The percentage of contraband cigarettes smoked in Mexico has skyrocketed in the last decade: from 2% in 2011 to almost 19% of the market in 2021, the Confederation of Industrial Chambers of Mexico (Concamin) said in a report.

“Illegal cigarettes in Mexico, 10 years lost” was presented on Monday to coincide with the national day for combating contraband and crime.

The report says 18.8% of the country’s cigarettes are contraband, quoting data from Oxford Economics, and explains that while some of the contraband is illegally imported, the majority is produced in Mexico. Domestic production has grown in the last three years and now represents two thirds of the contraband market, the report said.

The black market for cigarettes costs the treasury around 13.5 billion pesos (about US $670 million) per year due to tax evasion, the report claimed. It highlighted unfair competition for legitimate sellers and said the black market was helping to fund criminal activities which negatively effect public security. However, it said the illegal cigarettes do comply with some health regulations.

Concamin explained that two thirds of illegal cigarettes do not carry the security code which proves compliance with tax regulations. “Illegal cigarettes are a multidimensional problem that has become sophisticated in recent years. Although before there was no local production of illegal cigarettes, today we can see in the market many brands do not have the security code that the government requires through the [tax regulator] SAT. This dynamic represents two thirds of the problem,” it said.

According to the latest health alert issued by the Federal Commission for Protection Against Health Risks (Cofepris), there are more than 245 brands of illegal cigarettes in Mexico, mainly of Chinese origin. The brands Win and Brass stand out as leaders in the contraband market, with 6.7% of total cigarette sales.

Mexico News Daily