Illicit Tobacco in Papua New Guinea | FTI Consulting

Illicit Tobacco in Papua New Guinea

Economic Consulting

November 1, 2019


Around the world, the illicit trade of tobacco products is prolific. Cigarettes are among the most commonly traded commodities on the black market due to high-profit margins, relative ease of production and movement, and low detection rates and penalties. Papua New Guinea (PNG) has a rate of smoking among the highest in the world and it is widely acknowledged that the illicit trade of tobacco and other goods in PNG has been a significant and growing problem.

While in recent times the PNG Government has made efforts to address the illicit tobacco trade, PNG requires a solid understanding of the existing tobacco market, supply chains and the size of impacts of the problem. In 2018, the Government of Papua New Guinea (PNG) expressed an interest in a comprehensive and independent market study being undertaken to examine the level of illicit tobacco trade in PNG. It sought to develop a better understanding of the magnitude of the problem to enable it to make well informed and economically sound decisions to prevent the illicit tobacco trade.

The purpose of this Study was to provide an independent evidence-based analysis aimed at:

  • Estimating the size of the PNG tobacco market and the proportion of illicit tobacco in PNG
  • Identifying the economic impact that illicit tobacco has on government revenues and the broader national and regional economy
  • Recommending a series of actions that are likely to have the best chance of addressing illicit tobacco in the short term

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