In a short time, cigarette sales in Panama have fallen to record lows. But this is a truth with a twist. Neither demand nor availability has decreased, only the legal trade.
"Developments in Panama show that such measures, however well-intentioned, lead to huge black markets run by crime syndicates," says Alejo Campos of the organisation Crime Stoppers Bermuda/Latin America.
The illicit trade in cigarettes has increased dramatically in Panama after the authorities slowly raised taxes over a 20-year period. According to the WHO Tobacco Convention, taxes are a key to reducing the use of cigarettes and the ambition in Panama was obviously to reduce smoking. The official figures show success. Cigarette sales have fallen and today only 5.1 per cent of the population buys cigarettes. A decrease from 20 per cent since Panama signed the tobacco convention 2005. But according to the Crime Stoppers organisation regional manager Alejo Campos it is only a superficial chimera.
"In reality, of course, sales have not decreased to that extent" says Alejo Campos. "Today, 90 per cent of all purchases are made on the black market. Tax-free and without appearing in the statistics. A packet of cigarettes from the black market costs half as much for the consumer compared to a taxed packet."
Vejps a new source of income
The same applies to e-cigarettes. Since Panama imposed a total ban on the sale of vejp products in the country in 2022, e-cigarette smuggling and seizures have increased significantly.
"It is a completely uncontrolled market today. Despite the ban, anyone can get hold of the products. We don't know what they contain, it could be nicotine, cannabis or other drugs. Nobody can really control the flow of products that end up on the black market. The ban on sales has opened up a new market for gangs, a new drug market to monetise." says Alejo Campos.
"Everything is connected"
CBLA, Crime Stoppers Bermuda Latin America is a multinational organisation that works closely with cigarette companies, authorities and police to monitor and analyse the overall nature of the illegal trade. It is not only about cigarettes and drugs, but also about trafficking, money laundering and corruption. Everything is connected, says Alejo Campos when he meets the media at a demonstration in Panama City, a few kilometres from the tenth meeting of the WHO Tobacco Convention, COP10.
"Cigarette smuggling, but also illicit e-cigarette trade, are relatively safe sources of income, where profits are high, the risk of being caught is low and penalties are light. But they use the same channels as for other smuggling. The gangs make maximum use of the routes." says Alejo Campos.
Tougher penalties and more lenient legislation
According to Mr Campos, thoughtful legislation is the main way to tackle cigarette smuggling.
"Tougher penalties, better surveillance, that is needed. But it is bans or similar measures that lead to black markets. High taxes don't make people stop smoking, they go for cheaper cigarettes instead. Legislation on tobacco and nicotine should be about public health, but the consequences of overly harsh legislation in this case negatively affect public health by creating really dangerous environments close to citizens."
But if there are such clear links between legislation and the emergence of black markets, why don't politicians react more?
"Now we don't work against politicians, but try to monitor crime and work closely with authorities and officials. We also work a lot with the media through campaigns and advertising. The goal is to draw attention to crime and to get laws that save lives," Alejo Campos told Vejpkollen.
