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Contraband cigarettes are seized by Dong Thap Customs in coordination with the police agency. Photo: Van Than

Contraband cigarettes

According to the Vietnam Tobacco Association, cigarette smuggling has resumed since the end of 2021 and the beginning of 2022 after the period of social distancing.

From the perspective of a cigarette manufacturer, greatly affected by contraband cigarettes, Mr. Vu Duy Hoa, Deputy Director of Saigon Tobacco Company, said that during the pandemic, it was difficult to smuggle cigarettes into Vietnam, so the company recorded a sharp growth in cigarette consumption of 15-17 million packs/month.

However, recently, the domestic tobacco consumption market has declined.

"If during the pandemic, Hero cigarettes cost VND25,000-30,000 per pack, Jet VND40,000, but now Hero is priced at VND15,000/pack, Jet VND18,000 per pack. Thereby, it can be seen that contraband cigarettes have greatly affected the production of domestic enterprises," said Mr. Hoa.

Regarding solutions to prevent smuggled cigarettes, according to Mr. Vu Duy Hoa, there are many that say cigarette manufacturers need to improve the quality and meet the consumers’ taste to compete with contraband cigarettes, but this is not easy. Because, Mr. Hoa said, domestically produced cigarettes must pay VAT and special consumption tax. If the domestic cigarettes are sold at VND14,000/pack, the tax will be VND7,000. Meanwhile, Jet contraband cigarettes cost VND18,000, if they are taxable, they will be priced at VND36,000 /pack. Thus, the domestic enterprises cannot make quality products and sell them for VND18,000.

A representative of BAT Company, a foreign-invested enterprise, said that smuggled cigarettes bring high profits and are easy to attract people. For example, a pack of contraband Jet cigarettes can bring a profit of about VND7,000 - 8,000, three times higher than that of legal tobacco products in the same segment.

More seriously, cigarettes that are illegally imported into our country have an unknown origin, are not controlled for harmful substances, causing serious harm to consumers' health, and causing insecurity. Smuggled cigarettes are not even required to make health warnings according to regulations.

Many new types of smuggled cigarettes

New generation cigarettes are entering the market. According to market survey data, it is estimated that the use of new generation cigarettes in 2021 accounted for 1% or about 280,000 products, of which 90% are e-cigarettes, the rest are heated tobacco products.

All new generation cigarettes are smuggled across borders or traded on e-commerce sites, causing a loss of tax revenue to the state budget, affecting domestic enterprises.

Mr. Pham Duc Chinh, Director of the Market Surveillance Department (Long An), said from 2021, the Long An Market Surveillance Authority seized over two million packs of smuggled cigarettes. Besides smuggled cigarettes, fake 555 and Craven cigarettes are problems at the border.

The smuggled cigarettes are mainly illegally imported from Cambodia to Vietnam for consumption. More seriously, these cigarettes are unknown of origin and contain harmful substances, causing serious harm to consumers' health.

In addition, there has been a situation of transporting smuggled cigarettes from Cambodia to Vietnam, but the packs are stamped in Vietnamese to deceive the authorities.

According to the leader of the Departments of Market Surveillance of Long An and Dong Thap provinces, the market surveillance agencies still have difficulties in handling and seizure of smuggled cigarettes because most of the owners are absent.

Therefore, these units have proposed to the National Steering Committee 389 to request the competent authorities to consider shortening the processing time for infringing goods for cases where the owner cannot be identified, instead of a one-year wait.

In addition, objective factors such as the complicated border terrain with many crossings, increasingly diverse and sophisticated transportation methods, or the exploitation of border residents to transport contraband goods have also caused a lot of difficulties for the authorities in controlling the situation. The cigarettes traffickers often bring less than 1,500 packs per transport to avoid criminal sanctions.

Because the profit from contraband cigarettes is too high, the smugglers use many tricks. To effectively combat illegal cigarettes, we need strong sanctions and a system of mechanisms and policies and continue to improve relevant documents.

In addition, anti-smuggling units on the border suggested that there should be mechanisms and policies to attract investment on the border to create favorable conditions for people to have income and not to abet smuggling.

Cigarette smuggling is still problem on the Quang Tri border

At the same time, it is recommended that the Tobacco Control Fund should extract a fund and coordinate with Local Steering Committees.