Policy Implications

Unintended Consequences

Prohibition of menthol cigarettes would lead to the illegal sale of more dangerous cigarettes than those now being sold by regulated companies, thus fueling an underground criminal enterprise. History shows the likely outcome will be an unprecedented criminal black market of illegal cigarettes, potentially with unregulated ingredients that lack product standards.

If menthol cigarettes were banned, roughly 30 percent of all cigarettes would fall under prohibition. The result?

  • An underground market would exacerbate an already stressed and very active smuggling environment and stimulate countries like China to manufacture and export illegal and potentially unsafe cigarettes. For example, scientific research from the U.S. Centers for Disease Control and Prevention has documented the fact that counterfeit cigarettes contain very high levels of toxic constituents such as heavy metals.
  • Some smokers might try makeshift self-mentholation kits to improvise cigarettes with the menthol flavor by using ingredients from irregular sources and unknown purity.
  • Menthol cigarettes, whether obtained through the black market or from entrepreneurs who self-mentholate, would be sold in streets and neighborhoods outside of the retail environment where federal and state minimum purchase laws are enforced.
  • Forcing 30 percent of the cigarette market underground would be a devastating blow to state and federal governments. These governments balance their budgets with the help of $40 billion in excise taxes and settlement fees they collect each year from the sale of cigarettes.
  • A ban would be exploited by terror and other criminal organizations to finance their activities. In many parts of the country, law enforcement is already wrestling with an active trade in contraband cigarettes. It has been well documented that this illegal activity funds terrorism.

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