Improving estimates of the illicit cigarette trade through collaboration: lessons from two studies of Malaysia.

This paper critically analyses contrasting estimates of Malaysia's illicit cigarette trade in 2011, 2015 and 2019 by Bui et al and Koya et al who previously produced independent estimates at about the same time using tax gap analysis. Collaboration between the two authors' teams emerged due to the discrepancies in their results, generating this paper to explore the methodological issues identified and hence produce revised estimates of the rate of illicit. Key issues identified were: Bui et al's assessment of legally imported cigarettes impacting all years; their exclusion of ad valorem duty affecting the 2011 and 2015 estimates; Koya et al overlooked the value of cigarettes for export market in their ad valorem calculation and used the sales value of imported tobacco/tobacco products, not just cigarettes, both of which impact estimates for 2011 and 2015. Recalculations using Koya et al's consumption data reveal that in 2019, illicit cigarettes accounted for about 70% of the market, which is higher than Bui et al's estimate (38%) but slightly lower than Koya et al's (72%). For 2011 and 2015 where ad valorem applied, the corrected estimates show a share of the illicit cigarette market of approximately 41.1% and 52.7%, respectively, differing from Bui et al's 0% in 2011 and 29.6% in 2015, and Koya et al's 51% in 2011 and 55% in 2015. This paper provides essential lessons for addressing methodological issues between authors' teams and updated estimates of Malaysia's illicit cigarette trade, verifying that Malaysia faces a substantial illicit cigarette trade problem.

What does Brexit mean for UK tobacco control?

In January 2020 the UK left the European Union (EU), although a transition period extends EU rules/regulations until the end of 2020 while a longer-term relationship agreement is negotiated. After almost 50 years of membership the UK economy is tightly integrated into that of the EU single market, and many UK laws and regulations have their origins in the EU, including those concerning tobacco. This paper provides an overview of potential implications of Brexit for UK tobacco control. We examine the key areas of the supply, cost, taxation, and regulation of tobacco products, and the impact of commitments in regards to the border between Ireland and Northern Ireland (NI). We find that Brexit provides an opportunity for improved tobacco control with potential for particular enhancements in the areas of taxation and product regulation. However, commitments in regards to NI mean these benefits either won't extend to NI (which will continue to follow EU rules), or could lead to the whole UK having to follow most EU rules/regulations despite no longer being involved in the decision making process. The details of any future deal will be important, especially since virtually all UK tobacco products come from the EU, and hence would be subject to disruption/considerable new tariffs (i.e. taxation on imports) without a trade deal. We conclude that political will by the UK government to secure conditions which protect the UK's world leading tobacco control measures will be key to whether Brexit helps or hinders tobacco control in the UK. In this regards the signs are mixed.

Tobacco industry's elaborate attempts to control a global track and trace system and fundamentally undermine the Illicit Trade Protocol.

BACKGROUND: The Illicit Trade Protocol (ITP) requires a global track and trace (T&T) system to reduce tobacco smuggling. Given the tobacco industry's (TI) historical involvement in tobacco smuggling, it stipulates that T&T 'shall not be performed by or delegated to the tobacco industry'. This paper explores the rationale for & nature of the TI's effors to influence the ITP & its T&T system. METHODS: Analysis of leaked TI documents and publicly available data; ,investigation of front groups, trademark and patent ownership. FINDINGS: Growing & diverse sources of evidence indicate that the TI remains involved in tobacco smuggling and that TI cigarettes account for around two-thirds of the illicit cigarette market. The TI therefore has a vested interest in controlling the global T&T system aimed to curtail this behaviour. To this end, Philip Morris International (PMI) adapted its pack marker system, Codentify, to meet T&T requirements, licensed it for free to its three major competitors who then collectively promoted it to governments using front groups and third parties including companies claiming to be independent despite clear TI links. PMI also sought to suggest Codentify was independent by selling some parts of its intellectual property on Codentify while retaining others, leaving a complex web of shared interests. In Africa, British American Tobacco used payments to obtain data suggesting its smaller competitor companies were evading taxes and secure influence with tax authorities. Regulatory capture has been enhanced by a public relations effort involving TI funding for conferences, training, research, and international police and anti-corruption organisations. Collectively this has created public messaging and a powerful network of organisations supportive of the TI's misleading postion on illicit. CONCLUSIONS: Governments should assume the TI seeks to control T&T systems in order to avoid scrutiny and minimise excise tax payments and that any T&T system based on Codentify, on intellectual property currently or previously owned by the TI, or being promoted or implemented by companies with TI links, is incompatible with the ITP and would not serve to reduce illicit trade.

Tobacco industry data on illicit tobacco trade: a systematic review of existing assessments.

OBJECTIVE: To examine the quality of tobacco industry-funded data on the illicit tobacco trade (ITT) through a systematic review of existing assessments of industry-funded data on ITT. DATA SOURCES: Papers and reports assessing tobacco industry-funded data on ITT were obtained via searches of 8 academic databases, Google searches and correspondence with ITT experts. STUDY SELECTION: Inclusion criteria identified 35 English-language papers containing an original assessment of tobacco industry-funded data. DATA EXTRACTION: Using a coding framework, information was extracted from the assessments regarding the quality of tobacco industry data. Documents were second-coded, achieving 94% intercoder reliability with all disagreements resolved. DATA SYNTHESIS: Of the 35 assessments reviewed, 31 argued that tobacco industry estimates were higher than independent estimates. Criticisms identified problems with data collection (29), analytical methods (22) and presentation of results (21), which resulted in inflated ITT estimates or data on ITT that were presented in a misleading manner. Lack of transparency from data collection right through to presentation of findings was a key issue with insufficient information to allow replication of the findings frequently cited. CONCLUSIONS: Tobacco industry data on ITT are not reliable. At present, the tobacco industry continues to fund and disseminate ITT research through initiatives such as PMI IMPACT. If industry data on ITT cannot meet the standards of accuracy and transparency set by high-quality research publications, a solution may be to tax tobacco companies and administer the resulting funds to experts, independent of the tobacco industry, who use previously developed reliable models for measuring ITT.