Cigarette-modifying regulations 'unlikely' to alter illicit tobacco demand

Date: Feb-20-2015The National Research Council and Institute of Medicine suggest that the introduction of new regulations that could modify cigarettes is unlikely to significantly affect the present demand for illicit tobacco.

In the US, up to 21% of the tobacco market is estimated to consist of illicit sales.

A new report mandated by the US Food and Drug Administration (FDA) has investigated illicit tobacco markets both at home and abroad in order to evaluate how these markets react to policies that affect the sale and regulation of tobacco products.

Although tobacco use has fallen worldwide over the past few decades, over 1 billion people still regularly use tobacco products. Illicit tobacco sales represent a sizable portion of the overall tobacco market, and in the US, illicit sales make up 8.5-21% of the total market. That works out at 1.24-2.91 billion packs of cigarettes per year.

The committee reports that this share of the market has almost tripled over the past 20 years.

While the overall decline in tobacco use can be partly attributed to high taxes on products and public health initiatives to get smokers to quit, illicit tobacco markets both take tax revenue away from governments and undermine public health programs.

In the US, the illicit tobacco market largely consists of the bootlegging of tobacco products, whereby cigarettes are purchased legally in one jurisdiction before being sold and consumed elsewhere. Bootleggers most commonly sell cigarettes from Native American reservations or low-tax states in states where tobacco products are taxed highly.

Although large-scale smuggling operations and counterfeit cigarettes can be a problem in other countries, the report states that these practices are largely absent from the US market. Instead, those who are involved in illicit tobacco distribution typically do not have serious criminal records, nor does the trade have any association with violence or terrorism.

Perhaps unsurprisingly, the committee found that illicit tobacco was far more prevalent in high-tax states such as New York, where the market could constitute as much as 45% of all sales. The report classifies 22 states and the District of Columbia as net exporters and 28 states as net importers.

Illicit tobacco was found to be a financial burden to the net importing states. The committee calculates this trade lost them around $2.95 billion in cigarette excise taxes in 2011, with nearly half of this burden being shouldered by New York. In contrast, net exporting states were estimated to gain around $0.82 billion.

Mixed findings in modified cigarette studies

Despite the problems that the illicit tobacco market causes, the committee found that enforcement efforts are hindered by difficulties in communicating effectively across various agencies and levels of government. Additionally, illicit tobacco trade has historically been regarded as low priority, leading to a low risk of detection for bootleggers.

However, some interventions were found to be effective in other countries. Through the use of stamping requirements for cigarettes, enhanced enforcement and public education campaigns, the UK illicit market shrank from 21% in 2000 to 9% in 2013. Similar efforts saw a reduction in Spain from 15% in 1995 to just 2% in 2001.

The worry for the committee was that new regulations for cigarettes could drive people away from legal products and lead to growth within the illicit tobacco market. Several experimental studies concerning how cigarette modification could affect their appeal to customers were examined by the committee as a result.

Overall, modifications such as reducing nicotine levels, ignition capacity and filter ventilation led to mixed findings. The impact on product appeal varied depending on the modification, and while some led to smokers wanting to quit the product, others were tolerated without affecting overall cigarette consumption.

"In the future, non-price regulation of cigarettes - such as product design, formulation, and packaging - could, in principle, contribute to the development of new types of illicit tobacco markets if incentives for such illicit trade are not controlled or mitigated," says Peter Reuter, chair of the committee.

"However, based on the limited available evidence we reviewed, if new regulations were introduced, any increase in the demand for illicit tobacco may only be modest."

As the evidence available to the committee was limited, they suggest that much more research needs to be done. Specifically, individual and criminal cigarette trafficking networks in the US require further investigation, as do the responses of smokers to the permanent loss of specific desirable product features.

Previously, Medical News Today reported on a study that found more Americans die from smoking than previously estimated.

Written by James McIntosh

Courtesy: Medical News Today Note: Any medical information available in this news section is not intended as a substitute for informed medical advice and you should not take any action before consulting with a health care professional.