El Financiero article
During the first three months of the COVID-19 health emergency beginning in March, “sales of cigarettes in Mexico were “extinguished by 45 percent, [an equivalent to] 254.5 million packs,” reported El Financiero on July 27. “This means that in those three months, 209.1 million packs were no longer purchased, compared to 463.6 million in the same period last year, after it was determined that smoking is a risk factor for the so-called SARS-COV2.”
Over the weekend, I spoke to Baja smokers about the news.
“I’ve been smoking about the same amount,” said Elice Tucker, 56, “most of my friends down here in Rosarito, both Mexicans and Americans, are smokers. I believe most of them are smoking the same amount.”
In 2015, Tucker retired and transplanted from Clairemont/University City to the tourist and beach city that’s about 20 miles south of the border. Recently she was part of a massive food drive that assisted about “5,000” Rosarito families, many of which were employees of faltering businesses shut down because of the pandemic.
“I don’t believe the numbers in the [El Financiero] article — whenever I go into a convenience store here, Mexicans and Americans are still buying cigs. The price increase they are referring to, those have been the average prices per pack for at least the last three years.”
“At the beginning of this year the impuesto especial sobre producción y servicios (special tax on production and services) for cigarettes was updated according to inflation,” says the news report, “with an increase of 7 pesos per pack, an average cost of 63 pesos ($2.80).”
“This tax increase has already been carried out and it was a severe blow to the economy of the 15 million smokers in [Mexico],” reportedly said Cuauhtémoc Rivera, president of ANPEC, the National Association of Small Merchants. “What happened in these two [plus] months in proportion to fallen cigarettes [sales] was due to the lack of income because 83,000 jobs have been lost in the country.”
Rivera reportedly said that prior, a person purchased two packs but now their consumption has dropped to one pack, or they opt for the “illegal market,” which is estimated to be more than “6 billion cigarettes a year.”
“Illegal” — pertains to store operators or street vendors, opening up cigarette packs and selling individual cigarette sticks for about 6 pesos each, an equivalent to a quarter apiece.
“People quit smoking and hardly drink because there is no work and money,” Ensenada-resident Alex corroborated. “The minimum wage here in Mexico is equivalent to $80 a week.”
Alex is a wood fabricator by trade and brings his San Diego family cartons of cigarettes from Ensenada, then tacks on a small fee to cover his gas and toll booth expenditures.
“If you are able to work a minimum wage job here during these times, count your blessings, although I can’t imagine some will buy cigarettes and/or liquor while their family eats less.”
“Sometimes I run out of U.S. made cigarettes before my monthly visit, and I buy the Mexican cigs — they are really harsh and they make me cough a lot,” Tucker said. “I normally smoke American Spirit yellow, but they can only be found at the Smoke Shop in downtown Rosarito, and are expensive.
They are expensive in San Diego, usually around $10 a pack at a 7-Eleven or liquor stores. I can get a carton at the duty-free stores in San Ysidro for about $42 (a ten count carton); so that’s less than $5 per pack.”
On a Google search, there are five duty-free stores near the San Ysidro Port of Entry.
“The reason the American Spirits are so much cheaper at the duty-free stores is because of the [non-applied] taxes that California implements,” Tucker explained. “All cigs at duty-free are cheaper, but you have to buy them (limited to one carton per person), and take them into Mexico.”
“So I can’t just walk in like a regular store, stating “I will remain in the U.S.,” pay the extra taxes, and leave?” I asked.
“You have to take them into Mexico after your purchase. Then you can bring them back into the U.S. but it must be declared, and if I bring back a pack or two in my purse, that isn’t a problem.”
“If you don’t bring the carton back directly into Mexico you won’t be able to shop at duty-free again.”
“The duty-free stores require you to register your driver’s license number and phone number — and it is all in their computer. So before you check out, they have to log in with your info. You are not able to take the cigarettes out of the store yourself. You have to sign the receipt which is in three parts — I was told that one part has to go to the government for taxing issues. You get one copy and wait outside for your purchase, then the employee brings out your merchandise in exchange for your receipt. They also have your license plate number, car color, make and model, and they watch you take it to your vehicle and then either follow you to the border entrance via the freeway, or if they are really busy, they have a person standing on the side of the road at the entrance. And via FM radio will know you are coming; if you don’t take that entrance you get reported and get banned from making purchases there in the future.”
Carlos, a 35-year-old business owner from Tijuana has been smoking since his teen years; he didn’t elaborate on how many packs he smokes a week, but he said he smokes about the same amount nowadays as pre-pandemic.
“I’d rather smoke the Mexican Marlboro Blancos (white-colored packs), here they are about 65 pesos ($2.92) per pack.”
“The business of selling cigarettes in Mexico is dominated by Marlboro with 52.6 percent market share, followed by Pall Mall with 17.4 percent and Delicados with 7.4 percent, according to data from Euromonitor International,” says the El Financiero article. “Last year, the cigarette market in Mexico reached a value of more than 4 billion dollars.”