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Introduction

Cigarette smuggling has emerged as a critical public health issue. As well as being the source of huge losses in government revenues, smuggling makes cigarettes more affordable, thus stimulating consumption and undermining control measures, most notably among youth and low-income consumers. The illicit trade in tobacco is served by three broad categories of supply, namely, counterfeiting, bootlegging, and large-scale smuggling. This paper focuses on large-scale smuggling of cigarettes and other tobacco products that circumvent tax regimes, which accounts for the vast majority of cigarettes smuggled globally. Recent estimates suggest that the trade in smuggled cigarettes accounts for around 6%–8% of global consumption and around one-quarter of total exports. The centrality of provisions to combat smuggling within the World Health Organization's Framework Convention on Tobacco Control (FCTC) indicate recognition of this worldwide problem.

Tobacco industry documents, released following litigation in the United States, have demonstrated the complicity of British American Tobacco (BAT) in large-scale smuggling. Whereas previous work has illustrated the strategic importance of smuggling to BAT's expansion in Asia and the former Soviet Union, this paper offers the first detailed analysis of corporate involvement in contraband to one country. The significance of this work is enhanced by China's status as the world's largest cigarette market, comprising 350 million smokers and one-third of cigarettes smoked. So far dominated by domestic producers, China is seen as the “ultimate prize” among the world's emerging tobacco markets because of a potentially huge demand for foreign brands.

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