New tax stamp survey reports steady global growth

The second survey of the global tax stamp market – Tax Stamps: A Technical Study and Market Report – has been published by Reconnaissance International.

Although more tax stamps are produced every year than any other security-printed item except banknotes, this is the only report of its kind to cover the global stamp market for alcohol and tobacco. 

The report looks at how governments can develop effective tax collection regimes through the use of tax stamps, and how suppliers of components, products and systems can drive forward – and benefit from - the tax stamp market. 

Tax stamps are growing – both in quantity and quality – and will continue to do so over the next five years. According to the report, 150 billion cigarette and spirits stamps were used in 2010 (compared to 49.3 billion in 1990), and 170 billion are forecast for 2015. Today, stamps are used in 81 countries for cigarettes, alcohol, or both (compared to just 20 in 1990), and at least ten countries are planning to introduce them for the first time.

Regarding cigarette stamps, even though global tobacco consumption is declining, stamp usage will continue to grow, in line with rising populations and new countries introducing them. By 2015, the report projects 6 percent higher volumes than 2010, or 134.7 billion stamps.

Growth regions will be Eastern Europe and CIS (12.3 percent), Asia (15.2 percent) and Africa (30 percent). However, usage will decline in Latin America (by 6.5 percent), North America (10.7 percent) and Western Europe (13 percent).

The report states that stamps for spirits will grow by 55 percent to 35.4 billion in 2015, in line with increasing consumption, and new country adopters. Growth will be in Africa (115 percent) and Asia (107 percent). This will far outweigh the decline in Western Europe (by 3.8 percent), and Eastern Europe and CIS (4.6 percent). Volumes will remain static in Latin America.

In addition to spirits, many stamp programs are extending to wine and beer. As global wine consumption is higher than spirits (40 billion bottles in 2010), this trend will significantly impact alcohol stamp volumes.

Tax stamps are also extending to other products such as foods and DVDs, which although not always subject to excise, do generate other taxes, which are also lost to illicit trade.

But the real change comes from how tax stamps have evolved, from paper-based labels with little or no security into sophisticated security devices with unique codes, which have become the key components of integrated systems for track and trace, monitoring and auditing.

At least 40 countries have upgraded their existing stamp programs within the last ten years – or are in the process of doing so – with advanced security features and – in some cases – track and trace technology. 

And more countries will continue to do so, not only because it makes financial and logistical sense, but because, in the case of tobacco, they will be obliged to anyway, in compliance with the WHO Tobacco Illicit Trade Protocol, which is mandating a global track and trace system. 

The protocol has just this week been ratified at the Framework Convention on Tobacco Control’s Conference of the Parties in Seoul. The report is, therefore, especially timely since, although the Protocol does not need to be implemented for five years, some countries – in particular those with cigarette programs already in place - will comply with it before then. And the information they need to do so is provided in the report. 

In 140 pages, the report covers the factors behind tax stamp deployment for cigarettes and alcohol, how stamps work, the impact of international regulation, technologies for production, application and authentication, and the need for enforcement. There are also chapters on the global and regional use of stamps, and case studies that delve more deeply into the issues driving particular countries to adopt or upgrade their tax stamp system.

The report is available for GBP £875; the order form can be downloaded here.

Pictured: Batches of barcoded tax stamps ready for distribution

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