A shortage of raw tobacco, manipulated prices, and lack of enforcement measures will help illicit cigarettes to take over more than 50% of the market next quarter.
Pakistan Tobacco Company (PTC) spokesperson Sami Zaman warns that illicit cigarettes will take over the market in the next quarter with more than 50% market share, reported The Express Tribune.
“Taxes are not paid on smuggled cigarettes, that’s why they are cheap; they also do not have the mandatory health warnings as per laws of Pakistan and offer attractive flavors that are even sold in loose packaging,” Zaman added.
He also criticized health advocates for remaining silent about illicit cigarettes and illegal cigarettes produced in the nation.
There is a shortage of raw tobacco in Pakistan currently, pushing up tobacco prices. The industry had previously announced it would purchase 85 million kg but only 72 million kg is available. Zaman highlighted the fact that tobacco is the only crop legally protected, but the lack of an enforcement mechanism to prevent unlawful tobacco purchases has led to price manipulation. In addition, price uncertainty has restricted Pakistan’s exports of processed tobacco. PTC exports processed tobacco to cigarette manufacturers in many countries.
Zaman added the cigarette industry anticipates exports of 42 million kg, which would bring in around US$100 million in the current fiscal year.