A major enforcement action has exposed an alleged scheme involving the repackaging of expired, smuggled foreign cigarettes under the cover of Export Processing Zone (EPZ) incentives, raising concerns over large-scale tax evasion, regulatory abuse, and public health risks.
The case came to light after the Federal Board of Revenue conducted a raid at M/s Pioneer Tobacco & Trading Company, located in the Export Processing Zone, Karachi, reported ProPakistani.
During the operation, enforcement teams seized approximately 4.5 million sticks of smuggled foreign cigarette brands, including Marlboro, Camel, Benson & Hedges Nero (Blue and Red), and Cleopatra. Authorities also confiscated large quantities of cigarette filters, acetate tow, cigarette paper, and expired sheesha flavors.
Officials suspect that expired or near-expiry cigarette stocks were procured from international black markets at heavily discounted prices after being rejected by authorized distributors due to shelf-life concerns. Such products were allegedly smuggled into Pakistan, repackaged, and relabeled to conceal original manufacturing details and expiry dates.
Industry sources state that cigarettes generally have a shelf life of three to six months, depending on storage conditions. Beyond this period, tobacco degrades, loses flavor, and may develop mold, making it unfit for consumption.
Representatives of Pakistan Tobacco Company, which owns the Benson & Hedges brand, and Philip Morris International, owner of the Marlboro brand, confirmed that M/s Pioneer Tobacco & Trading Company is not authorized to import, manufacture, or export their brands. Any such activity, they said, would constitute an illegal and unauthorized use of intellectual property.
Investigators believe the scheme may involve the misuse of EPZ incentives. Under various statutory regulatory orders, goods imported into and exported from EPZs are exempt from customs duties and sales tax. These concessions are intended to promote exports but are suspected to have been exploited to import expired cigarette stocks, repack them within EPZ premises, and divert them into the domestic market—an apparent violation of EPZ rules.
Trade data from Volza indicates that the same business group has exported cigarette consignments to several developing markets, including Ghana, Colombia, Vietnam, and Syria, where regulatory oversight is relatively weak. Authorities are now examining whether similar repackaging practices occurred across other facilities operated by the group, and whether significant quantities were diverted into Pakistan’s local market without payment of applicable taxes.
Corporate records show that M/s Pioneer Tobacco & Trading Company is linked to a Karachi-based business family. Muhammad Arif and Muhammad Akif are reportedly associated with multiple tobacco-related entities, including M/s GB Global, M/s Eastern Industries (Pvt.) Limited, M/s Golden Cigarette Factory, Hub Tobacco Lasbela, and M/s Marsons Group. Marsons Group is involved in the trade of cigarette manufacturing and packaging machinery, which investigators believe could facilitate large-scale repackaging operations.
Sources allege that while expired foreign brands were repackaged under EPZ facilities by Pioneer Tobacco in coordination with associated firms, the group’s local cigarette brands—such as Nine, Master, Liston, AA Gold, Pioneer, and Rocco—were manufactured by Eastern Industries (Pvt.) Limited.
Following the FBR raid, M/s GB Global obtained a stay order from the court of the Senior Civil Judge, Malir, restraining tax authorities from conducting enforcement action at its premises, adding a legal dimension to the case.
Regulatory experts note that repackaging or selling expired cigarettes is illegal in most jurisdictions. Tobacco products are required to carry mandatory health warnings, tax stamps, and manufacturer markings. Any tampering with packaging or expiry information renders the product illicit, non-tax-paid, and deceptive to consumers, while also raising intellectual property violations.
Pakistan already faces substantial losses from illicit tobacco trade. The alleged exploitation of EPZ incentives, if proven, would further undermine revenue collection, distort market competition, and damage Pakistan’s trade credibility.
Beyond financial implications, officials warn of serious public health risks, as consumption of expired or improperly stored tobacco products may increase exposure to harmful chemical byproducts.
Following directives from Shehbaz Sharif, the Federal Board of Revenue has intensified enforcement against tax evasion in the tobacco sector, indicating that investigations will continue despite legal challenges.
The case has renewed scrutiny of regulatory oversight within Export Processing Zones and raised questions over whether existing incentive regimes are being misused at the cost of public health, lawful trade, and the national economy.
