Article Text

Is the illicit cigarette market really growing? The tobacco industry's misleading math trick
  1. Michal Stoklosa
  1. Correspondence to Michal Stoklosa, Economic and Health Policy Research, American Cancer Society; michal.stoklosa{at}cancer.org

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The tobacco industry regularly uses the threat of increased illicit cigarette trade to dissuade governments from implementing prohealth policies. Illicit trade is the number one argument used by the tobacco lobby to oppose tobacco tax increases,1 and is also being used against implementation of other major tobacco control measures such as plain packaging, display bans and pack size restrictions.2

Studies funded and presented by cigarette manufacturers and their business associations are generally not peer-reviewed or replicable and therefore, do not meet standards of academic research.3 A growing body of evidence suggests that estimates of the illicit cigarette trade levels presented in the industry-commissioned reports are often inflated.4–10

Another tactic used by the tobacco industry to exaggerate the scope of the illicit cigarette trade problem is to use illicit cigarette market share rather than the absolute number of illicit cigarettes smoked when presenting trends in the illicit cigarette market. Relying on market share (the number of illicit cigarettes as a percentage of the number of all cigarettes, both legal and illicit combined) is problematic, because the illicit market share can increase even while the actual number of illicit cigarettes smoked is decreasing.

Table 1 illustrates this problem using industry data from Poland. Although between 2009 and 2013, according to an industry-commissioned study, illicit cigarette consumption declined by nearly one billion sticks, from 7.07 billion to 6.1 billion; however, the illicit market share increased by over two percentage points, from 11.8% to 13.9%, because legal consumption declined faster than illicit consumption.11 The tobacco industry, using only the market share, claimed in public debate in Poland that illicit cigarette trade was increasing12 while actually, in absolute terms, it was declining.

Table 1

The tobacco industry estimates of legal and illegal cigarette consumption in Poland

To study the extent to which illicit market share misrepresents trends in illicit cigarette market globally, I used data from Euromonitor,13 a market research company. Although there are some concerns around the reliability of Euromonitor illicit trade data,14 no other comparable global data exist. Euromonitor provides estimates of illicit cigarette market volumes as well as total cigarette market volumes for 80 countries worldwide. I extracted 2005–2013 data for these 80 countries from the Euromonitor database and for each country identified pairs of any 2 years within that time period (36 combinations) with a pattern of declining illicit cigarette volume and rising illicit market share.

I found that relying on the illicit market share measure misrepresents actual trends in illicit cigarette consumption in most of the countries. In total 43 of the 80 Euromonitor countries (54%) had a period of time, between 2005 and 2013, with an increase in illicit market share and a decline in illicit market volume (see supplementary appendix 1 for the list of those countries).

Relying on illicit market share as a measure of illicit cigarette market size often gives a wrong impression about actual trends in illicit cigarette consumption. With the implementation of effective tobacco control measures, cigarette consumption is falling in most nations.15 In fact, it seems that tobacco control policies are effective in reducing consumption of legal and illegal cigarettes.16 Since tobacco control measures act predominantly to decrease legal cigarette consumption, legal consumption declines faster than consumption of illegal cigarettes. In such cases, illicit market share will grow even with illicit cigarette consumption declining in absolute terms. Tobacco control researchers, health advocates and the media should be aware of these patterns and when reporting trends in illicit cigarette smoking should use absolute numbers of illicit cigarettes consumed rather than the illicit market share.

Key messages

  • The tobacco industry uses a little “sleight of hand” to misrepresent trends in illicit tobacco trade to serve their narrative of an existing or looming problem. In many cases, their claims articulate a half-truth at best.

  • The illicit market share, a measure widely used by the industry, can misrepresent actual trends in illicit cigarette consumption: while in many countries in absolute terms the illicit cigarette consumption declines, the illicit market share increases, because legal cigarette consumption declines faster than consumption of illicit cigarettes.

Acknowledgments

The author would like to thank Jeffrey Drope and John Daniel for their valuable input and comments.

References

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Supplementary materials

  • Supplementary Data

    This web only file has been produced by the BMJ Publishing Group from an electronic file supplied by the author(s) and has not been edited for content.

Footnotes

  • Competing interests None declared.

  • Provenance and peer review Not commissioned; externally peer reviewed.

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