Beware false ‘profits’ in 2018

January 11, 2018
Alvise_N

January always brings promise of saving a small fortune in the sales. We all like to see prices slashed on our favorite items, and stock up on goods that have been reduced, particularly during tough economic times. After all, a penny saved, is a penny earned.

Consumer thirst for a bargain invariably drives seasonal pricing strategies, but it also fuels opportunists out to make money through peddling fake products. And these operate all year round.

However, savings made through purchase of cheaper illegal or fake goods is often a false economy. It leaves consumers stripped of those protective safety measures that exist in legitimate retail, and exposes them to unregulated and potentially dangerous products. It can also contribute to the funding of more serious crimes.

The Organisation for Economic Co-operation and Development (OECD) estimates that the global trade in fake goods is worth nearly half a trillion US dollars a year. This represents a huge loss in revenue for legitimate business and in tax revenue for governments, and importantly a huge exposure of risk to consumers.  

In relation to illegal trade in cigarettes, Interpol estimates from 84 countries around the world suggest the illegal trade accounts for 11.6% of cigarette consumption, equaling 657 billion cigarettes a year. This is a major economic problem for governments, which are losing a potential $40-50 billion in tax revenue annually.

Philip Morris International is leading the fight against illegal tobacco trade to protect our company, consumers and society. Last year saw a strengthening of efforts by industry and authorities to crack down on rogue trade. In September, I proudly took part in a multi-sector conference organized by the Financial Times in partnership with PMI IMPACT to debate and promote solutions to combatting illegal trade and related crimes. You can check out a published blog on this event here.

2017 also saw a welcome shift in misperceptions that illegal tobacco trade is a victimless crime, with its links to the funding of terrorism and other crimes being further exposed. Notably, this was aired at a hearing of the US Commission on Security and Cooperation in Europe, commonly known as the Helsinki Commission, which is an independent agency of the U.S. Federal Government. You can read more about this here.

So, we start 2018 on a solid footing in efforts to stop illegal trade. We must not give up. We must continue to raise awareness of the problem and strengthen cooperation between industry, authorities and the consumer to STOP: ILLEGAL TRADE, to STOP: IT, for good.  

A significant milestone in the year ahead will be the widely anticipated coming into force of the Framework Convention on Tobacco Control (FCTC) Protocol to Eliminate Illicit Trade in Tobacco Products, which is set to enforce global standards in the fight against illicit tobacco trade. We are keen for this to happen as soon as possible. The strength of the Protocol depends on open participation in the public debate about its terms and implementation, including the participation of tobacco companies, and we support transparency in consultations between governments, citizens and companies.

We will keep you updated on the progress of this on the STOP: ILLEGAL blog.

In the meantime, wishing you a Happy New Year. In 2018, don’t forget to do your bit to end illegal trade and STOP: IT for good by only buying genuine products from legitimate sources. Remember, don’t go rogue!

Alvise Giustiniani

Written by Alvise Giustiniani

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