Looking back over the year that was, a number of developments stand out in different areas: namely mergers and acquisitions, the growth in illicit vapes, the integration of tax stamps into wider e-governance programmes, and a greater focus on sustainability in tax stamps. In the meantime, the ongoing rollout of national tobacco track and trace systems under the WHO FCTC Protocol continues at a sluggish pace.
In 2024, the authentication sector experienced significant consolidation through several key acquisitions, notably by Crane NXT and Authentix.
With its acquisition of OpSec Security in May, followed by a definitive agreement to buy De La Rue’s Authentication division in October, Crane NXT secured its entry into the tax stamp arena, given that both OpSec and De La Rue provide tax stamp and traceability systems to numerous countries.
A third acquisition, a few weeks later, saw Crane NXT purchase the smart packaging assets of TruTag Technologies.
Meanwhile, Authentix, already a key player in tax stamps, completed an asset purchase agreement in July with Nanotech Security, with the aim of strengthening its banknote and brand protection offerings. Over the past few years, Authentix has built its portfolio through diversified acquisitions, including Security Print Solutions, Traceless Security, Strategic IP Information, and Royal Joh Enschedé (long-term provider of the Dutch tobacco tax stamp).
These acquisitions are part of a consolidation trend in the authentication sector to address challenges such as the need to provide end-to-end, physical/digital solutions that span anticounterfeiting, brand protection, supply chain integrity, and digital trust, across a broad spectrum of industries.
In addition, there is the challenge posed by innovations such as blockchain, IoT and AI, which are simultaneously solving and creating vulnerabilities. Companies are positioning themselves to face these looming challenges/opportunities through consolidating their expertise and investing in these innovations as tools for authentication, tracking, and analysis.
In 2024, the proliferation of illicit vaping products continued to escalate, challenging regulatory authorities worldwide. The United States, in particular, continued to be flooded by unauthorised vapes, mainly from China, with some illicit brands ironically carrying sophisticated security labels (see Sven Bergmann’s TSTN November 2024 article). The same was true in the UK, which has since decided to implement excise stamps on vapes, from 2026, to accompany the introduction of a new vape duty.
Another development in 2024 was the move by some governments towards incorporating tax stamp and traceability programmes into an overall e-governance system, which is not something we see often. Indeed, excise management systems are usually kept apart from broader tax systems due to the specialised nature of excise duties, higher evasion risks and compliance requirements, and complex operational conditions.
However, one government that we did see moving toward such integration in 2024 was Ukraine, which is developing its tobacco traceability ‘e-Excise’ system for incorporation into its overall e-governance platform. This includes linking the system to the ‘Diia’ mobile app and online portal, which connects half of Ukraine’s population with more than 120 government services.
Another country was Pakistan, where the tax stamp and traceability programmes already in place on tobacco products, fertiliser, sugar, and cement, provided the catalyst for the prime minister to launch a plan to fully digitise the Federal Board of Revenue (FBR), with support from the World Bank. One of the objectives of the plan is to merge existing traceability programmes into one server to be shared with the National Database and Registration Authority (NADRA) and relevant ministries, with the aim of achieving full data integration across multiple government departments.
We also heard that India, the biggest user, by far, of alcohol tax stamps has increasingly been taking sustainability issues into consideration when ordering tax stamps. This follows a countrywide government ban, implemented in 2022, on single-use plastic items thinner than 100 microns.
For example, Ladakh became the first state to adopt a tamper-evident sustainable stamp, made from indigenous, 100% biodegradable paper. On the reverse side, the paper is silicone-coated and embedded with security features typical of a hologram – yet without any plastic layer.
Meanwhile, other states resisted the move to sustainable stamps, preferring to stay with full polyester holographic labels – which still represent 50% of all tax stamps used in the country, despite the ban.
At this point, it is not clear whether all polyester holograms will eventually disappear from the tax stamp industry in India, but the pressure is definitely on for excise departments to look for sustainable materials, products, and systems.
A yearly review wouldn’t be complete without mentioning the WHO FCTC Protocol, in particular the status of parties’ implementation of national track and trace systems on tobacco products.
As we heard during the Third Meeting of the Parties to the Protocol (MOP3), back in February, only half of the 68 (now 69) parties had a system in place, and it was often incomplete and not in line with Protocol obligations.
The problem is that many parties don’t quite know where to start. They need help from a financial perspective as well as in terms of identifying system architecture that is compliant with the Protocol’s governance model.
‘Without a substantial increase of the budget for technical and financial assistance to low and lower-middleincome countries (which represent more than one third of parties), it is very unlikely that we will achieve higher implementation rates,’ warned Luk Joossens of Smoke Free Partnership.
At this point in time it is not clear whether such an increase will be implemented.
I wish you and your loved ones a joyful and rejuvenating festive season and a new year filled with promise and fresh opportunities.
Nicola Sudan
Editor
