BAT calls for greater illegal tobacco trade understanding on World No Tobacco Day 2015
Today, British American Tobacco is reiterating the need for greater understanding of the illegal tobacco trade, the criminals behind it and the need for greater cooperation and collaboration to fight it. This call to action launches as part of a new campaign, developed by British American Tobacco, to raise awareness of the facts around the illegal tobacco trade to coincide with the WHO’s World No Tobacco Day on Sunday 31 May.
The nature and scale of the illegal tobacco trade, and the approaches required to tackle it, vary from country to country. However, if all of the different organisations involved in the illegal tobacco trade around the world were combined into one conglomerate, they would become the third largest international tobacco company by revenue.
The campaign portrays this fictional tobacco conglomerate – International Tobacco Smugglers Inc. (ITSI) – profiling the criminal supply chain and how these people are working together on an international scale in sophisticated, highly organised, criminal networks to manufacture, transport and distribute tobacco products illegally. These people include the person selling cigarettes for pocket money prices in local neighbourhoods and the transport specialist who ships illegal tobacco products from country to country, through to the wealthy ‘king pin’ who is in overall control.
Freddy Messanvi, Legal & External Affairs Director, comments: “The impact of illegal tobacco may not be felt as immediately and directly as other crimes, but the consequences are very real. By some estimates, illegal tobacco costs governments around the world $40-$50 billion each year in unpaid tobacco taxes. In West Africa, it is estimated to cost about $774 million to governments across the region. Coming closer to home, in Nigeria this implies that illicit activities attributes to the shortfall in government revenue from tobacco sales by an underestimation of over N216 billion paid in taxes to the Nigerian government which could have been higher. A crucial fact to also note is that sales of illegal tobacco have been reported to fund human trafficking, drug and arms trades as well as terrorist organisations activities globally.
Mr. Messanvi further states that “British American Tobacco Nigeria has been operating here since 2003. In the 15 years of our operations in Nigeria, we have shown commitment to the Memorandum of Understanding (MOU) signed with the Nigerian Government to regularise the tobacco sector, support sustainable Foreign Direct Investments (FDI) and contribute to socio- economic development in Nigeria. Our partnerships with government agencies have yielded a significant reduction in incidence of illicit tobacco products in Nigeria with a reduction from about 80% share of market when we first came in to less than 20% as at 2015, thereby supporting the reclaiming of government revenue lost through illegal tobacco marketing channels. Though a significant achievement, we believe there is still work to be done in this area. The amount of illegal tobacco is much more significant than is generally realised: an estimated 400-600 billion cigarettes, the equivalent of approximately 10-12% of world consumption globally and in West Africa about 60 billion cigarettes which is about 10% of the global illicit trade. It is a transnational, multi-faceted issue and one that requires a collaborative approach, from governments and law enforcement agencies with whom we work in partnership to retailers and customers who can arm themselves with the facts, to tackle it.”
The nature of the illegal tobacco trade varies from country to country but the drivers are very similar. These include regulation that is not balanced, over regulation, large excise increases causing price differences between countries and ineffective law enforcement measures.
Freddy Messanvi continues; “We are an important part of the solution and we invest over $75 million each year globally to fight the illegal tobacco trade industry. British American Tobacco has dedicated Anti-Illicit Trade teams across the world and in Nigeria that work with government agencies, including police and customs officials, with the aim of bringing criminals who are involved in the illegal tobacco trade to justice. We also support the FCTC Protocol to eliminate Illicit Trade in Tobacco Products, but this treaty will only be effective if it is consistently applied and enforced by joined up governments.”