Counterfeiting is a new ‘industry’ prompted by the lure of profit. From fake shoes and bags to fake cosmetics and cigarettes, the counterfeiting industry offers a growing range of products covering literally everything, even something beyond your imagination.
Cigarette manufacture is widely known for its profitability around the globe, therefore becoming one of the most favorable areas to the counterfeiters.
‘The Counterfeiting Kingdom’
To the far southeast corner of China, there is a remote village in Fujian Province, called Yun Xiao, which means ‘cloud’. It was deemed as ‘The Counterfeiting Kingdom’ by some people, and was the prior supplier for most fake cigarette markets on the earth. That didn’t come for no reason.
It is said even CIA agents were astonished by the quality of fake cigarettes from Yunxiao, as it tastes surprisingly better than some of the branded cigarettes!
The cigarette counterfeiting industry was so prosperous there, that overall production reached 400B per year at its peak. The production capacity, together with tax evasion, reduced the smuggling cost to a margin beyond thought.
So how did this small remote village become a cigarette counterfeiting workshop?
Professional cigarette manufacturer
The cigarette manufacturing history in Yunxiao village can be traced back to the early-20th century when PRC was not yet built, and villagers at that time were making flue-cured tobacco in traditional ways.
In 1952, the county administration made an official acquisition from one of the personal tobacco factories and founded a state-owned cigarette manufacturer called ‘Yunxiao Cigarette Factory’, which was rapidly closed within 1 year due to marketing failure.
In 1970, the state-owned factory was rebuilt according to the Province administration, and strived to pave the way with only 2 machines until 1978. Thanks to the China Opening-and-Reforming Policy, the factory received over 4M RMB state investment and loans to update all the facilities and rent more plants.
In 1985 the factory started production of filter-tip cigarettes and production reached 60 billion, and soon becoming 141st out of the 500-most-profitable factories in China in 1990.
Time flies as the Millenium year came near, and the Chinese government published policies of industry adjustment on state-owned businesses, which also made Yunxiao Cigarette Factory become history.
Greed blinds the eyes
It is widely known that the cigarette industry is a profitable business, and most governments impose a heavy tax on the industry. Witnessing the success of the state-owned factory, some villagers in Yunxiao were seduced by money and tried to start hand-made cigarettes for illegal trade.
The business didn’t take off until some villagers managed to smuggle a few machines to enlarge their tax-free cigarette workshop. To make things worse, soon the close of the state-owned factory offered them plenty of professional workers.
At first, the counterfeiting manufacturers were only imitating branded cigarettes and selling in domestic market, while soon they started updating technic and processes to march to international markets.
Cigarette counterfeiting becomes a local industry
The industry scale of counterfeiting soared soon at Yunxiao village, as the professional technique and multiple-method sales network inherited from the former state-owned factory help increased both manufacturing and marketing.
Their marketing strategy was original but effective: package with the most popular cigarette brand.
Their production technique was improved as their diligence and spirit of workmanship.
They even formed an industry chain on manufacturing, as family workshops distributed with parts of production procedures: tobacco planting, tobacco disposal, cigarette rolling, and packaging.
In a short time, packaged with the renowned ‘Chunghwa’ brand, a vast quantity of low-price fake cigarettes from Yunxiao were smuggled to the USA, Canada, and Europe. According to investigations, products from Yunxiao acquired an amazing market share of fake cigarettes at over 80% overseas, and over 95% domestic.
The ‘fake cigarettes‘ were so good in quality, that it even tastes better than their real-branded counterparts, or you may say, the only difference between Yunxiao cigarettes and branded cigarettes, is a brand.
Neglecting the law-breaching consequences, fake cigarette manufacturing brought great fortune to the villagers. The indulged workshops soon attracted more and more local folks to participate in the short-cut to millionaires. It was said at its peak, 300 thousand out of 400 thousand local population took part in the fake cigarette industry.
Enormous fortune brought by the industry covered the eyes of the locals and twisted their values. Even children from their families were called on to help with the manufacturing during busy season time, rather than going to school.
The prosperity of the fake cigarette industry also led to development of relating industries, such as traveling, hotels, restaurants, printing, etc. All this in turn prompting the overall development of the fake cigarette industry at Yunxiao village.
The illegal industry prosperity harmed national benefit by avoiding taxes, harmed cigarette manufacturing counterparts by low prices, and also harmed their customers by toxic ingredients.
Harms of Fake Cigarettes
Apart from the regular toxics from all cigarettes, fake cigarettes bring more harm on the following factors:
- In order to improve the taste, the quality check of fake cigarettes is not strict on tobacco tar. With over 50mg tar each, the harms will increase on leading to cancer of hearts, lungs, and brains.
- The environment of fake cigarette manufacturing is often not clean, and tobacco leaves and packages are easily polluted with germs and viruses.
- During the process of transportation for fake cigarettes, they are often hidden between chemicals, fuel, soaps, or other goods with strong smells. Toxic chemical reactions may happen and bring harm to smokers.
Fall of the ‘Kingdom’
The local and provincial administrations have always been fighting hard with the Yunxiao fake cigarette industry, ever since its commencement in 1992.
On one hand, local police conduct regular and random checks on local workshops, while on the other hand, the provincial commerce department helped the village with establishing other industries.
Not only that, the professional workers of cigarette manufacturing in Yunxiao were employed by branded cigarette factories to help them improve their technique.
With all these measures taken, the ‘Kingdom of Fake Cigarettes’ finally fell, and will never come back again.