Smuggled cigarettes increasing

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Over 160,000 packs of smuggled cigarettes, worth over VND2.4 billion destroyed by Dong Thap authorities in April 2023.

Dividing goods into small quantities for transportation and clandestine trade

At the Conference to assess he coordination work with industry associations organized by the Standing Office of the National Steering Committee 389 on November 21, 2023, Secretary General of the Vietnam Tobacco Association Nguyen Triet said that authorities have made efforts to prevent and combat cigarette smuggling; conducted public communication to people in smuggling "hot spots" and increased penalty level. This help local legitimate cigarette producers dominate market share, thereby raising revenue to the State budget and supporting anti-smuggling of cigarettes.

The anti-smuggling work of the authorities showed that on the waterway route, smugglers often use fishing boats, cargo ships, and speedboats to transport smuggled cigarettes. On the land border, smugglers divide cigarettes into small quantities, take advantage of the dark and early morning, and hire someone to carry the goods across the border, then use motorbikes or hide smuggled cigarettes into legal goods, on buses, trucks, 4-7 seater cars to transport them to domestic market. The smugglers also deliberately declared wrong names of goods and hid smuggled cigarettes in declared goods to illegally transport across the border. Worryingly, a number of famous branded cigarettes are counterfeited from Cambodia and brought to Vietnam, causing serious impacts on consumer health, operation of local businesses and tax revenue loss.

In the local market, the public selling of smuggled cigarettes has decreased but still occurs. Business stores often divide and hide cigarettes in households, grocery stores, coffee shops, and mixed them with domestically produced cigarettes and sell them at customers’ orders.

Mr. Nguyen Triet said that on the one hand, smuggled cigarettes cause a loss of thousands of billions of VND to the state budget each year and this loss will continue to increase if smuggled cigarettes are not controlled. On the other hand, smuggled cigarettes do not comply with regulations on printed health warnings with images, are not limited in tar concentration (maximum tobacco tar content), nicotine in cigarette smoke, and are not subject to any management of product quality and packaging. The two factors have created a huge competitive advantage for smuggled cigarette products compared to domestically produced cigarettes. In addition, the increase in smuggled cigarettes will affect domestic manufacturers, causing lose their jobs and because legal cigarette output will decrease.

Besides traditional cigarettes, new generation tobacco products (electronic cigarettes, heated cigarettes...), although there is no legal framework for management, these cigarettes have been penetrating the Vietnamese market by many different ways (carry-on goods, border-trade, smuggling) are sold widely and are surging.

It can be seen that, even without a management mechanism, new generation cigarettes still appear due to consumer demand and are increasingly growing. These products are also uncontrolled in terms of ingredients and quality, posing many potential risks to the health and safety of users.

Strengthening regular and unexpected inspections

The above situation shows that the fight against smuggled and counterfeit cigarettes is still extremely arduous, complicated, and long-term, and it is necessary to further strengthen solutions to combat smuggling and trade fraud of smuggled cigarettes.

Every year, more than 10,000 violations are seized and around 8 million packages of smuggled cigarettes are confiscated. However, besides the encouraging results in the anti-cigarette smuggling, it is also necessary to recognize the reality that cigarette smuggling activities are still very complicated and are becoming more and more sophisticated, difficult to control.

To increase the effectiveness of fighting against smuggling and trade fraud in tobacco products, the Vietnam Tobacco Association proposes authorities such as Border Guards, Customs, and Police to strengthen inspection, control, and fight against smuggling on border lines. Domestically, the Market Surveillance force, in addition to checking cigarette sales points during peak periods, considers this a regular and unscheduled job.

“Regarding tax policy on tobacco products, the authorities need to consider very carefully and comprehensively assess the economic, social impacts, consider the business conditions of operators in the tobacco industry, with fairness between product segments to create a healthy business environment and equal development conditions among businesses, avoid creating greater disadvantages between legally produced cigarettes and smuggled cigarettes," Mr. Nguyen Triet added.