The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.
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Learn moreNov 2018
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In 2017 around one in 10 cigarettes lit globally, excluding China, was illicit, compared to one in 11 in 2012. Valued collectively at more than USD60 billion, illicit sales cause substantial tax losses to countries around the world. Illicit trade impacts tobacco manufacturers, governments and the tobacco control community, and requires a coordinated international response. This briefing outlines the nature of illicit trade, and shows the latest global, regional and country-specific trends.
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In 2017 the volume of duty-not-paid cigarettes consumed globally was 456 billion sticks, with an estimated tax revenue lost for governments of around USD40bn.
Global illicit trade volumes grew by 1.4% in 2017, while the average penetration increased to 7.8%, from 7.6% in 2016. However, as with all tobacco statistics, China skews the picture, where consumption of illegal cigarettes declined by 6.9% in 2017. Excluding China, world illicit trade grew by 4.3%, with 10.3% penetration.
Price differentials remain the key driver of illicit trade on both the demand and supply sides, helped by porous borders and weak governance. The Robin Hood complex – widespread consumer acceptance of illicit traders as benefactors rather than criminals – remains an issue.
In 2017 illicit trade in cigarettes grew the most in Latin America, mainly reflecting the worsening situation in Brazil, while significant progress in tackling the issue was registered in China and Turkey.
Illicit whites, cigarettes manufactured legally but with no legitimate destination market, continue to gain share in Europe and Asia, benefiting from their higher quality and non-adherence to packaging requirements.
Every tobacco stakeholder is impacted by illicit trade. Companies and states suffer financial loss, while public health policies are undermined. Public and private agencies need to act together to combat the problem. Although recent international efforts to tackle illicit trade, such as COP8 and MOP1, have progressed, the fading cooperation between authorities and the industry is a serious cause of concern.
Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.