British American Tobacco Benelux - Tackling illicit trade
Combatting illicit trade is a priority to safeguard our combustibles business.
Illicit trade stifles the operation of the legitimate industry, erodes our market share and has wide-reaching negative societal impacts. The economic fallout from COVID-19 may exacerbate this issue as consumers become increasingly stretched and governments seek to raise revenues through increases in tobacco excise duties.
Why it matters
Euromonitor International estimates that 372.2 billion cigarettes per year are smuggled, manufactured illegally or counterfeited*. Illicit trade also cheats governments out of around US$40 billion each year in taxes. This stolen revenue is a lso being used to fund other illegaI activities. In addition, counterfeit cigarettes are not manufactured to stringent product health and safety standards. We are tackling illicit trade head-on so we can stop profits going to illegal activities.
The Anti-Illicit Trade (AITI Policy in our Standards of Business Conduct (SoBC) sets out the controls all Group companies must put in place to stop our products from being diverted into illicit trade channels.
Our anti-illicit trade strategy
We fully support regulators, governments and international organisations in eliminating all illicit tobacco trade. It is vitally important that governments establish workable tax regimes and economic policies that do not encourage illicit trade. Strong border controls and effective laws also help to fight the black market. Our approach to fighting the black market in tobacco includes:
- Effective internal governance and supply chain security,
- Gathering market information on the scope of illegal trade,
- Working with authorities to ensure that appropriate enforcement action is taken,
- Engaging with international bodies like the World Customs Organization to increase understanding of the issue,
- Informing regulators about the impacts of the illegal tobacco trade, and
- Raising awareness of the topic among our employees, business partners and the public.