The impact of eliminating the global illicit cigarette trade on health and revenue

ABSTRACT

Aims  The purpose of this study was to update global estimates of the illicit cigarette trade, based on recent data, and estimate how many lives could be saved by eliminating it and how much revenue governments would gain.

Data sources and methods  Our estimates of illicit market share are based on formal and informal sources. Our method for estimating the effect of eliminating the illicit trade on tobacco related deaths is based on West et al. with some minor modifications, and involves calculating the size of the illicit cigarette trade; the effect of eliminating it on the price of cigarettes and thus on consumption; the revenue governments are losing because of it; and the number of tobacco-related premature deaths that would be avoided if this illicit trade were eliminated.

Results  According to available estimates, the size of the illicit trade varies between countries from 1% to about 40–50% of the market, 11.6% globally, 16.8% in low-income and 9.8% in high-income countries. The total lost revenue is about $40.5 billion a year. If this illicit trade were eliminated governments would gain at least $31.3 billion a year, and from 2030 onwards more than 164 000 premature deaths a year would be avoided, the vast majority in middle- and low-income countries.

Conclusions  The burden of deaths and lost revenue caused by the illicit cigarette trade falls disproportionately on low- and middle-income countries. Eliminating this trade would avoid millions of premature deaths, and recover billions of dollars for governments.