Keith Humphreys checks in on shady trading practices for cigarettes:
The global black market in tobacco is estimated to supply 11.6% of the world’s consumption, a startling 650 billion cigarettes a year. And there are two components to this market that have drawn the particular scrutiny of law enforcement: fake cigarettes and tax avoidance. The reason why fake cigarettes are big business will be obvious to anyone who tunes in to Mad Men. Cigarettes have arguably been marketed internationally more effectively than any other American product. The resulting worldwide recognition of the Marlboro Man, Joe Camel et al. means that hundreds of millions of smokers are willing to pay a premium for famous Western brands. This has created a lucrative opportunity for criminals – overwhelmingly based in China — to repackage over 100 billion cheap cigarettes a year as marquee Western brands. While not enthusiastic about the amount of revenue being generated by fake cigarettes, U.S. policymakers have been even more concerned about smugglers avoiding taxes for selling genuine cigarettes.
The Dish 