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No surge in illicit cigarettes after implementation of menthol ban in Nova Scotia
  1. Michal Stoklosa
  1. Correspondence to Michal Stoklosa, Economic and Health Policy Research, American Cancer Society, Atlanta, GA 30303, USA; michal.stoklosa{at}cancer.org

Abstract

Background In May 2015, the Canadian province of Nova Scotia became the first jurisdiction in the world to ban menthol cigarettes specifically. The tobacco industry warned that ‘the primary effect of this law will be to increase the illegal tobacco market in Nova Scotia’. This is the first attempt to examine the impact of the menthol ban on trends in illicit cigarettes.

Data and methods Data on the number of illicit cigarettes seized in Nova Scotia covering the period from 2007/2008 to 2017/2018 was obtained from the Provincial Tax Commission. Data from before and after the ban are compared.

Results According to the local authorities, while the enforcement efforts in Nova Scotia have not declined, the number of seized illicit cigarettes declined significantly, from >60 000 cartons in 2007/2008 to <10 000 cartons in 2017/2018. Since the menthol ban, the seizure volume remained stable, with no statistically significant difference in the number of cigarettes seized before and after the menthol ban (t=−0.71, p=0.55). There were only a few small seizures of menthol cigarettes in the year following the ban, after which there have been no further seizures of menthol cigarettes.

Discussion Contrary to the tobacco industry’s assertions, there was no surge in illicit cigarettes after the 2015 ban on menthol cigarette sales in Nova Scotia. Credible, industry-independent evidence on illicit cigarette trade is desperately needed to support the implementation of tobacco control policies.

  • illegal tobacco products
  • tobacco industry
  • public policy
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Background

Menthol cigarettes promote experimentation and regular cigarette use among youth smokers and reduce smokers’ motivation to quit.1 Therefore, increasing numbers of jurisdictions are banning or considering banning menthol cigarette sales. Canada and Ethiopia ban menthol cigarettes,2 the ban on menthol will come into effect in all European Union Member States in 2020,3 and the USA reopened the menthol ban for consideration in March 2018.4

The tobacco industry has been opposing menthol bans using the same tactic they use to oppose virtually any new tobacco control policy: by claiming that the new measures will cause a dramatic increase in cigarette smuggling.5–9 For example, in the USA, the industry claimed that ‘banning menthol cigarettes could trigger a series of unintended consequences that… would likely include a significant expansion of the unregulated, illicit cigarette market’.10 In instances when the tobacco industry has raised the illicit trade argument to oppose life-saving measures, such as tax increases, plain packaging and display bans, the industry threats of increased illicit cigarette trade rarely materialise.5 However, because only a few jurisdictions to date have successfully banned menthol cigarettes and all the existing bans are very recent, there has been no evidence regarding the effects of menthol bans on illicit cigarette trade.

In May 2015, the Canadian province of Nova Scotia became the first jurisdiction in the world to ban menthol cigarettes. The ban was largely motivated by concerns over menthol cigarette use among youth smokers.11 While menthol tobacco products represented only 4.5% of the Canadian tobacco product market,11 among high school cigarette smokers in Nova Scotia, 38% used menthol cigarettes.12

Before the ban, the National Coalition Against Contraband Tobacco (NCACT), a tobacco industry front group,11 warned that ‘the primary effect of this law will be to increase the illegal tobacco market in Nova Scotia’.13 NCACT used a retired Toronto policeman to serve as a spokesman in their campaign against the menthol ban.13 Other tobacco industry front groups, such as the Atlantic Convenience Stores Association, also used the illicit trade argument to actively oppose implementation of this public health measure.11 To verify if those industry predictions were accurate, I obtained data on illicit cigarette seizures from the government of Nova Scotia via a freedom of information request.

Data and methods

Data on illicit cigarette seizures covering fiscal years from 2007/2008 to 2017/2018 were obtained from the Audit and Enforcement unit of the Provincial Tax Commission, Service of Nova Scotia.14 The data include information on the total number of illicit cigarettes seized in Nova Scotia in each fiscal year (in cartons or carton equivalents), as well as the number of seizures and the tax value of the seized cigarettes for those years. It covers seizures by Nova Scotia’s as well as other Canadian law enforcement agencies and includes all major seizures and the vast majority of small seizures in the province.14 Fiscal years in Nova Scotia start on 1 April and end on 31 March. The t-test was used to compare data from the 3 years before (2012/2013 to 2014/2015) and after (2015/2016 to 2017/2018) the ban.

Results

According to the local authorities, while the enforcement efforts in Nova Scotia have not declined in the recent years, the number of seized illicit cigarettes declined significantly, from >60 000 cartons in 2007/2008 to just <10 000 cartons in 2017/2018 (figure 1).14 The bulk of this decline occurred in the late 2000s, which suggests that the patterns in cigarette seizures were driven by forces unrelated to the menthol ban. In the years after the menthol ban, the seizure volume remained stable, with no statistically significant difference in the number of cigarettes seized before and after the menthol ban (t=−0.71, p=0.55). This indicates that illicit cigarette sales in the province are similarly unlikely to be increasing. Indeed, the Service of Nova Scotia estimates that the prevalence of illegal tobacco in the province has actually decreased, from 30% of all tobacco consumed in 2006/2007 to <10% in 2016/2017,15 although the method used to obtain this estimate is not provided. Although separate data on seizures of menthol cigarettes are not collected by the Nova Scotia authorities, the authorities indicated that there were only a few small seizures of menthol cigarettes in the year following the ban, after which there have been no further seizures of menthol cigarettes.14

Figure 1

Number of illicit cigarettes seized in Nova Scotia, includes flavoured and unflavoured cigarettes. Note: The spike in quantity seized in 2013/2014 is attributable to two large seizures (5350 cartons and 2502 cartons, respectively). The increase in seizures in 2015/2016 relates to one investigation of illegal wholesaling/retailing and involved 83 separate seizures.

Discussion

Contrary to the tobacco industry’s assertions, there was no surge in illicit cigarettes after the 2015 ban on menthol cigarette sales in Nova Scotia. Although cigarette seizure data are not suitable for estimating the share of illicit cigarettes in the total cigarette market and may reflect customs activities, seizure data from Nova Scotia give some useful insights into trends in the smuggling activities. Specifically, according to the local authorities, the enforcement efforts in Nova Scotia have not declined during the period from 2014 to 2018 and, in fact, they intensified in some areas, such as targeting higher level players involved in tobacco smuggling. Therefore, the fact that the numbers of cigarettes seized before and after the ban are not statistically different, as well as the fact that no menthol cigarettes were seized in Nova Scotia in the last two fiscal years of this analysis provide a strong indication that there is no significant activity in illicit menthol cigarette trade in the province spurred by the menthol cigarette ban. As found by other authors, menthol cigarettes were also not available in large retail stores after the ban,16 suggesting overall compliance with the new measure.

The reported source of illicit cigarettes in Nova Scotia is also interesting. Unlike in other studies, which found that an overwhelming majority of illicit cigarettes originate from legitimate tobacco manufacturers,17 data obtained from Nova Scotia indicate that the illicit cigarettes seized in the province come mainly from illegal manufacturing. According to the Nova Scotia authorities, those products are being sold in clear plastic bags of 200 cigarettes, called ‘baggies’, and originate from illegal manufacturing operations located in upstate New York, Ontario and Quebec.

This study is yet another example of the tobacco industry arguments pertaining to illicit cigarette trade being unsubstantiated and exaggerated. Debunking these industry myths of increased smuggling and providing rigorous, industry-independent estimates of illicit cigarette trade, using methods such as surveys of smokers and cigarette pack examinations,18 has become an integral part of the tobacco control movement. Credible evidence on illicit cigarette trade is desperately needed to support the implementation of Article 9 of the WHO Framework Convention on Tobacco Control (FCTC) on the regulation of contents of tobacco products, as well as of other WHO FCTC provisions.

What this paper adds

  • Previous research suggests that implementation of new tobacco control measures almost never leads to substantial increases in illicit cigarette trade.

  • This is the first evaluation of the impact of a specific menthol ban on trends in illicit cigarettes.

  • This study also adds to the large and growing body of evidence showing that the tobacco industry predictions that the new tobacco control measures will cause a dramatic increase in cigarette smuggling do not seem to ever materialise.

Acknowledgments

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

References

View Abstract

Footnotes

  • Contributors MS is the sole author of this report.

  • Funding The author has not declared a specific grant for this research from any funding agency in the public, commercial or not-for-profit sectors.

  • Competing interests None declared.

  • Patient consent Not required.

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

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