Cigarette manufacturers' non-compliance in the fight against illicit trade

The industry has failed to comply with European regulations on the traceability of tobacco products, as shown by a recent investigation by researchers and published in the journal Tobacco Control. Not taken seriously by manufacturers, the tracking and tracing system initially responded to the need to combat the illicit trade in tobacco products.

On 20 May 2019, the EU-wide tracking and tracing system for tobacco products became operational, with a one-year transition period to allow for a gradual installation of the system. Researchers collected 5,727 packs in Lithuania between September 2019 and September 2020, a period between the transition period and the final and mandatory implementation of the system, in order to verify the proper application of the regulations by manufacturers.[1].

The tracking and tracing system, a tool to combat illicit trade

Following the European Tobacco Products Directive and after a long process of negotiations, a system for tracking and tracing tobacco products became operational in May 2019. In particular, it requires manufacturers to affix a unique identifier to each package, making it possible to trace each packet, cartridge and other packaging from the time it leaves the factory to the retailer. This process allows authorities to determine at what point in the supply chain the tobacco packet leaves the legal network. In addition, the European system requires packets to contain a security device, made up of visible and invisible elements, so that the authenticity of the products can be established.

European regulations not applied by manufacturers

Of all the packs collected by the research teams during the transition period, none had a unique identifier. Between June and September 2020, after the end of the transition period, 32% of the packs collected still did not have unique identifiers. While a large proportion of these packs were identified as illicit, 5.8% of the legal packs found after the transition period did not have a unique identifier either, contrary to European regulations. Four months after the deadline, researchers found non-compliant cigarette packs. For the authors of the study, these results demonstrate that the tobacco industry is not implementing the tracking and tracing system.

The influence of industry in illicit trade and the fight against illicit trade

This delay in compliance by the tobacco industry may also demonstrate that the tobacco industry's public statements to combat illicit trade are in reality only a facade of self-interest. Studies show that cigarette companies remain the primary beneficiaries of contraband, and that 98% of illicit tobacco products consumed initially come from the factories of legal manufacturers. Furthermore, there is also considerable evidence that The tobacco industry is still involved in organizing and facilitating the international illicit trade in its own products. While the establishment of a tracking and tracing system is an essential tool for combating illicit trade in tobacco products, the WHO Protocol recommends that it be completely independent of cigarette manufacturers. However, the European directive is not in line with the protocol because it currently allows tobacco manufacturers to choose the companies that collect data on the storage and movement of tobacco products. The directive also allows them to choose the external auditors mandated to audit them.

FT