Illegal Cigarette Sales Continue To Grow In The EU

Last year, the EU illicit cigarette(Heated tobacco manufacturer) market continued its growth trend with an estimated increase of 0.7%, mainly due to the expansion of illegal markets in countries such as France and Belgium.


In 2022, KPMG was commissioned by Philip Morris Products to conduct an annual survey on illicit cigarette(HEECHI Heat sticks supplier) consumption in the European Union, the United Kingdom, Norway, Switzerland, Moldova and Ukraine. The results showed that 35.8 billion illegal cigarettes were sold in the EU, costing governments an estimated €11.3 billion in lost tax revenue, an increase of 8.5% over 2021.


The growth of the illegal market in the EU is partly due to the continued rise in the consumption of counterfeit products, which has reached the highest level on record. Notably, the vast majority of products consumed in France (61.5%) are counterfeit and the country remains the largest illicit market in the EU, currently accounting for 47% of total illicit cigarette consumption in the region. An estimated 8 billion illegal cigarettes consumed in France are counterfeit products.


Gregoire Verdeaux, senior vice president of external affairs at Philip Morris International, said: "This has effectively become a 'made in the EU' problem, where counterfeit cigarettes are produced, distributed, sold and consumed in EU countries, undermining efforts to combat cigarette consumption and undermining public health goals."


KPMG's analysis shows that illicit cigarette consumption is generally on the rise, but 21 out of 27 EU member states reported that levels of illicit cigarette consumption were stable or declining in 2022. With the exception of France, overall illicit cigarette consumption in the remaining markets fell by 7.5%, driven by declines in Greece, the Netherlands, Portugal and Romania. In Poland and Romania, in particular, illegal cigarette sales fell to their lowest levels since KPMG published its annual study.


Moldova and Ukraine are included in the KPMG report for the first time. According to the results of the 2022 survey, Ukraine is the second largest market for illicit cigarette consumption in Europe, with 7.4 billion illegal cigarettes sold, second only to France with 16.9 billion. Since 2018, the share of illicit cigarettes in Ukraine has been on an upward trend - in 2022, one in five cigarettes consumed in Ukraine came from the illicit market. Since 2020, illicit cigarette sales in the UK, the third largest illegal market in Europe, have continued to grow, reaching 5.9 billion cigarettes.