HONG KONG. In a revelation that should make an integral part of the duty free tobacco’s lobby to preserve their sector from abolition, it has emerged that nearly 1,400 mainland visitors have been arrested for selling illicit – and mainly fake – cigarettes in Hong Kong in the first 10 months this year.
This is four times the number of arrests in the same period last year. The South China Morning Post revealed that about 80% of the contraband cigarettes seized were fakes rather than cigarettes smuggled into Hong Kong to avoid paying duty.
The newspaper quoted David Fong Tai-wai, acting senior superintendent of the revenue and general investigation bureau at Customs, who warned that the quality of counterfeit cigarettes, in tar and nicotine content, was not supervised.
Fake cigarettes are sold for as little as HK$7 (US$0.90) a packet in Hong Kong’s streets compared with HK$12 (US$1.55) for a duty free pack.
The number of cigarettes seized rose +61% to 12.6 million in the first 10 months of this year.
“Gangs are apparently taking the opportunity of the relaxed restrictions for mainlanders to visit Hong Kong to recruit more mainland visitors to sell illicit cigarettes,” Fong said.
Note: One of the strongest selling points of the duty free business is that it can be relied on to sell bona-fide, quality goods. This is particularly important in markets where fakes are commonplace, including much of Asia. Fake cigarettes, whisky and Cognac are all found regularly throughout the region. Any abolition of a legitimate channel for legitimate goods (duty free tobacco sales) is therefore adding consumer risk.
