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Tobacco Industry Rallies Against Illicit Trade, but Have We Forgotten Its Complicity?

Complicity is suspected when companies export billions of cigarettes to countries that do not have a demand for such large volumes.

(Image: Cigarette stack via Shutterstock)

The battle over the introduction of plain packaging has revealed the unscrupulous tactics used by the tobacco industry to influence and counter. Evidence shows a multi-faceted campaign that includes using industry-funded research to falsely claim that plain packaging will lead to a rise in cigarette smuggling and illicit trade. This is despite the fact that these companies have been complicit in this very trade.

There is extensive historical evidence of transnational tobacco companies’ complicity in facilitating the smuggling of their own cigarettes. Complicity is suspected when companies export billions of cigarettes to countries that do not have a demand for such large volumes. The cigarettes find their way onto the black market and are smuggled into countries without paying appropriate duty.

As the tobacco industry wages what is arguably its most virulent battle in recent years against the regulation of its business – including threatening legal action against moves to standardise packaging. Here we provide a snapshot of the big four transnational companies operating in the UK and their relationship with the illicit trade – the list of evidence is not exhaustive.

British American Tobacco

In January 2000, the Guardian newspaper reported that British American Tobacco’s (BAT) own documents revealed how the company had “condoned tax evasion and exploited the smuggling of billions of cigarettes in a global effort to boost sales and lure generations of new smokers.”

Later the same year, BAT also faced serious racketeering charges in Columbia “arising from its involvement in organised crime in pursuit of a massive, ongoing smuggling scheme.”

On July 15 2010, in an agreement between the European Commission and BAT the Tobacco Company paid US$200m to settle smuggling-related issues.

Just last year, in 2014, BAT was fined £650,000 for over-supplying its own product to Belgium.

Imperial Tobacco

Imperial Tobacco, the fourth largest tobacco company in the world, and the company with the largest market share in the UK, has also been under fire.

In 2002, according to Her Majesty’s Revenue and Customs (HMRC), genuine Imperial brands accounted for 55% of the 17 billion cigarettes smuggled into the UK that year. Consequently, when the company was questioned about over-supply to countries notorious for smuggling at an appearance in front of the Commons public accounts committee, to which it claimed ignorance, Imperial’s chief executive was told: “One comes to the conclusion that you are either crooks or you are stupid, and you do not look very stupid.”

Imperial allegedly exported 1.7 billion cigarettes a year to Latvia which was enough for every man woman and child in the country to consume 722 cigarettes a year.

Philip Morris International

In 2004, Philip Morris International (PMI) paid the European Union US$1.25 billion to settle claims over tobacco smuggling.

As part of this settlement, PMI agreed to produce an annual report called Project Star about illicit tobacco in the European Union. An evaluation of Project Star by the Tobacco Control Research Group at the University of Bath found that the report “served the interests of PMI over those of the EU and its member states” and relied too heavily on their own surveys that were not independently verified.


Between 2005 and 2008, a legal battle fought by Gallaher (acquired by Japan Tobacco International in 2007) exposed its own facilitation of tobacco smuggling in which more than 20,000 internal documents between the company and a former Cypriot distributor. During the case the distributor, Ptolomeous Tlais, alleged the company set up a trading “environment” conducive to illegal activity.

Japan Tobacco International

In 2011, the Organised Crime and Corruption Reporting Project (OCCRP) revealed that Russia and the Middle East were the “hub of smuggling by JTI distributors” and that JTI’s own investigators said the company “did almost nothing when faced with reports …”

In 2013, JTI remained under investigation by OLAF, the European Union’s anti-fraud office for these smuggling offences. An enquiry has been made in 2015 to find out if this investigation is still ongoing.

Click here for more information on the tobacco industry, its involvement in illicit trade and its attempts to influence public health policy. And for a full history and documents, visit

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