Smuggled cigarettes from Myanmar flood market
With a very efficient underground distribution network, the comparatively cheaper cigarettes have reached markets in remote parts of the country, forcing local companies to slash prices amid plummeting sales.
Most of the smuggling is done through Teknaf by road and through sea ports under the cover of bilateral border trade with Myanmar, official sources and cigarette manufacturers said.
Manufacturer of 'LONDON' brand cigarettes, the Rothmans of Pall Mall Myanmar Private Ltd, opened a huge distribution centre close to Bangladesh border last year, sources in local companies claimed.
During a visit to wholesale markets at New Market and Chawk Bazar yesterday, traders told this correspondent that they could supply 'any quantity' of this cigarette any time. Many of them nodded when this correspondent asked whether they could supply 500 cartoons from ready stock.
The price of each cartoon (200 sticks) of LONDON was between Tk 220 and 270 in the wholesale market. The wholesalers said 'parties' deliver the cigarettes at their shops. They declined to name the 'parties' or persons behind the smuggling, but hinted that there were warehouses in Chittagong, Dhaka, Rajshahi and Khulna.
"LONDON is a hot business now and it is greatly affecting sale of local cigarettes whose prices are between Tk 1 and Tk 2 per stick," said a wholeseller at Chawk Bazar.
British America Tobacco (BAT), the highest tax payer among local tobacco companies with a payment record of Tk 980 crore in the last financial year, has cut prices of two of its popular brands by nearly Tk 10 each. A BAT official said they were forced to slash prices as sales fell sharply after 'invasion' of the market by 'LONDON' brand cigarettes.
"Consequences of this unabated illegal trade will be severe on the national exchequer which gets about Tk 1,300 crore in revenue from tobacco industries," said a BAT official.
Many other smuggled brands are in the market but nobody has ever witnessed such a large scale and systematic smuggling of a particular brand of cigarettes, some other BAT officials said.
When contacted, commerce ministry sources said they have identified Teknaf as the smuggling route and directed the authorities concerned to take measures to stop it.
"Few individuals are depriving the country of crores of taka in revenue right under the nose of so many government agencies whose responsibility is to check smuggling," said an official concerned hinting at their (government agencies) alleged inaction.