Results from a large study released by the National Institute of Public Health (INSP) in Mexico City today show that the scale of illicit cigarette trade in Mexico is much lower (8.8%) than what the tobacco industry claims (17%). The study used two separate methodologies: information collected from littered cigarette packs and through a survey of smokers in eight large agglomerations across Mexico. The cross-validation of these two methodologies and the large scale of the study make it the most comprehensive and rigorous study of illicit cigarettes ever conducted.
The study finds some variation in illicit cigarette share among the cities. Because cigarette prices did not differ between the cities, the researchers conclude that factors other than price, such as weak law enforcement, must have affected the levels of illicit cigarette trade in Mexico. Results of the INSP study also show that prices of illicit cigarettes are at 65% of the legal cigarette price, which makes illicit cigarettes more affordable compared to legal cigarettes. The illicit trade in tobacco harms public health by making the products available at lower prices, which can increase consumption and youth initiation. Illicit trade also results in losses in government revenue.
As the research reveals, illicit trade is clearly not a reason to slow down on increasing tobacco excise taxes in Mexico. Tobacco tax has not been increased in Mexico for many years , and the impact of the last tax increase has been greatly eroded by inflation and growth in household income. Therefore, Mexico should start by immediately indexing tobacco taxes to inflation and income growth to maintain the impact of taxes on public health and the economy. Moreover, the government should also significantly raise tobacco excise taxes to prevent cancer and save lives with a goal of reach the World Health Organization recommendation of excise taxes comprising at least 70 percent of retail price.
The American Cancer Society and the Institute for Global Tobacco Control (IGTC) at Johns Hopkins, with funds from the Bloomberg Philanthropies, sponsored the research. Researchers from INSP, the American Cancer Society and IGTC collaborated closely on the research, with strong support from Mexico’s National Commission against Addictions (CONADIC) and the Pan American Health Organization (PAHO).
Click here to learn more about the study results (in Spanish).
The study infographic is available here (in Spanish).
Click here to learn more about the illicit trade in tobacco products.