The image of a hidden Incan Temple isn't far off from what reports in Tobacco Atlas say hidden illegal cigarette factories look like. They are surrounded by high walls, covered in thick tall trees to obscure any vision of the activities that happen inside and are often located in the countryside away from any major towns of cities.
Hidden cigarette factories give the big tobacco companies the ability to produce cigarettes with fake codes to give the impression they were produced at a registered factory. Tracking and tracing of cigarettes by the Codentify system which has been developed by the big tobacco companies themselves, to help regulate themselves, is being used to falsify the origin of cigarette packets so that they can be distributed via the black market to Western European countries. The Codentify tracking and tracing system has bugs that allow these hidden factories to duplicate codes and to make it seem like packets of cigarettes have been taxed and are therefore legitimate while they are really not. By easily duplicating coding on cigarette packets with Codentify, the big cigarette companies can imitate legitimate 'white cigarettes'.
While the world's four leading multinational tobacco companies, Philip Morris International, Japan Tobacco International (JTI), Imperial Tobacco, and British American Tobacco (BAT) all deny having hidden illegal cigarette factories, the truth is that two have already been discovered by authorities in the United Arab Emirates and Belarus. But these two factories are only a small fraction of the network of hidden illegal factories that the big four tobacco companies have set up, are operating and using to supply the black market with illicit cigarettes.
The Codentify system was developed by the big four cigarette companies to aid tracking cigarettes by using unique codes and then to allow for their tracing so as to help better regulate and police the industry. But these hidden factories operated by the big four tobacco companies exploit the bugs of the Codentify system and easily duplicate codes from legitimate sister factories so as to produce cigarette packets that seem legal. All the while, cigarette companies are trusted to regulate themselves and are using the holes within their own tracking and tracing system to flood black markets with illicit cigarettes.
Not only is it negative to fund criminal activity on the black market that is operated by criminal gangs and terrorist organizations, these cigarette sales also have no positive impact on the countries they are sold in, since no tax revenue is channeled to the government, and society as a whole misses out on these vital funds.
The problem has gotten so bad that an investigative report showed that within a few hours, a team in West London managed to buy a swag of illicit cigarettes, either produced in illegal hidden factories or with duplicated track and trace coding with the flawed Codentify system.
In the end, authorities will need a better system to monitor the manufacture of cigarettes and then trace them globally without giving the big four tobacco companies the trust they don't deserve to regulate the system themselves. Society as a whole will be better off when cigarettes are only able to be produced from registered factories where an independent tracking system is in place, ensuring taxes are paid and the public as a whole benefits from the sales of those products.