consultation, the province would be wise to exercise extreme caution when it comes to tobacco taxation. While governments have been known to be quite addicted to tobacco taxes, and use taxation as an easy fix — as evidenced by the latest $2-per-carton increase that took effect in B.C. on Oct. 1 — there are serious negative and unintended consequences that come with a high tax policy. It does not take a degree in economics to figure out what happens when the price of a product is increased time and again: Consumers look for cheaper alternatives. When it comes to tobacco in Canada, that alternative is readily available through an illegal, untaxed and unregulated market. While B.C. is fortunate to have not yet seen illegal tobacco levels like those found in Ontario and Quebec, which reached 48 per cent and 40 per cent respectively in 2008, the threat remains very real. In recent years, illegal tobacco shipments from Ontario and Quebec have been seized across Canada, including in B.C.
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Forest products smuggling rampant at border areas
Taking advantage of virtually non-existent administrative mechanism in the remote border areas rare and precious forest products such as Ginseng, orchids and root species called Khuikhe in Tangkhul dialect are being smuggled in truck-loads to China via Myanmar through the porous international border in Ukhrul district sector. The illegal trading in forest products came to light when this reporter recently went to Tusom area under Jessami sub-division of Ukhrul district and spotted loads of wild-plants transported into Myanmar for its final destination in China where information has been received about the plants being used in manufacture of medicines. It is said that for the last many years huge quantity of wild plant species found abundantly in Tusom and adjoining villages used to be smuggled into Myanmar in Shaktiman trucks, Tata DI and other goods carriers.
http://e-pao.net/GP.asp?src=1..241013.oct13
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