Online marketplaces helping drive contraband tobacco sales
The growth of online illicit trade in the tobacco industry has been nothing short of staggering.
Rothmans, Benson & Hedges (RBH) began actively monitoring online marketplaces for illegal sales in 2018. This was ahead of its first smoke-free alternative to cigarettes, heated tobacco device IQOS, launched in the Canadian market in 2019. This included sales in c-stores as well as an age-restricted IQOS website operated by RBH.
The online marketplaces it was keeping an eye on included Craigslist and Kijiji, and the Chinese-language platforms Vansky and Vanpeople in Western Canada.
“At the time, we were monitoring three RBH products on about six platforms,” says Danny Fournier, manager, illicit trade prevention, RBH. “Over time, we were able to get a good handle on each one.”
That was seven years ago. Today?
“We’re now monitoring six of our products over 25 online sales platforms in Canada,” he tells Convenience Store News Canada (CSNC).
READ: Rothmans, Benson & Hedges asks Ontario government to ban promotion of contraband tobacco
According to Fournier’s estimation, it was late 2022 when RBH began seeing ads for conventional contraband tobacco and vaping devices populating online classifieds.
Now up to 50% of the total tobacco market in Ontario is contraband, according to a 2024 Ernst and Young report commissioned by the Convenience Industry Council of Canada (CICC).
The number of online platforms where contraband is advertised has grown exponentially. While 90% of online contraband is still sold on four or five major platforms, the remaining is scattered across smaller platforms, with sellers also openly using social media posts to reach potential buyers.
In Toronto on March 25, the scale and scope of this challenge was the topic of a Canadian Forum Against Online Illicit Trade hosted by RBH and security services company ECS Canada.
Fournier, who spent 25 years in law enforcement leading investigations into organized crime activity, was a headline speaker. He is also an expert witness on contraband tobacco and organized crime, having provided over thirty-five expert-witness reports and opinions to support law enforcement agencies and prosecution services nationwide.
He was joined by Sean Sportun, chair of Toronto Crime Stoppers.
“Through RBH’s monitoring program, we’ve had since November 2022 a little over 12,000 ads removed from online sales platforms and forums,” says Fournier. “These ads have mostly been from illegal players with access to large quantities of contraband.”
A clear signal of organized crime’s involvement in illicit trade. About half of those 12,000 ads were posted in Ontario. Given law enforcement cannot possibly manage 12,000 investigations, RBH turns directly to the platforms to have the ads removed.
“Our approach is to stop the interaction, not the seller,” he says. “It’s just physically impossible to go after each and every offender, but if we can remove the offer, we can yield some influence on trafficking.”
AI is now used to assist in tackling the growing number of ads.
“AI is helping us detect illegal online sales at scale and also get better at detection," says Fournier.
Sellers have been known to create ads with abbreviations or coded language or mix a tobacco sale with a legitimate product to escape detection. While AI is learning to snuff out such tactics, "there is still a need for human validation, if only to validate the machine learning process and communicate with law enforcement and the online sales platforms,” says Fournier.
The challenge, of course, is organized crime groups are also harnessing AI.
“AI definitely represents an opportunity for us, but at the same time it can also be used by criminals to facilitate the commission of crimes committed online. Keep in mind this is a ‘’machine learning’ technology so the machine gets as good as you teach it to be … or as bad,” he explains.
While measures like RBH’s is crucial to helping minimize contraband, he says efforts between the private sector, government, community programs like CrimeStoppers, retail and the consumer must be united “It has to be shared responsibility,” underscores Fournier.
