When we first established Microkhan HQs a few years back, we were immediately struck by the nabe’s vibrant cigarette bootlegging scene. For a while there, we couldn’t walk 10 feet without having someone pull up alongside us and whisper, “Newport, Newports.” (The pace of solicitations has since decreased a bit, in part due to mounting legal pressure.) We were always mystified as to how such semi-covert bootlegging could be a profitable enterprise, given the sellers’ relatively tiny markup. But then New York broke down the math, and we began to understand the enterprise’s upside.
Yet the Newport hawkers on Lenox Avenue are true small fry compared to their counterparts abroad. In fact, according to the latest report from CPI’s brilliant Tobacco Underground series, cigarette smuggling is almost solely responsible for a strongman’s reign in the Balkans. Montenegrin Prime Minister Milo Djukanovic, the authors contend, continues to dominate his country due to the illicit wealth he’s accured from peddling bootleg cigarettes—primarily to the Italians across the Adriatic. And Italy ain’t too happy about the situation, especially since its Mafia is profiting like crazy:
According to the Italian indictment, from 1994 to 2002, during Djukanovic’s long tenure, Montenegro was a haven for cigarette smuggling by two of Italy’s mafia syndicates: the Neapolitan mafia, known as the Camorra; and the crime family of the Apulia region, in Italy’s boot heel — the Sacra Corona Unita. Both syndicates set up shop in Montenegro. Almost every night dozens of pilots steered a fleet of large speedboats crammed with cigarettes across the Adriatic from the Montenegrin port of Bar to the Italian city of Bari and nearby. According to court records, during those eight years an extraordinary one billion cigarettes per month — 100,000 cases — were smuggled out of Montenegro, most of them Marlboro and Marlboro Light. Once in Italy, the untaxed cigarettes were sold by the mafia on the black market…
Starting June 3, Bari Judge Rosa Calia Di Pinto will hold a preliminary hearing to decide whether or not the evidence gathered by prosecutors is enough to put the indicted on trial. The judge will hear a story of a “mafia war” stretching into 10 countries: not only Italy and Montenegro, but also Serbia, Croatia, Greece, Germany, Switzerland, Cyprus, the Netherlands, Liechtenstein, Aruba, and the United States. So far, two key witnesses and five others mentioned in the case have been murdered.
Read the whole thing. If you smoke, it might convince you to hang up your lighter.
Jordan // Jun 5, 2009 at 6:11 pm
This seems like one of the big issues that any advocate of drug legalization is going to have to think about. Unless the government was willing to sell drugs at cost or even at a loss (which would remove taxation as one of the selling points of drug reform), there will always be people who are going to sell them illegally at lower cost. In addition, you’re talking about a problem that will have an already extant infrastructure, which will make illegal distribution and sales that much easier. Admittedly the problem would be much smaller than its current form as the margins would be slashed, but it’s still something to keep in mind.
Brendan I. Koerner // Jun 5, 2009 at 8:10 pm
@Jordan: Believe it or not, this exact same thought occurred to me c. 12:30 last night, right after I’d put my son back to sleep. Guess sheer exhaustion made the brainstorm disappear.
Yeah, agreed–I think a continued illicit market would cut into profits. Then again, why hasn’t that happened with alcohol? Though I love posting about moonshine busts, I don’t think illegal liquor is one of our greatest criminal ills.