Cigarette counterfeiting involves the production and distribution of products bearing a trademark without the approval of the trademark owner. Both the tobacco industry and World Custom Organization estimates suggest that only 2% of illicitly traded cigarettes are counterfeit. The other 98% come from cigarettes that were manufactured legally in one location but smuggled somewhere else. Transnational tobacco companies are the catalysts for this trade, as it allows the companies to circumvent tobacco taxation.

Tobacco companies often argue that growth in illicit trade will result from tax increases, packaging changes, and bans on cigarettes. Independent studies have found that these policies do not cause the illicit market share to increase.

The Proof: No Increase in Illicit Trade

Cigarette prices vs. illicit market share