Market Booms for Smuggled Cigarettes in Chinese Community

Smuggled cigarettes displayed in a picture on WeChat posted by a vendor. (Courtesy photo sent to World Journal)

Smuggled cigarettes displayed in a picture on WeChat posted by a vendor. (Courtesy photo sent to World Journal)

[Editor’s note: On June 7, the World Journal published three stories by reporter Mike Hong focusing on the booming market for smuggled cigarettes in the Chinese community. Here is a round-up, translated by Rong Xiaoqing.]

Cigarette smuggling has been a long-existing problem in New York state thanks to the hefty cigarette tax, the highest in the nation. A report says 60 percent of the cigarettes sold here are smuggled. State Sen. Marty Golden recently proposed legislation aiming to crack down on the black market with stronger force by increasing the related budget for the police and setting a cigarette tax enforcement fund to reward whistleblowers.

But in the Chinese community where cigarette smuggling has been rampant, some people don’t think the legislation will work.

In the Chinese community, the way to purchase smuggled cigarettes is an open secret. The vendors are cautious. They advertise by word of mouth. To avoid being caught by undercover inspectors, they only accept customers who are referred by people they know. Smokers are always able to find them. Buyers and sellers often communicate via phone or WeChat, the popular social media platform among Chinese.

According to people in the know, when a potential buyer calls or sends requests via WeChat, the vendor often asks what brand he or she is looking for. The vendor then tells the buyer the brands in stock and the prices. The two parties discuss when and where to do the transaction. The minimum sale is a carton (10 packs).

To be safe, the transaction is often conducted in front of big shopping malls or busy public areas. It never happens in private homes or on the street in quiet neighborhoods. The vendor normally arrives early and wanders around the selected location to make sure it’s safe. The cigarettes are put in opaque plastic bags and swiftly handed to the buyer. The buyer takes a quick peek to make sure the products are what he or she ordered. Then the money is paid. The whole process finishes in the blink of an eye.

Insiders say WeChat is now a popular tool to promote smuggled cigarettes. Some vendors like to post pictures of the cigarettes in storage and the new arrivals on their WeChat account. Still, the vendors are careful to not leave evidence for undercover inspectors posting as potential buyers. They only put the picture of the cigarettes as well as their phone number or WeChat ID, or, at most, refer to “new arrivals” without mentioning anything “for sale.” “People who know will know. You don’t have to be explicit,” they say. The pictures are normally removed in a week and replaced by new ones. When the vendor and the buyer chat on WeChat, they often use Chinese. Even so, they won’t mention the words “buy” and “sell.” Rather they use the word “have.”

The black market in the Chinese-concentrated neighborhoods is not the only place where Chinese smokers purchase low-price smuggled cigarettes. Mr. Xue, an international student at Fordham University said when he just arrived in New York, he only knew that he could get smuggled cigarettes in Flushing. But he lives in the Bronx and it is too far to always travel to Flushing. So he started to buy cigarettes from an Indian-run bodega close to his home. A few months later, when he became a trusted patron, the owner asked him stealthily: “Do you want cheap cigarettes?” The Marlboro on the shelf is $11 per pack. But the “cheap” ones are only $7 or $8 per pack. However, when you see a sticker on the package that says “Virginia,” you know it’s smuggled.

Still Chinese smokers’ loyal taste to the “home flavors” creates a big market for the smugglers who stretch their relentless endeavor across the ocean.

Korean cigarettes with pop-up ice cream-flavored balls, promoted by a vendor on WeChat. (Courtesy photo sent to World Journal)

Korean cigarettes with pop-up ice cream-flavored balls, promoted by a vendor on WeChat. (Courtesy photo sent to World Journal)

Some Chinese smokers say they become patrons of the smugglers not only because they like the lower prices, but also because they don’t like American cigarettes. So cigarettes that are smuggled in from China, Japan and Korea always attract a lot of customers.

For Chinese immigrants and international students who are used to the Chinese products, domestically made-American cigarettes may taste too strong and too “foreign.” It is hard to find cigarettes made in China on the legitimate market in the U.S. But Chinese vendors have all the brands Chinese smokers are familiar with, such as Zhongnanhai, Chunghwa, Goldenleaf, Yuxi, Yunyan, and HTS. They sell all of them at low prices.

Mr. Xue, the Fordham student, has purchased smuggled cigarettes from vendors in Flushing. He said the vendors are able to offer almost any Chinese brand the customers ask for. For the customers, not only can they get the flavors they like but also at prices much lower than the Chinese cigarettes one can find through legal avenue in the U.S.

Mr. Xue said smuggled cigarettes are only sold wholesale. Although the wholesale prices are a little higher than they are in China, the average prices for individual packs are at the same level as their retail prices in China. Compared to cigarettes sold in shops in New York, which are normally more than $10 per pack, it is a bargain.

“Let’s take Yuxi as an example. A carton of 10 cardboard boxes sells for $45. So on average it is only $4.50 per pack,” said Mr. Xue. He said he often purchases a dozen or so cartons together with other Chinese students who share the cost with him. “American cigarettes are too expensive for us. Also, we prefer the flavors of the Chinese cigarettes,” he said.

According to people who know about the industry, vendors in the Chinese community not only offer products made in China, but also the innovative cigarettes made in Japan and Korea. For example, some of these cigarettes have a pop-up flavor ball in the filter, which bursts when it is pressed and releases extra flavors such as butter or chocolate. These cigarettes are very popular among trendy young Chinese students, which is a rapidly growing group. “If you want these stylish cigarettes, you have to go to the underground vendors. They are not available in average shops,” an insider said.

Recently, New York has been tightening enforcement on cigarette smuggling. Part of the effort is the new legislation introduced by Sen. Golden to offer cash rewards to whistleblowers. But some Chinese smokers said the legislation would have little effect on the vendors in this community. “As smokers, who would like to report the vendors for some small reward and cut off their own supply of low-priced and high quality cigarettes?” some smokers questioned. Some joked: “Maybe only women who want to force their husbands to quit would take advantage of the legislation.”

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  1. Pingback: Market Booms for Smuggled Cigarettes in Chinese Community (NY) | Counterfeit Cigarettes: An Enforcement Forum

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