(Jamaica Observer) Organised criminal gangs and drug dealers are behind the growing multimillion-dollar trade in illicit cigarettes locally, the Sunday Observer has learnt.
According to the authorities, the drug lords’ transition is driven by their desire to avoid the harsh penalties associated with narcotics trafficking, even though breaches of the Trade Marks Act can attract huge fines and prison time.
In addition, the trade in illicit cigarettes is said to have lower safety risks.
“What we are really seeing in the illicit trade is tantamount to organised crime,” said Michael Bernard, managing director of Carreras, the sole legal distributor of Craven A cigarettes in Jamaica.
“We believe it is structured and it has the potential for bringing in very, very significant income to the players,” he told the Sunday Observer. “We don’t believe, for example, that the major players are the little traders operating a small shop or wholesale. We believe it is basically planned, controlled and organised by people who have the capacity to, in some instances, engage with external suppliers.”
Bernard spoke to the Sunday Observer following a record $300-million worth of illicit Craven A cigarettes was discovered last week in the country. Carreras immediately advised the public of the find and the potential legal actions which may be taken against those involved in the illegal trade.
Last month, the Jamaica Customs Contraband Enforcement Team seized a 40-foot container with over 400 cases of illegal cigarettes valued at $120 million. At that time, it was disclosed that the container belonged to a well-known area leader.
The estimated world market for the illicit trade is 390 billion sticks per year, representing six per cent of total world cigarette consumption, according to director of corporate and regulatory affairs at British American Tobacco (BAT) Michael Prideaux. An estimated 44-50 million sticks are illegally imported and distributed in Jamaica.
The cigarette market in Jamaica is also one of the most lucrative in the region, according to Carreras. This makes Jamaica a prime target for not only local ‘dons’ but international crime syndicates which can benefit from the high margins on the product.
Last year, BAT, owners of Carreras, recorded over £14 billion in revenue from the sale of the products. The Americas, of which Jamaica is a part, contributed 27 per cent of that amount, the largest share of the total for the company.
Carreras, which holds 99 per cent of the legal market through brands Dunhill, Matterhorn, Craven A and Rothmans, reported sales of 757 million sticks last year, even with the high incidence of counterfeit brands on the market. The contraband market accounts for 44-50 billion sticks, a loss to the formal system of approximately $1 billion in taxes and other duties each year.
A former law enforcement official who now targets the illicit cigarette trade said the value of the industry to the crime lords cannot be underestimated. He said that given the success of local and international law enforcement officials in disabling aspects of the cocaine trade locally, the cigarette market provides an efficient and low-risk means of diversifying the revenue base of the crime lords.
“Cocaine and gold don’t carry the value that cigarettes do,” he said. “This market is always going to be an attractive market for those who operate in the illicit trade.”