Can governments enforce their way out of the illicit market crisis?
In this interview, Brent Stafford speaks with Asa Saligupta and Rohan Pike about the consequences of prohibition, the limits of enforcement, and whether tougher government action can truly curb the growing illicit nicotine market.
As restrictions tighten and enforcement efforts intensify, the black market continues to evolve. What is driving its growth, and could current policies be making the problem worse?
Transcription:
00:03 - 00:09
[Brent Stafford]
The strapline for this year's conference is prohibition and public health.
00:10 - 01:42
[Asa Saligupta]
Yes. Do they go together? Not really. I don't think so. It's not really. Public health tends to go for the extremists, especially the people in government that deal with public health. And then they shouldn't. they shouldn't do prohibition. Actually, they should consider harm reduction. And which, you know, like in other categories, they already do harm reduction, like seatbelt, needles, and everything else. But when it comes to tobacco harm reduction, that is completely different story. It seems to be like out of their minds, you know, like we have proven that tobacco harm reduction is definitely one of the most effective harm reduction. But then again, they just ignore it. It's like, no, no, no, it's nicotine. So instead of attacking smoking combustible cigarette as they used to, now they turn around and then they started to attack nicotine. So whatever is involved with nicotine, you know, either it be like a power snus, especially electronic cigarettes, then it becomes like the biggest enemy, which I really don't know why, but it shouldn't be that way, you know. I think they know deep down inside that tobacco harm reduction really works, but I don't know why.
01:43 - 01:47
[Brent Stafford]
Do you think public health may be holding a grudge against nicotine in some manner?
01:47 - 02:36
[Asa Saligupta]
Possibly. Possibly. Maybe they know that, you know, like a few years back, like maybe eight or ten years back, they probably kind of like they know that there's no way they can win the war against smoking. And then, you know, that was not the emergence of electronic cigarette, but electronic cigarette, especially vaping, you know, like started to become widespread. The boom of electric cigarette is about 10 years ago, as we know of. It becomes widespread. And then they probably be thinking like, hey, we've got a new opponent. They probably think that it's going to be easier than attacking the Big Tobacco and what not. So they say, hey, let's turn around and do this, which I think they're wrong.
02:37 - 02:43
[Brent Stafford]
The strapline for this conference is prohibition and public health. Do they go together?
02:45 - 03:03
[Rohan Pike]
They never have previously, and perhaps we could learn from that and they won't again. But no, prohibition has been the cause of the failure of the policy in Australia, both with tobacco and safe and nicotine products. And we're trying to unpack that at this conference.
03:03 - 03:17
[Brent Stafford]
So there's some new information, or at least not new, but a realization, I guess, upon the Australian government that there might be a problem. We just heard that, that 40% increase in nicotine use in Australia?
03:17 - 03:50
[Rohan Pike]
Yes, and that's up to 80% of tobacco being illicit as well. And this has come, the biggest increase has come during the time of the alleged crackdown. So with increased enforcement has actually supercharged the illicit market, which doesn't really make much sense. Well, it doesn't correlate with the government policy that enforcement alone is going to fix this. So at some stage, certainly, there'll be an outbreak of common sense, you would hope, and they will realise that that is not the way to go. And hopefully we embrace harm reduction in Australia soon.
03:50 - 04:09
[Brent Stafford]
We heard from Euromonitor International here this week that the worldwide global e-vapor market that's illicit is $47 billion a year. And that's 76% of the entire e-vapor market. It's basically illicit.
04:09 - 04:28
[Rohan Pike]
Yeah, well that's just a sad indictment on policy settings around the world, which clearly have been based on the premise of prohibition and based on the premise that no one should be smoking and no one should be consuming nicotine. Obviously that's unrealistic and unenforceable, so that's where we're at.
04:28 - 04:33
[Brent Stafford]
And let's talk about enforcement for a second, of course. So you were the strike commander, is that what it was?
04:33 - 05:04
[Rohan Pike]
Yeah, I set up a thing that ended up being called the Illicit Tobacco Strike Team in Australia. And really, that was the first time that the size and breadth of the problem was uncovered. And since then, the government's been warned. That was 10 years ago. The government's been warned multiple times. taken really no interest and not responded to that in any substantial way. Had we implemented some proper enforcement back then, we could have suppressed the market. But now it's totally out of control and it's gone too far.
05:04 - 05:18
[Brent Stafford]
So they talk about enforcement. They talk about enforcement in the US. They talk about enforcement in Australia. They talk about enforcement in Europe. Can they enforce their way out of this problem? And if they did, what would that look like?
05:18 - 05:39
[Rohan Pike]
Well, no, they just can't enforce their way out of it when the policy settings are such that they're driving the illegal behaviour and driving the illicit market. So you can't have one really strong driver on the other hand and think that the enforcement's going to make a difference on the other. You need the policy to change and then to give the enforcement a chance.