Abel Ndooka
Jean-Paul Vaslin
The illicit tobacco trade in Africa amounts to 40 billion cigarettes a year and an annual tax loss of around US$10billion.
The Coding and Tracking (C & T) system is designed to prevent this but paper based methods are slow, costly and often inaccurate.
But C & T is revolutionising all that. Africa is joining the rest of the world and moving to the digital version.
Illicit tobacco trade is a global scourge: according to the World Health Organisation(WHO), it represents US$40,5bn in lost tax revenues and accounts for 40 percent to 50 percent of the total tobacco market in certain countries.
In Africa, according to the World Bank, the illicit tobacco trade is at significant levels in several countries, such as Cameroon, where it accounts for 41 percent, Ethiopia with 38 percent, and around 25 percent in Algeria, Nigeria, and South Africa.
To tackle this phenomenon, C & T is a tool promoted on an international scale through the WHO Framework Convention on Tobacco Control (FCTC) and, more specifically, its Protocol to Eliminate Illicit Trade in Tobacco Products, which came into force on September 25, 2018.
It enables the coding and tracking of products (including tobacco, beverages, medicines, and cosmetics) to trace them from manufacturing facilities to the first buyer.
The WHO Protocol (Article 8) on the coding and tracing of tobacco products requires access to detailed information, such as the date and location of manufacture, the name, invoice, order number and payment records of the first customer who is not affiliated with the manufacturer among others.
These details can be aggregated using the C & T solution, linking cigarette packs to cartons and cartons to boxes through a unique code on each pack, combined with digital tracking systems.
Digital cording and tracking offers a global solution that also verifies product authenticity to combat illicit trade and counterfeiting, enhances transparency in manufacturers’ supply chains, ensures compliance with quality standards for consumers, and secures tax collection for governments.
Alongside the digital solution, other C & T solutions exist such as paper-based solutions with stamps and labels.
However, these have limitations in tracking capabilities as they cannot really integrate post-manufacturing information, such as subsequent logistical events for example movement from factory to warehouse and then to the first buyer.
C & T is already implemented within the European Union under the 2014 Tobacco Products Directive (TPD) and in the United Kingdom through the digital solution by Dentsu.
In Africa, C & T is also used in Congo-Brazzaville. Paper solutions are in use in the Democratic Republic of Congo, Morocco, Tanzania, and are being implemented in Côte d’Ivoire. In addition to not fully meeting WHO requirements, the paper solution represents a significant additional cost for local manufacturers.
In fact, in addition to the cost of the stamps themselves, paper solutions (which require a physical paper to be affixed rather than a code printed on the pack at high laser speed) slow down machine speeds, resulting in a 15-20 percent loss in productivity.
As the stamps have to be affixed to the packs, which move along the production lines at a very high speed (250 to 400 packets per minute), it is necessary to slow down the speed of the machines, as applying and affixing the stamps can lead to numerous rejections due to non-confidential compliance of the stamps, jamming of the stamping machines and rejection due to the stamp not being read among others.
Nevertheless, there are a number of positive signs in Africa: all the continent’s countries (except Eritrea, Malawi, Morocco, South Sudan, Somalia) are parties to the FCTC, and many states are in the process of issuing tenders or have already conducted tenders and are now contracting with C & T operators.
For example, Madagascar, after a robust process involving calls for expressions of interest and tenders, selected the digital solution from Dentsu.
Although implementation appears to be slightly delayed pending official contractual finalisation, Madagascar’s choice of a digital solution reflects a rigorous selection process designed to meet international obligations to combat tobacco trafficking, ensure product origin security for consumers, and strengthen state tax revenues.
With two major events this year—the COP11 and Meeting of Parties (MOP4) conferences scheduled for November is shaping up to be an ambitious year for collective efforts to combat tobacco product trafficking, particularly through the implementation of digital coding and trafficking in Africa and around the world. – New African
How to combat cigarette smuggling
Governments in Africa combat cigarette smuggling through a combination of strategies aimed at regulation, enforcement, and collaboration. Here are some key approaches:
Stricter regulations: Many African countries have implemented stricter tobacco control laws, including measures such as plain packaging, advertising bans, and higher taxes on tobacco products.
Enhanced border security: Governments are increasing surveillance and enforcement at borders, utilizing technology and staff training to better detect smuggled goods. This includes the use of sniffer dogs and customs inspection techniques.
Collaboration with international organisations: Many African countries collaborate with international bodies like the World Customs Organisation (WCO), Interpol, and the World Health Organisation (WHO) to improve capacity for tackling smuggling and share intelligence on smuggling networks.
Regional Cooperation: Initiatives among regional bodies, such as the Southern African Development Community), encourage member states to work together, harmonising policies and sharing intelligence to effectively combat cross-border smuggling.
Public awareness campaigns: Governments often engage in public awareness campaigns to educate citizens about the dangers of smoking and the economic implications of cigarette smuggling. This can help reduce the demand for smuggled products.
Tracking and traceability systems: Implementing tracking systems allows governments to monitor the supply chain of tobacco products, making it harder for illicit products to enter the market unnoticed.
Legal frameworks and penalties: Strengthening legal frameworks to impose harsher penalties for smuggling and illegal trade can deter criminals. Countries may also establish special courts to handle tobacco-related offenses more efficiently.
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