In a short time, cigarette sales in Panama have fallen to record lows. But that is a truth with modification. 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 Crime Stoppers Bermuda/Latin America.
The illicit trade in cigarettes has increased dramatically in Panama since the authorities have been steadily increasing taxes over a 20-year period. According to the WHO Tobacco Convention, taxes are a key to reducing cigarette consumption and the ambition in Panama was obviously to reduce smoking. The official figures show success. Cigarette sales have declined and today only 5.1% of the population buys cigarettes. A decrease from 20% since Panama signed the the tobacco convention 2005. But according to Crime Stoppers organizations regional head Alejo Campos it is only a superficial chimera.
"In reality, of course, sales have not decreased to that extent" says Alejo Campos. "Today, 90% of all purchases are made via the black market. Tax-free and without being visible in the statistics. A pack of cigarettes coming from the black market costs half as much for the consumer compared to a taxed pack"
Vejps a new source of income
The same applies to e-cigarettes. Since Panama banned 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. At the same time, we don't know what they contain - it could be nicotine, cannabis or other drugs. No one 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 the gangs, a new drug market to make money from." says Alejo Campos.
"Everything is connected"
CBLA, Crime Stoppers Bermuda Latin America is a multinational organization that works closely with cigarette companies, authorities and police to monitor and analyse the state of illicit trade in general. "It's not just about cigarettes and drugs, but also about trafficking, money laundering and corruption. Everything is connected, says Alejo Campos when he meets the media during a demonstration in Panama City, a few kilometers from the tenth meeting of the WHO Tobacco Convention, COP10.
"Cigarette smuggling, but also the illicit trade in e-cigarettes, are relatively secure sources of income, where the profits are high, the risk of getting caught is low and the penalties are small. But the same channels are used as for other smuggling. The gangs make maximum use of the routes." says Alejo Campos.
Tougher penalties and softer legislation
According to Alejo Campos, the main way to tackle cigarette smuggling is through well thought-out legislation.
"Tougher penalties and better monitoring are 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. Tobacco and nicotine legislation is supposed to be about public health, but the consequences of overly harsh legislation in this case have a negative impact on public health, by creating really dangerous environments close to citizens."
But if the links between legislation and the emergence of black markets are so clear, 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 get laws that save lives," Alejo Campos tells Vejpkollen.
