WHO IS SMUGGLING?
Question:
And as far as Canada goes I think cigarettes are already about $5.00 a pack. It would be interesting to know how that has affected smoking there.
Answer:
-U-haul here in Canada are taking advantage of their exclusive services...
Had their been another company provding similar services at a reasonable
price, I would have gone another way.
I recently rented a 24 footer to move my household, and it was in bad shape,
had Louisiana plates. They could not promise an appliance hand truck ( I did
manage to get one, but I was nervous until the last morning)
They do not take bank/debit cards and I judt did not like their arrogant
attitude in general.
There are a few scenarios of how the smuggling operates, freelancers,
small operations with some organization, and large networks of
organized rings. All share the common goal of avoiding Michigan's
cigarette tax.
The freelancers are mostly people who live near the borders and are
mainly interested in averting the tax or making extra cash. They may
drive to the store in Ohio and save $5.00 per carton. A small to
mid-size car can hold as many as 600 cartons of cigarettes. They may
sell to friends at $4.00 less a carton and profit nearly $600; not a
bad take for two hours work. For example, in mid- 1994 the State
Police posted surveillance at four party stores on I-69 in Indiana.
Within four hours, 180 Michigan vehicles were spotted coming out of
the party stores with cigarettes. Most smuggled small amounts and no
arrests were made.
-Smugglers become more organized as the problem moves to the retail
venue. One person with some motivation and a U-Haul, will take a truck
down to North Carolina and fill the orders that he has taken from a
group of convenience stores. A carton in North Carolina is $7.00
cheaper than here in Michigan. The smuggler sells to the store owners
at $3.00 cheaper. A 17' U-haul can hold as many as 200 cases or 12,000
cartons. The store owners can make up to $36,000 and the smuggler can
make up to $48,000.
The typically more organized groups are where a bulk of the smuggling
problem lies. These groups have already established lines used to
smuggle illegal substances. It is very simple to include cigarettes in
their repertoire of contraband. These groups then can sell to whomever
they want, small convenience stores, larger chains, wholesalers,
anyone willing to buy them. They make millions of dollars every year
from this illegal practice. A semi- trailer can hold as many as 700
cases or 42,000 cartons. This represents $315,000 in unpaid taxes to
the state. Who knows how many semi trailers on Michigan roadways are
carrying "buttlegged" cigarettes.
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