Illicit cigarettes now account for roughly one in four cigarettes on the market, which generates earnings of around US$1 million per container shipment for the importers, Carreras has said.
“They have a lot of wiggle room for pricing,” said Chairman of Carreras Limited Patrick Smith at the cigarette trader’s annual general meeting on Wednesday.
Since illicit cigarette importers evade taxes, they have greater price flexibility, Smith said.
Carreras, the largest cigarette distribution network in Jamaica, faces legal and underground competition vying for market share.
In 2008, illicit cigarettes accounted for between 3.0 per cent and 10 per cent of the market.
Now it is 27 per cent of the cigarette market,” he said.
Illicit cigarettes include counterfeit products as well as smuggled official brands, both of which evade taxation. The company tracks the presence of illicit cigarettes through retailer feedback and ‘butt tests’, which involve examining discarded cigarette butts at events. The uniformity of cigarette design becomes stylistic in the butt.
Smith noted a decline in illicit cigarette trade during the pandemic, when overseas factories shut down and shipping rates soared, reducing profits for traffickers. However, as trade resumed, illicit products re-entered the market.
“The rewards can be high,” Carreras says in a report on illicit trade on its website. “Just one shipping container full of trafficked cigarettes could earn a criminal gang more than US$1 million,” the cigarette trader said.
A decade ago, Carreras reportedly held 98 per cent of the market. On Wednesday, management declined to speculate on the current sector size, citing concerns that doing so could provide insights to illicit traders.
Nevertheless, Carreras reported record sales of $19.5 billion for the financial year ending December 2024, reflecting a 41 per cent year-over-year growth, largely driven by its first price hike in six years, Smith noted. The company changed its terminal accounting period from March to December in 2023.
The upward trend in sales continued into the first quarter, ending March 2025, with sales up 63 per cent to $4.4 billion, and profit surging 158 per cent to $1.4 billion, compared with a year earlier.
Carreras estimates that illicit cigarettes cost the Jamaican government up to $3 billion in lost general consumption tax and special consumption tax. The special consumption tax generated on the company’s record revenue last year amounted to nearly $6.9 billion and $1.4 billion for the March 2025 quarter.
The company has identified 28 types of illicit cigarettes circulating in Jamaica, but declined to name the leading brands.
Carreras primarily sells Craven ‘A’, Matterhorn, Dunhill, and Rothmans. To combat competition from cheaper illicit cigarettes, it introduced Pall Mall as a fighter brand. Two years ago, the company also entered the vape market with Vuse, which is expected to grow 70 per cent in sales this year, though still from relatively low volumes.
Among its legitimate competitors, Musson Group distributes Marlboro, the world’s leading cigarette brand, though it caters more to Jamaica’s tourist market than local consumers.
Smith said that it can be difficult for consumers to distinguish illicit from official products.
Carreras Corporate Affairs Manager Imega Breese McNab said illicit cigarettes primarily enter Jamaica through “transshipments at the ports”.
“This is a global issue,” Breese McNab said.
