Science

Social media, street vending… the new face of the cigarette trade in France

Operations follow each other and are similar to each other. Hardly a week goes by without an article about a new campaign against illicit cigarette trafficking appearing in the regional press. In Finistere Brest on Monday, November 14, customs officers seized 550 rounds of ammunition on board a car. On the night of 22/23 October, between Ariège and Haute-Garonne, Frouzen’s customs brigade intercepted 972 blocks of cigarettes (that is, 9,720 packs). In mid-October in Ayr, the gendarmes got their hands on 7200 blocks of counterfeit cigarettes and 135 kilograms of tobacco, as well as 250 grams of cocaine and more than 13 kilograms of cannabis resin, liquidating the international network that developed between the department and Belgium. At the beginning of the month, the Palaiseau research team in Esson seized 1,500 cartons of counterfeit cigarettes, as well as 212 kg of cannabis resin and more than 300,000 euros. This increase in customs activity can be attributed, in part, to the smuggling of cigarettes from an increasingly diverse range of sources. The parliamentary report estimates consumption at 14 to 17%, and according to the KPMG dossier financed by the tobacco companies, 35%, but the evolution of this phenomenon is still very difficult to quantify.

As for customs, the numbers certainly show growth. Between 2020 and 2022, 1,046 tons of tobacco were seized, representing about fifty daily cases reported in France. At the end of August, 464 tons of cigarettes were intercepted, while in 2021 there were only 402. A paradoxical increase, because tobacco consumption in our country has been in free fall since the beginning of the century. Legal cigarette sales fell 57% between 2000 and 2020.

Social media and street vending

This decline is largely due to increases in taxes on tobacco products, the most recent increase of which took place between 2017 and 2019, resulting in a reduction in consumption of up to 24% in 2019. This does not prevent smoking in France from being high compared to smoking in other countries. European Union, although sales are relatively low. How can these low sales be explained if tobacco consumption remains relatively high? Part of the explanation can be found on the side of the illegal market: according to the French Observatory on Drugs and Addiction Trends, in 2018 a fifth of consumers (22%) did not buy cigarettes through tobacco sellers.

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This phenomenon has increased in recent years. The lockdown has pushed some smokers to use parallel means, such as primarily social media such as Snapchat or Facebook groups, or street vendors. This “roadside sale,” which has become very prominent in the media in several cities in recent months, is still “limited to a few areas of city centers,” the OFDT report explains, or at some subway exits. Part of this consumption is driven by an economic argument: the rise in price of a pack of cigarettes—more than 10 euros—is leading some less affluent smokers to turn to fakes—the price ranges from 3.5 to 5 euros per pack. “We also shouldn’t forget, albeit to a lesser extent, the opportunity effect: consumers buy parcels from street vendors because it’s more convenient or faster,” explains Mathieu Zagrodsky, a national security researcher and author of a study funded by the tobacco company Philip Morris on the illicit cigarette trade for the Political Innovation Foundation.

“Quite a lucrative criminal activity”

Moreover, traffickers in cigarettes are less punishable by law than traffickers in other substances. “The illegal sale of cigarettes is a fairly lucrative criminal activity because the criminal risks that drug traffickers face are relatively low compared to the risks associated with selling drugs,” explains sociologist David Weinberger, a drug trafficking specialist and researcher associated with Iris . While the punishment for drug trafficking can be up to twenty years of criminal imprisonment and a fine of 7.5 million euros, the punishment for cigarette trafficking is less, although it is increased. This can go up to ten years in prison, when fraudsters face fines ranging from 2,000 to 500,000 euros.

Less punishable than drugs, cigarette trafficking is a long-standing organized crime ring, enriching both the “French connections” and the Italian mafias. Today, the illegal market is divided into three main categories. First, “counterfeit cigarettes aimed at illegal imitation of trademarks sold in France,” the researcher continues. Then there are “cheap whites”, or “illegal whites”, which are cigarettes with trademarks registered in certain countries but not in the rest of Europe. … Finally, smuggled, that is, genuine cigarettes that are bought in a country with lower taxation, which then cross the border, exceeding the legal limit.”

More organized networks

More diverse, current networks are also better organized than yesterday’s. “Traditionally, many smuggled cigarettes came from the Maghreb and were illegally distributed for resale in France,” says Mathieu Zagrodsky. “Since 2019, the fake has partially moved to Europe, with factories in Poland, Ukraine, Armenia or the former Yugoslavia. More and more production points also created in Belgium and the Netherlands.” Plants are closer to France when they are not installed directly on the territory. In mid-September, the village of Poincy in the Seine-et-Marne became the scene of a customs operation to dismantle an underground cigarette factory. A large warehouse of 400 square meters housed 28 machines designed to create illegal production.

Therefore, part of the French consumption must be associated with the parallel market, the assessment of which remains particularly vague. As noted in a parliamentary report written by MPs Eric Werth and Zivka Park, various studies “lead to estimates that it is between 15 and 30% of sales of total sales.” At the same time, KPMG has been running an evaluation funded by tobacco manufacturers, including sector giant Philip Morris, for a decade now. According to the latter, in 2021, more than a third (35%) of cigarettes consumed in France were purchased outside the legal circulation. However, the methodology of these studies is regularly challenged, in particular by consumer associations. “We also have to take into account the fact that customs exemptions do not necessarily apply only to the French market. Some of the seized cigarettes are also just on the way,” said François Topart, advocacy officer at the National Committee on Tobacco Control.

3 billion lost by the state

As a public health problem, smuggled cigarettes also cause financial damage to the state in the amount of 2.5 to 3 billion euros per year, including 500 million euros in unpaid VAT. Thus, the executive branch demonstrates its desire to fight this parallel market. During the annual convention of the Tobacco Confederation, which took place on 20 and 21 October in Paris, Minister of Public Accounts Gabriel Attal explained that he was “determined to fight relentlessly against illicit tobacco trafficking.” Under the plan, due to be presented in more detail in early December, Customs will be equipped with “9 new next generation mobile scanners”, bringing the number to “20 by the end of 2025”.

“Two industrial scanners” will be added to the device to “improve the control of postal parcels and express shipments.” “City anti-tobacco teams” like the one already set up in Lyon “will attack criminal organizations and carry out strike operations.” Finally, “the cyber customs unit will be decentralized and expanded to local investigative services.” Challenge: Better track illegal sales on social media so nothing slips through.

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