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Illegal-smokes trade flourishing

From: James Middleton []
Sent: Tuesday, June 14, 2011 06:45‘; ‘Ng Yuk Hang’
Cc: Quinton YK Chan; ‘‘;; ‘‘; ‘Lai Vienna’
Subject: CustomsData2007-2010.xlsx

Dear Sir

I refer to your article below.

The article needs clarification as regards what quantity of contraband was intended for local sales.

In 2010, 29 million cigarettes were seized by Customs in HK port in transhipment to another country and not intended for sale here.

This shows a significant drop in local seizures of contraband. The salient fact remains that in the past two years 60-65% of local contraband were GENUINE products meaning the tobacco companies are the source of the problem.

This transhipment data reduces the number of local seizures significantly

Please correct and clarify your story as it is misleading to the public.

See attached self explanatory breakdown from the Customs Department.

Kind regards,

James Middleton



South China Morning Post — 14 June 2011

One poor suburb has seen a big rise this year in gangs selling cut-price cigarettes, customs officials say

The number of gangs selling illegal cigarettes in the public housing estates of Tin Shui Wai, a poor suburb, has trebled this year, and citywide seizures of contraband cigarettes have soared, customs officials said.

The gangs, which sell cigarettes for between a fifth and a half the official price, have swarmed into the area’s 12 estates since the 41.5 per cent increase in tobacco tax came into force early this year.

They advertise blatantly by recruiting local youngsters and mainland visitors to deliver fliers listing brands, prices and contact numbers, according to the Customs and Excise Department. The handbills are posted door-to-door in each housing block in the daytime and cigarettes are delivered to buyers in the evening or at night.

“After placing an order, the cigarettes can be delivered to your home or pick-ups can be arranged in parks or the lift lobby of your building,” Superintendent Kong Shui-wing of customs’ revenue and general investigation bureau said.

He said that while there used to be three to five syndicates selling black- market cigarettes in Tin Shui Wai, the bureau recently found about 10 gangs touting for business in the district. “We are still investigating whether they are linked,” he said.

Counterfeit cigarettes are being sold for as little as HK$10 a pack and smuggled genuine cigarettes cost HK$25 to HK$27, well below the official Hong Kong price of around HK$50.

Meanwhile, the number of illicit cigarettes seized across the city in the first five months of this year rose to 56 million, a nearly 60 per cent rise from the 35 million in the same period last year. Last year saw seizures rise 25 per cent to 76 million cigarettes from 61 million in 2009.

Kong attributed the rise in seizures to tougher enforcement action before and after the tax increase. “After a series of operations, illicit cigarette dealers tended to smuggle smaller consignments to reduce the risk and losses,” he said.

However, the 41.5 per cent increase in tobacco tax had apparently spurred a rise in the illegal trade.

The department says Tin Shui Wai is a popular target for the illegal cigarette traders because it is home to about 177,000 people.

The Customs and Excise Department has teamed up with the Housing Authority, residents and property management offices to tackle the problem.

“Staff from the Housing Authority and property management companies and residents can all help monitor and report what is happening on their estates,” Kong said.

“This will help us build a better network of intelligence.”

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