STUDY TO ASSESS THE VOLUME OF ILLICIT CIGARETTE BRANDS … · 2019-06-06 · The study looks to assess the volume of illicit cigarette brands in Pakistan. This comes in the backdrop

STUDY TO ASSESS THE VOLUME OF ILLICIT CIGARETTE BRANDS IN

PAKISTAN

Technical guidance

FCTC Knowledge Hub, Economics of Tobacco Control Project

Hana Ross, PhDFCTC Knowledge Hub, Economics of Tobacco Control Project

University of Cape Town, South Africa

Policy Research Institute of Market Economy (PRIME)

Dr Zia Uddin IslamTechnical

lead, Tobacco Control Cell

Ministry of Health Services, Regulations and CoordinationPakistan

Safiya Aftab Executive Director

Verso Consulting (Private) Limited

Jamal JanjuaDirector Research Operations

Verso Consulting (Private) Limited

TABLE OF CONTENTS

Executive Summary ..............................................................11. Introduction ...............................................................32. Methodology ............................................................4 2.1. Sampling .......................................................4 2.2. Sample Collection .........................................5 2.2.1 Interviews with Retailers .................. 5 2.2.2 Packs Collected from Retailers ..........5 2.2.3 Packs Collected from Streets ..............53. Validation of the Data Collection Exercise .................94. Findings .....................................................................8 4.1. Overall ..........................................................8 4.2. Empty Packs Collected from the Retailers ....11 4.3. Packs Collected from the Streets ...................13 4.4. Interviews with Retailers ...............................165. Conclusion .................................................................19

This report looks to assess the volume of sale of illicit cigarette brands in Pakistan. This comes in the backdrop of a claim by the tobacco industry, that the market share of illicit brands in Pakistan has risen exponentially due to high tobacco taxes and now stands at 40 percent of the total cigarette market.

For the purpose of this study ten cities and their adjoining rural areas across Pakistan were selected: Karachi, Lahore, Sukkur, Multan, Hyderabad, Peshawar, Quetta, Rawalpindi, Muzaffarabad and Nowshera. These cities were chosen to represent the geographical spread of the country and to also represent different socio-economic realities across Pakistan. Each city was divided up into clusters based on a retail census available with the survey organisation. A sample of clusters was picked out from all the marked clusters in both cities and adjoining rural areas, based on density of retail outlets in the cluster. The clusters with higher retail density were selected for the purpose of sample selection.

Executive Summary

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Overall Percentage of Illicit Cigarettes

Criteria Percent of Total

Packs that don’t comply with pictorial health warning

Packs that don’t comply with textual health warning

Packs with textual warning in foreign language

Duty Free

Packs that didn’t have price printed on them

Packs with GST not printed on them

9%

3.44%

5.58%

0.58%

9%

9%

Within each selected cluster, the next step involved designation of areas/strata for the survey within the cluster. These areas/strata were chosen based on level of economic/retail activity and the presence of relevant tobacco handling channels. The selected tobacco channels included shops selling paan and cigarettes, kiryana stores, general stores and Kiosk / Hawker / Tea Stalls. The shops within the selected areas/stratas were picked out randomly and were approached by the auditors for the survey.

A total of 2111 retailers were visited by the survey teams across the 10 cities. Two types of information were collected from the retailers. First, the survey teams visited the retailers at the start of the day and asked them to retain all the empty packets of cigarettes till the end of the day. A total of 7496 packs were then collected by the survey team and each pack was marked, photographed from all six sides and the requisite information was noted and entered into a database. Second, the retailers were asked a series of questions, for example identifying the most expensive pack they sold that day, the cheapest pack that was sold, the price at which it was sold and how many packs were sold during the day. Details for a total of 6119 packs were noted by the field teams during this exercise in addition to 7496 collected from the retailers. In addition, the survey team also collected 463 packs from the streets in Karachi.

The packs collected from the retailers and the ones

picked up from the streets were revalidated by another firm. A total of 1060 packs were picked out randomly from all the ten cities based on total number of packs picked up from each city. The revalidation exercise didn’t point out any major issues in the entire process.Of the packs collected, it was observed that most of the cigarette packs (around 62 percent) were priced between 30 and 60 rupees, as per the price printed on them. Furthermore, of the total packs collected, around 90 percent were locally manufactured.

Overall, the maximum percentage of illicit packs was around 9 percent. This number was based on empty packs collected from the retailers that met any one of the six criteria for illicit tobacco. There are different variations and permutations that can be applied to the data, but it is clear that the maximum percentage of illicit cigarettes in Pakistan market is not more than 9 percent of the total cigarettes in the market. Further, amongst the packs observed during the interviews with the retailers, around 11.6 per cent were identified as illicit with the majority of those being in the expensive brands category.

The results from different methods of data collection (packs from the retailers, packs collected from the street and interview with the retailers) are elaborated in the main report. The total number of empty packs collected form the retailers were 7496.

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*The number is based on packs collected from the retailers and the streets in Karachi

The study looks to assess the volume of illicit cigarette brands in Pakistan. This comes in the backdrop of a claim by the tobacco industry, that the market share of illicit brands in Pakistan has risen exponentially due to higher tobacco taxes. The industry claims that the illicit cigarette market now stands at 40 percent of the total cigarette market. If this were true, this would not only cause a huge loss to the exchequer, but would undermine tobacco tax as a public health measure. The Federal Board of Revenue (FBR), considering this argument, decided to introduce a third taxation

1 Finance Division. 2018. Economic Survey of Pakistan 2016-17. 2 Data is based on Global Youth Tobacco Survey, 2013 and Global Adult Tobacco Survey. 3 WHO (HTTP://WWW.WHO.INT/TOBACCO/SURVEILLANCE/POLICY/COUNTRY_PROFILE/PAK.PDF?UA=1)

1. Introduction

Table 1: Tobacco Use Data: Result December 20162

Youth tobacco use %

Adult tobacco smoking %

Adult cigarette smoking %

Prevalence (%)

Current tobacco use

Current cigarette smoking Current Daily Current Daily

Source: WHO3

tier for Pakistan’s tobacco industry, which has effectively reduced the price of local brands in the market significantly. In a country like Pakistan with very high incidence of adult smoking, coupled with increasing trend of smoking amongst the youth; this poses a serious risk to public health. Tobacco use in Pakistan is likely to increase as the country has graduated from low to a middle-income country, with 61.4 percent of the population in working age who are increasingly able to afford cigarettes. 1

Male

Female

Total

13.3 4.8 22.2 20.6 19.4 17.9

6.6 0.9 2.1 2.0 1.0 1.0

10.7 3.3 12.4 11.5 10.5 9.6

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2. Methodology2.1. SamplingRetail CensusA retail census was conducted by the survey organisation in 2012, which covers the entire urban retail landscape, as well as 75 percent of the rural areas of Pakistan. Each urban area was further divided into clusters, and within each cluster retail outlets were listed by defined channels. There are seventeen channels used in the census altogether, which include general stores, pharmacies, kiryana stores, bakeries etc. However, only retail outlets dealing in Fast Moving Consumer Goods (FMCGs) were part of this census. The sampling for this work was based on the aforementioned census by the survey organisation, which is the intellectual property of the firm. Therefore the methods of constructing the sampling frame for this study were not publicly divulged.

Geographical DivisionTen districts across Pakistan were selected for the purpose of data gathering. They were chosen to represent geographical diversity of Pakistan and captured main urban centers as well as smaller cities close to the border. The idea was to capture the situation in major cities, and to identify possible smuggling hot spots. The list of cities was provided by the Campaign for Tobacco Free Kids in the terms of reference.

SamplingStep1: As mentioned earlier, the list of cities where the survey was to be conducted was provided by the Campaign for Tobacco Free Kids. However, the data collection agency suggested to make the sample more representative of consumption trends by adding in some rural areas adjoining the cities into the area from which the sample was to be drawn. The rural areas adjoining the cities were identified based on definitions used in local government legislation.

Thus each location in the sample included the main city area, as well as three or four adjoining rural areas (depending on the population of the city and adjoining areas).

Step 2: Each area/city was divided up into smaller clusters in the retail census. The clusters were defined based on physical characteristics and features of the landscape or cityscape and administrative convenience, for instance a main road could be a cluster boundary. A sample of clusters was picked out from all the marked clusters in both cities and adjoining rural areas, based on density of retail outlets in the cluster. For example, Karachi was divided up into more than 500 clusters of which 193 were selected. The clusters with higher retail density were selected for the purpose of sample selection.

Step 3: Within each selected cluster, the next step involved designation of areas for the survey within the cluster. Areas were chosen based on level of economic/retail activity (for instance, commercial areas were given preference over predominantly residential areas); and then within commercial areas, the presence of relevant tobacco handling channels. The latter included shops selling paan and cigarettes, kiryana stores or general stores. Channels like pharmacies or bakeries which typically do not handle large volumes of tobacco were not chosen for sample selection.

Step 4: Once the channels were chosen, the next step was to pick actual retail outlets. Outlets were chosen such that they were divided across four main tobacco handling channels - kiryana stores, paan cigarette stores, general stores and hawkers or kiosks. Within each channel, the actual retail outlet was chosen through a process of random sampling. The shops that were picked out randomly were assigned a

4 The term channel was used by the data collection agency and refers to type of store or retailers who handle tobacco products.

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number marking priority from 1 to 3. Auditors were asked to first approach those assigned the value of 1, and then work their way down if these outlets refused to take part in the survey. In the event of all three

refusing, field teams were told to walk to the closest shop falling within the description of the channel.

2.2. Sample CollectionPacks of cigarettes were collected in three ways as follows.

The retailers were asked a series of questions, for example identifying the most expensive pack they sold that day, the cheapest pack that was sold, the price at which it was sold and how many packs were

2.2.1 Interviews with Retailers

2.2.2 Packs Collected from Retailers

The teams visited the retailers at the start of the day and asked them to retain all the empty packets of cigarettes till the end of the day. These packs were then collected by the survey team. Each pack

sold during the day. They were also asked if the teams could collect the “empty packs sold as loose” that day and these details were noted, as per the criteria developed during the design stage.

collected was marked, and photographs were taken from all six sides. The following information on the pack was noted and entered into the database.

Table 2: Variables

1. Brand Name 5. Pack size 9. Compliant With The Graphical Health Wearing

13. Price Of Pack As Indicated On The Pack

2. Variant flavor 6. Local or Imported

3. Cigarettes/Size 7. Country of manufacture

4. Pack type 8. Manufacturer

10. Compliant With The Textual Health Wearing

14. Is There Tax Paid Or Price Inclusive Of Taxes Printed On The Packs

11. Is The Health Warning In Foreign Language

12. Is There Duty Free Anywhere On The Pack

Street collection was only done in Karachi and for this purpose a total of 193 areas were selected throughout the city. These were the same areas/clusters where pack collection from retail vendors occurred. The field teams were asked to collect used cigarette packs

from the street in their areas of operation. A total of 463 packs were collected from the streets by the teams, which were then sorted, and details on the variables listed in the table above were entered into the database.

2.2.3 Packs Collected from Streets

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The data collected was revalidated by a different firm, which was not part of the data collection process. The team drew a sample from the total number of packs collected from the retailers and the ones picked up from the streets in Karachi. Of the total empty

cigarette packs collected, a sample of 1000 packs was chosen at random from each city and its adjoining areas. The sample was divided across cities based on total number of packs picked up from each city. Thus the sample was proportionate.

3. Validation of the Data Collection Exercise

The sample division was as follows:

Table 3: Sample Distribution

City Number of Packs

Karachi 182

Lahore 90

Sukkur 145

Multan 180

Hyderabad 95

Peshawar 85

Quetta 42

Rawalpindi 101

Muzaffarabad 52

Nowshera 88

Total 1060

The revalidation sample was collected randomly from amongst the total packs collected originally. The data entry was then rechecked to determine the accuracy of the information in the dataset. Of the total 1060 packs checked for revalidation, there were minor

issues in only a few entries, as recorded in the table below. The percentage of errors comes to around 3.5 percent of the total sample, which is well within acceptable limits for such data entry processes (See Table below).

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Table 4: Problems Found in the Dataset

Data Frequency

Price Entered Incorrectly 37

Health Warning in Foreign Language Not Indicated 1

Manufacturer’s Name Wrong 1

Textual Health Warning Not Indicated 3

Total 42

Similarly, out of the 463 packs collected from the streets in Karachi, 50 were picked out randomly for data entry verification. Out of 50 only 1 case had price wrongly entered. All the rest of the data was entered correctly.

Overall, we can say that the data collected and the

entry process was diligently done and very few discrepancies were seen in the overall process. The data entry operator and the enumerators understood the work, and they were not only able to gather the relevant information from the field, but also to pass it on to the data entry team accurately.

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4. FindingsThis section presents the findings from the analysis of the full database (not just the revalidated entries).

4.1. Overall

A total of 7496 packs were collected from 2111 retailers across the selected cities of Pakistan. Of the

total, around 36 percent of the sample was collected from Karachi and Multan (See Table below).

Table 5: Sample Distribution

The survey teams across the ten districts visited a total of 2111 retailers, of which the majority were

general stores (47 percent), followed by kiryana stores.

City Number of Packs Percentage

Karachi 1327 17.7

Lahore 627 8.4

Sukkur 909 12.1

Multan 1327 17.7

Hyderabad 708 9.4

Peshawar 622 8.3 Quetta 313 4.2

Rawalpindi 692 9.2

Muzaffarabad 387 5.2

Nowshera 584 7.8

Total 7496 100

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Table 6: Distribution by Type of Retailer

Type of Store Number of Stores Percentage

General Stores 987 47%

Kiryana Stores 483 23%

Paan / Cigarette 351 17%

Kiosk / Hawker / Tea Stalls 290 14%

Total 2111 100%

Key findings by variable were as follows.

Pack Size

All the packs collected from the retailers contained 20 cigarettes. This was also true for all the packs collected from the streets in Karachi and for the packs viewed during the interviews with the retailers.

Table 7: Prices

Retailers Streets in Karachi

Rupees Frequency Percent Frequency Percent

30 to 60 4629 61.75% 329 71.06%

61 to 90 760 10.14% 17 3.67%

91 to 110 4 0.05% 0 0.00%

111 and above 1431 19.09% 69 14.90%

No Price mentioned 672 8.96% 48 10.37%

Total 7496 100.00% 463 100.00%

Price of Packs

Most of the empty packs collected from the retailers and the streets were priced between 30 and 60 rupees, as per the price printed on the packs. Around 62 percent of packs collected from retailers were priced in this range, as opposed to around 71 percent of pack collected from streets in Karachi.

From the packs collected from retailers, streets and the ones whose details were recorded during interview of the retailers, around 90 percent of the

cigarette packs were locally manufactured based on the information on the packs.

Country of Manufacture

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Dubai 9 0.12% 2 0.03% 0.00% 11 0.08% Germany 4 0.05% 23 0.38% 0.00% 27 0.19% Imported* 336 4.48% 446 7.29% 39 8.42% 821 5.83%

Japan 4 0.05% 10 0.16% 0.00% 14 0.10%

Korea 255 3.40% 142 2.32% 9 1.94% 406 2.88% Pakistan 6826 91.06% 5406 88.35% 415 89.63% 12647 89.84% Turkey 1 0.01% 2 0.03% 0.00% 3 0.02% UAE 60 0.80% 87 1.42% 0.00% 147 1.04%

UK 1 0.01% 1 0.02% 0.00% 2 0.01% 7496 100% 6119 100.00% 463 100.00% 14078 100.00%

Table 8: Country of Manufacture

Interviews with Retailers

Country of Manufacture

Empty Packs From Retailers

PercentagePercentage

Pack Collected

from Streets

Total from All three sources

PercentagePercentage

* Was entered in database as such, with no indication of place of manufacture.

Assessment of Illicit Packs

The maximum percentage of illicit packs was around 9 percent. This as based on the percentage of empty packs collected from retailers that met any one of the six criteria laid down by the team to identify illicit tobacco packs. There are different variations and permutations that can be applied to the data, but it is clear that the maximum percentage of illicit cigarettes in Pakistan market is not more than 9 percent of

the total cigarettes in the market. The results from different methods of data collection (packs from the retailers and the packs collected from the streets of Karachi) are elaborated in the subsequent sections of the report. The total number of all packs collected from the retailers and the ones collected from the streets of Karachi were 7959.

Table 9: Overall Percentage of Illicit Cigarettes

Criteria Number of Packs Percent of Total

Packs that don’t comply with pictorial health warning 717 9%

Packs that don’t comply with textual health warning 274 3.44%

Packs with textual warning in foreign language 444 5.58%

Duty Free 46 0.58%

Packs that didn’t have price printed on them 717 9%

Packs with GST not printed on them 717 9%

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* The number is based on packs collected from the retailers and the streets in Karachi

Around 40 percent of the total packs collected from Quetta were illicit, followed by Karachi where the percentage of such packs was 20 percent. (See table below).

Table 10: Percentage of illicit packs by cities

Illicit Packs Number of total packs collected Total Percentage Hyderabad 45 708 6.36% Karachi 358 1790 20.00% Lahore 23 627 3.67% Multan 32 1327 2.41% Muzaffarabad 28 387 7.24% Nowshera 7 584 1.20% Peshawar 8 622 1.29% Quetta 122 313 38.98% Rawalpindi 19 692 2.75% Sukkur 75 909 8.28% Total 717 7959 9.01%

A further breakdown of the compliance with the criteria is given in the following sections.

4.2. Empty Packs Collected from the Retailers

Packs that didn’t Comply with Pictorial Health Warning Requirements

Of the total packs collected from the retailers, 669 or 9 percent, didn’t comply with the requirements of the graphical health warning. The largest percentage of such packs were picked up from Karachi - around 46 percent of the packs which didn’t comply with textual graphic warning came from the city. When we look at the division of rural and urban areas we don’t

necessarily see a pattern emerging from the data, for instance in Karachi all the illicit packs collected were from the city, similarly in Lahore around 87 percent were collected from the urban areas. On the contrary, in Rawalpindi most illicit packs were collected from rural areas as opposed to urban areas (See Table below).

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*The number is based on packs collected from the retailers and the streets in Karachi

Table 11: Number of packs that didn’t comply with the pictorial health warning

Area Total Urban Rural Urban Rural Total % Hyderabad 36 9 80% 20% 45 7% Karachi 310 0 100% 0% 310 46% Lahore 20 3 87% 13% 23 3% Multan 3 29 9% 91% 32 5% Muzaffarabad 25 3 89% 11% 28 4% Nowshera 1 6 14% 86% 7 1% Peshawar 7 1 88% 13% 8 1% Quetta 84 38 69% 31% 122 18% Rawalpindi 4 15 21% 79% 19 3% Sukkur 42 33 56% 44% 75 11% Total 532 137 80% 20% 669 100%

Number of packs that didn’t comply with textual health warning

Of the total packs collected, 265 packs didn’t comply with textual health warning requirements. This makes it around 3.5 percent of the total sample collected

from the retailers. Of the packs that didn’t comply with the textual health warning, around 35 percent were collected from Karachi, followed by 20 percent from Quetta.

Table 12: Number of packs that didn’t comply with textual health warning

HyderabadKarachiLahoreMultanMuzaffarabadNowsheraPeshawarQuettaRawalpindiSukkurTotalFrequency 14 93 1 19 4 7 7 54 5 61 265Percent 5.3 35.1 0.4 7.2 1.5 2.6 2.6 20.4 1.9 23 100

Of the total packs collected, 405 packs had textual warning in a foreign language. This makes it 5.4 percent of the total sample collected from the retailers. Amongst the cigarette packs that had textual warning

in a foreign language, most were collected from Karachi (around 54 percent), followed by Quetta (17 percent).

Table 13: Number of packs with textual warning in foreign language HyderabadKarachiLahoreMultanMuzaffarabadPeshawarQuettaRawalpindiSukkurTotalFrequency 31 217 23 13 24 1 68 14 14 405 Percent 7.7 53.6 5.7 3.2 5.9 0.2 16.8 3.5 3.5 100

Number of packs with textual warning in foreign language

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Table 14: Number of packs with “duty free” written on them

Of the packs collected from the retailers, 669 didn’t have price mentioned on them, which was 8.9 percent

of the total sample. Of these, 46 percent were from Karachi (See Table below).

Table 15: Number of pack that didn’t have price written on them

Number of packs with GST not printed on them A total of 669 packs were collected from the retailers which didn’t have GST written on them. This makes it 8.92 percent of the total sample collected. Of these,

46 percent were collected from Karachi and 18 percent were collected from Quetta.

Number of packs with duty free written on them

Of the total sample collected there were only 40 packs which had “duty free” written on them. Of these, 17 were collected from Karachi and 8 from Quetta.

Table 16: Number of packs that didn’t have GST printed on them

4.3. Packs Collected from the Streets.

A total of 463 packs were collected from different streets of Karachi. The purpose of this exercise was to triangulate the findings from the data collected from the retailers. The packs were viewed against the same criteria as the packs collected from the retailers. From the empty packs collected from the retailers

and the data gathered through interviews with the retailers, the percentage of illicit cigarettes was 24 percent and 21 percent respectively. This number was based on the number of packs that didn’t comply with pictorial health warnings and had no price and GST mentioned on them (See Table below).

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Hyderabad Karachi Lahore Quetta Rawalpindi Sukkur TotalFrequency 3 17 7 8 3 2 40Percent 7.5 42.5 17.5 20 7.5 5 100

HyderabadKarachi Lahore Multan Muzaffarabad NowsheraPeshawarQuettaRawalpindi Sukkur Total 45 310 23 32 28 7 8 122 19 75 669 7% 46% 3% 5% 4% 1% 1% 18% 3% 11% 100%

HyderabadKarachiLahoreMultanMuzaffarabadNowsheraPeshawarQuettaRawalpindiSukkurTotalNo 45 310 23 32 28 7 8 122 19 75 669Percentage 7% 46% 3% 5% 4% 1% 1% 18% 3% 11% 100%

Number of packs that didn’t have price printed on them

Table 17: Percentage of illicit packs to the total packs collected from Karachi.

*The numbers are based on those packs that had issues with pictorial health warning and didn’t have price and GST printed on them.

Number of packs that didn’t comply with pictorial health warning requirements

Around 10 percent of the total packs collected from the street in Karachi didn’t comply with the recommended pictorial health guidelines of the country. When we compare his figure to the ones

for collected from retailer, we don’t see a significant difference in the percentage (for packs collected from retailers this was true for 9 percent of the packs collected).

Table 18: Number of packs that didn’t comply with pictorial health warning requirements

Around 2 percent of the packs collected from the streets in Karachi didn’t comply with the textual health warning guidelines for cigarette packs. This


was true of around 3.5 percent of the packs collected from the retailers during the survey.


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Empty Packs Collected from Retailers 312 1327 24%Packs assessed by the teams during interviews with the retailers. Packs Collected form the streets 48 463 10%

Number Percentage of illicit

Total packs collected from Karachi

206 985 21%

Frequency Percent No 48 10.4 Yes 415 89.6 Total 463 100



Of the 463 packs collected from streets in Karachi only around 8 percent had a textual warning in foreign language. When we compare this figure to the percentage of packs collected from the retailers,

Table 20: Number of packs with textual warning in foreign language

we see that there is a 3 percentage points difference between the two (for packs collected from retailers this was true for only 5.4 percent of the sample collected).

Number of packs with “duty free” written on the packs

Of the total collected from the streets, only 6 packs were found which had duty free mentioned on them, which comes to around 1 percent of the total packs,

while this was only true for 0.5 percent of the packs collected from the retailers.

Table 21: Number of packs with “duty free” written on the packs

Number of packs that didn’t have price printed on them

From the sample collected from the streets in Karachi, only 10 percent of the packs didn’t have price mentioned on them. While this was true for around

9 percent of the packs collected from the retailers across the country.

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Table 22: Number of packs that didn’t have price printed on them

Number of packs with GST not printed on them

Similarly, 48 out of the total packs collected didn’t have GST printed on them, which makes it around 10 percent of the total packs. While this was true

for around 9 percent of the packs collected from the retailers across the country.

Table 23: Number of packs with GST not printed on them

4.4. Interviews with Retailers

The retailers who agreed to supply empty cigarette packs were also interviewed at the end of the day, regarding the most expensive and the cheapest brand they had sold that day. In some cases, retailers provided the name of more than one brand in each category. They were also asked if the team could take pictures of the cigarette packs, and record the necessary information for the survey. As a result, information for 6119 packs was collected from the retailers in addition to the data generated from the empty pack collection.

It was also noted that a higher percentage of illicit packs were observed in the expensive brands category as opposed to the cheaper brands. If we look at the packs that complied with any one of the six criteria laid down for illicit packs, we see that, of the total illicit packs (712) around 61 percent fell into the expensive category. It was also observed that in most cities the number of illicit packs in the expensive brands category were much higher than the cheaper brands (see table below).

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Total PercentMentioned 415 90%Not Mentioned 48 10%Total 463 100%


Number of packs that didn’t comply with pictorial health warning requirements

Of the total cigarette packs assessed at the retail outlets, 712 packs didn’t comply with the pictorial health warning, which was 11.6 percent of the total sample. Again the higher percentage of such packs were observed in Quetta, followed by packs in Karachi. Of

the 712 packs 433 were from the expensive category, which makes them around 61 percent of the total illicit packs. This shows that the expensive brands had a significantly higher percentage of illicit packs as opposed to cheaper ones.

Table 24: Number of packs that didn’t comply with pictorial health warning requirements


Of the total number of cigarettes pack assessed, 134 didn’t comply with the textual health warning

requirements, which was around 2.2 percent of the total packs assessed at the retail outlets.

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Cheapest Expensive TotalHyderabad Count 2 42 44 % within District 4.50% 95.50% 100.00%Karachi Count 28 178 206 % within District 13.60% 86.40% 100.00%Lahore Count 0 43 43 % within District 0.00% 100.00% 100.00%Multan Count 1 11 12 % within District 8.30% 91.70% 100.00%Muzaffarabad Count 71 23 94 % within District 75.50% 24.50% 100.00%Nowshera Count 7 0 7 % within District 100.00% 0.00% 100.00%Peshawar Count 6 12 18 % within District 33.30% 66.70% 100.00%Quetta Count 149 103 252 % within District 59.10% 40.90% 100.00%Rawalpindi Count 1 10 11 % within District 9.10% 90.90% 100.00%Sukkur Count 14 11 25 % within District 56.00% 44.00% 100.00%Total Count 279 433 712 % within District 39.20% 60.80% 100.00%

Table 28: Number of packs that didn’t have price printed on them

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Table 27: Number of packs with duty free written on them

HyderabadKarachi Lahore MultanPeshawarQuettaRawalpindi TotalFrequency 16 46 21 2 7 27 2 121Percentage 13.2 38 17.4 1.7 5.8 22.3 1.7 100

HyderabadKarachiLahoreMultanPeshawarQuettaRawalpindi TotalFrequency 16 46 21 2 7 27 2 121Percentage 13.2 38 17.4 1.7 5.8 22.3 1.7 100


Of the total 6119 packs assessed at the retail outlets, 578 packs had textual warning in a foreign language, which was 9.4 percent of the total cigarette packs assessed. Of the total packs that had warning in foreign language, 430 were classified as expensive

brands, which comes to around 74 percent of the total packs. Again this shows that a higher percentage of expensive brands had foreign language warnings on them as opposed to the cheaper ones.

Table 26: Number of packs with textual warning in foreign language

Number of packs that didn’t have price printed on themOf the total, 712 packs didn’t have price mentioned on them. This was 11.6 percent of the total sample drawn. The highest percentage of such cigarettes was in Quetta and then Karachi. Of the total (712) packs that didn’t have price and GST printed on them, 433

were expensive brands. Which is around 61 percent of the total packs with no price on them, again we can see that the percentage of illicit tobacco amongst expensive brands is much higher in comparison to cheaper ones.

HyderabadKarachiLahoreMultanMuzaffarabadNowsheraPeshawarQuettaRawalpindiSukkurTotalFrequency 42 182 43 11 92 1 13 168 11 15 578Percentage 7.3 31.5 7.4 1.9 15.9 0.2 2.2 29.1 1.9 2.6 100


HyderabadKarachiMultanMuzaffarabadNowsheraPeshawarQuettaSukkurTotalFrequency 2 24 1 2 6 5 84 10 134Percentage 1.5 17.9 0.7 1.5 4.5 3.7 62.7 7.5 100

Number of packs that didn’t have GST printed on them

Of the total, 712 didn’t have GST mentioned on them, which makes it 11.6 percent of the total sample collected. The variation across cities is as given below.

Table 29: Number of packs with GST not printed on them

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HyderabadKarachiLahoreMultanMuzaffarabadNowsheraPeshawarQuettaRawalpindiSukkurTotalFrequency 44 206 43 12 94 7 18 252 11 25 712Percentage 6.2 28.9 6 1.7 13.2 1 2.5 35.4 1.5 3.5 100

This assignment had two major components – revalidation and cross checking of data entered by the survey firm, and analysis of findings for the database as a whole. The revalidation exercise showed that the data entry exercise was largely error free, and that considerable effort had gone into classifying the data and entering it correctly.

As regards the analysis of the dataset as a whole, this throws up some interesting information. It appears from the sample collected that the tobacco industry’s contention that illicit cigarettes constitute a major chunk of the total sold in the market is not supported, given the criteria specified. The proportion of illicit packs in the data set as a whole is around 10 percent (10%). The bulk of the packs scrutinized did indeed meet most of the criteria for legitimate products. Where infractions were found, these were mainly concentrated in Karachi and Quetta.

5. Conclusion

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STUDY TO ASSESS THE VOLUME OF ILLICIT CIGARETTE BRANDS … · 2019-06-06 · The study looks to assess the volume of illicit cigarette brands in Pakistan. This comes in the backdrop