MONTEVIDEO – The high taxes that accompany Uruguay’s stern anti-tobacco law are behind a burgeoning black market in cigarettes, according to Akisaqu, an association representing owners of retail kiosks.
A pack of cigarettes on the legal market costs around 80 pesos ($3.29), while on the illegal market it can be bought for 25 pesos ($1.03), Akisaqu president Claudio Orrego told Efe.
“Illegal tobacco products account for 32 percent of the market in Uruguay,” Orrego said. “The third best-selling brand in Uruguay is contraband.”
Black market cigarettes are a $50 million-a-year business, he said.
Black market smokes are sold at neighborhood farmers’ markets in Montevideo and kiosks at the famous Tristan Narvaja Sunday fair, or the less glamorous Piedras Blancas fair, where peddlers show up with “a table and a small box” and sell smuggled cigarettes, most of them coming from Paraguay, according to Akisaqu.
Since 2006 and owing in part to the efforts of then-President Tabare Vazquez, an oncologist, Uruguay has had some of the toughest anti-smoking laws in the world. The legislation prohibits advertisement, promotion and tobacco sponsorship of events, as well as smoking in offices, bars, restaurants and indoor public places.
Vazquez, who won a presidential runoff election on Nov. 30, will return in March as head of state.
As 2015 rang in, the government of outgoing President Jose Mujica enacted the first increase in tobacco taxes since the new law came into effect.
“We support health policies and we appreciate people who do not smoke because those policies protect non-smokers,” Orrego said, while calling it a “mistake” to increase taxes because it only makes black-market cigarettes more appealing.
The Health Ministry extended until Dec. 31 a deadline for stores to adopt new rules allowing promotion of tobacco products with only a sign in black and white that includes brands, prices and a warning of potential health hazards.
Non-compliance can bring fines ranging from $1,000 to $10,000 and repeat offenders could be forced to close.
“Logically, nobody wakes up one day, goes to the kiosk to buy a pen, sees a cigarette pack and becomes a smoker,” Orrego said.
Tax data, published Friday by El Pais newspaper, show that while sales of cigarettes increased in the first nine months of 2014, the level remains far below that of 10 years ago, before tobacco taxes began to climb.
Between January and September 2014, 89.8 million cigarette packs were sold in Uruguay, the highest number since the same period in 2009, when 92.2 million packs were sold.