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Interventions to Reduce the Supply of Tobacco 

The key intervention on the supply side is the control of smuggling. Recent estimates suggest that 6 to 8 percent of cigarettes consumed globally are smuggled (Merriman, Yurekli, and Chaloupka 2000). Of note, the tobacco industry itself has an economic incentive to smuggle, in part to increase market share and decrease tax rates (Joossens and others 2000; Merriman, Yurekli, and Chaloupka 2000). Although differences in taxes and prices across countries create a motive for smuggling, a recent analysis comparing the degree of corruption in individual countries with price and tax levels found that corruption within countries is a stronger predictor of smuggling than is price (Merriman, Yurekli, and Chaloupka 2000). Several governments are adopting policies aimed at controlling smuggling. In addition to harmonizing price differentials between countries, effective measures include prominent tax stamps and warning labels in local languages, better methods for tracking cigarettes through the distribution chain, aggressive enforcement of antismuggling laws, and stronger penalties for those caught violating these laws (Joossens and others 2000). Recent analysis suggests that, even in the presence of smuggling, tax increases will reduce consumption and increase revenue (Merriman, Yurekli, and Chaloupka 2000).

In contrast to the effectiveness of demand-side interventions, there is much less evidence that interventions aimed at reducing the supply of tobacco products are as effective in reducing cigarette smoking

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