The Extent of Illicit Trade of Cigarettes in Pakistan [Working Paper Series]

This Working Paper was written by Social Policy and Development Centre in Pakistan. The working paper assesses the illicit market using data collected from a nationwide survey of smokers. The researchers found that the the total extent of illicit trade is 33% which includes counterfeit cigarettes without the trademark owner's authorization, undeclared production by legitimate brand owners, and smuggled brands without graphic warnings and printed retail prices. Illicit trade is more common in rural areas compared to urban areas, at 37% and 25%, respectively. These findings are much lower than industry claims. Furthermore, the market share of smuggled brands is 11.9%, which suggests that illicit trade is largely carried out by domestic manufacturers. The newly implemented track and trace system is beginning to address this and reduce illicit trade among brands covered. Finally, the prevalence of loose cigarette sales, which are prohibited by law, is 35%. The working paper concludes with recommendations for policy makers to continue to raise excise taxes, while implementing evidence-based measures to reduce illicit trade. 

A Policy Brief based on the working paper can be found here.