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Illicit cigarettes are taking over thanks to EU COP-out

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By Nick Powell in Panama

The World Health Organisation’s conference on tobacco control has entered its second week in Panama by morphing from a COP (Conference of Parties) into a MOP (Meeting of Parties). In this guise, delegates include clinicians, health ministry representatives and NGO activists but oddly no tax experts or officials from finance ministries, no consumers and no industry representatives. They are discussing how to tackle the illicit trade in tobacco products but are handicapped by an unwillingness to recognise how the problem was caused, writes Political Editor Nick Powell.

The global trade in counterfeit and smuggled cigarettes has increased to unprecedented levels. When confronted with unaffordable prices, smokers are not quitting, instead they’re buying unregulated and untaxed cigarettes that have become a major threat to public health. The World Health Organisation states that criminals have cornered 11% of the market, which is surely a gross underestimate achieved by ignoring the fact that official statistics tend not to capture black market activity. Sometimes that’s deliberate, to avoid recognising the unintended consequences of policy decisions.

Conference delegates were congratulating the host country last week, when angry tobacco growers protested at how regulation is ruining Panama’s traditional premium cigar business. But perhaps by now they’ve had the chance to take a look at what’s really happening. They would have been brought up to speed faster if COP hadn’t excluded experts who had travelled to Panama but would have told them what the WHO did not want to hear. 

Lindsey Stroud from the United States observed that in Panama it’s hard to buy cigarettes in stores but it’s easy on the street. As Director of the Taxpayers Protection Alliance Consumer Centre, she provides data and analysis on consumer products. Her organisation estimates that between 85% and 92% of cigarettes in Panama are illegally sold. E-cigarettes and innovative products are banned, so all such devices sold in Panama are illicit. 

Dr. Diego Joaquín Verrastro from Argentina is spokesperson for the Latin American Network for the Reduction of Harms Associated to Smoking. He noted that Panama’s official statistics claim only 7% of the population smoke but that’s due to the lack of monitoring of a mostly illicit market.

Panama has become a major hub for shipments of illegal cigarettes to a region of Latin America stretching from Mexico to Ecuador. An investigation in 2021 uncovered a Panama-based network of shell companies sending huge amounts of Chinese cigarettes from the Colòn Free Trade Zone to Latin American countries where there is no legal market for them.

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This made Panama a surprising choice of location for the conference but European delegates could have found a similar example much closer to home. The annual loss of tax revenue caused by the illicit cigarette trade in the EU has reached €20 billion, with France alone losing over €7 billion. It has, following a 50% cigarettes’ price hike, the biggest black market for cigarettes in Europe, distributing some 17 billion cigarettes a year.

Children are targeted and adult smokers who might otherwise switch to much safer smoke-free nicotine products opt for counterfeit and contraband cigarettes, sold for less than half the price of the highly taxed legal product.

It’s no wonder that European Commission delegates to COP and MOP, together with Belgian representatives of the EU Presidency, tried their best to continue ignoring that it’s pro-tobacco harm reduction European countries – like Sweden, Norway, or Iceland - that are on the verge of becoming cigarette-free. It’s in anti-tobacco harm reduction and high smoking incidence countries, like France and Belgium, where illicit cigarettes’ share of the market is going through the roof.

There has been a monumental failure in tobacco control’s logic that making cigarettes unaffordable and banning innovative products would accelerate a decline in smoking prevalence. It’s not only 

evident in France, where the number of smokers, one of the highest in Western Europe, has barely changed in 10 years; it is also evident in other countries like Belgium, where banned better alternatives and high taxes have led to fast growth of illicit cigarettes. 

In Panama, the lawyer and author Juan José Cirión argued that on this issue the similarities between advanced and low-income countries are more important than the differences. He’s campaigned against the ban on vaping products in Mexico and sees certain guaranteed outcomes from such prohibition.

“Prohibition means that the black market thrives, leaving no consumer safeguards, no tax revenue, no data collected, no public health strategy and no public health gains”, he said. “Organised crime and cartels take over and the worst part is that human rights are violated by denying people their freedom to choose”.  

Examples are to be found around the world. Konstantinos Farsalinos, a doctor and public health expert from Greece, pointed to the absurdity of the WHO congratulating Türkiye on fully implementing the MPOWER tobacco control strategy. Smoking is increasing in Türkiye, despite or perhaps because of the six MPOWER measures set out by the WHO. They range from the bluntly prescriptive (“raising taxes on tobacco”) to the hopelessly vague (“offering help to quit tobacco use” -with no encouragement to promote safer alternatives to smoking).

Dr Farsalinos also noted how hostility to harm reduction products, such as electronic cigarettes, has worked in India. A small market, that was legal although unregulated, has been replaced by a huge, 100% illegal black market. As this trade falls outside any official statistics, the strategy has not officially failed. Dr Rohan Andrade De Sequeira, from Mumbai, commented that a prohibition strategy works well for any bureaucrat who just collects data.

Maria Papaionnoy, who campaigns in Canada for vaping as a much safer alternative to cigarettes, deplored this bureaucratic approach. “They have lost compassion, the ability to say that we will help you the way that you need to be helped. The WHO’s only tactic is shaming people. They’re self-imposed world experts who don’t even understand what they’re fighting for”. 

Despite the WHO’s best efforts, critical experts did sometimes manage to speak to delegates to the conference in Panama. Filip Tokić from Croatia said he had asked a delegate from an EU country why he vaped, “because it’s much safer than smoking”, came the replied. That was a breach of the WHO -and increasingly EU- official line, which brackets consuming any nicotine product with smoking tobacco. 

The same delegate added that “we don’t want to talk about Sweden”, which was very much in line with the approach of the WHO and the European Commission. The traditional Swedish tobacco product snus, which produces none of the smoke that causes cancer, has enabled that country to achieve the lowest percentage of cigarette smokers anywhere in the EU -and reach the WHO target of less than 5% of the population. Snus is banned in the rest of the European Union.

Sources close to EU institutions are very confident that the shambolic missions to COP and MOP by the European Commission’s DG Sante’s will now be scrutinised. Member states and Parliament will want to find out if DG Sante eurocrats went beyond their mandate. Most importantly, they are puzzled by DG Sante’s systematic failure to showcase European countries’ successes in driving down smoking, thanks to EU-based production of non-combustible tobacco and nicotine alternatives, enabled by decades of EU-led R&D investment. 

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EU Reporter publishes articles from a variety of outside sources which express a wide range of viewpoints. The positions taken in these articles are not necessarily those of EU Reporter.

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