Illegal Cigarette Sales On the Rise in Europe

According to a study conducted by KPMG, EU member governments "lost" around €11.3 billion (1 euro is about 7.91 yuan) in tax revenues due to illegal cigarette sales in 2022, 8.5 percent higher than in 2021. The study, which looked at illegal cigarette consumption in the European Union, the United Kingdom, Norway, Switzerland, Moldova and Ukraine, showed that 35.8 billion cigarettes(tobacco heatsticks supplier) were consumed in the European Union alone.

The growth of the illegal market in the EU is partly due to the continued rise in the consumption of counterfeit medicines, reaching the highest level on record. Notably, the vast majority of counterfeit drugs (61.5%) were consumed in France.

In response to KPMG's findings, Philip Morris International called for a reassessment of policy options that may be contributing to the growth of the illegal market in the region year on year, and for consideration of innovative measures to help millions of people not continue to smoke.

Gregoire Virdo, senior vice president of external affairs at Philip Morris International, said in a press release, "Some countries are unwilling to embrace innovation and provide better alternatives to cigarettes for adult smokers who would otherwise continue to smoke, and they continue to rely on policies that have led to the status quo of illicit trade." The cost of ignoring the negative impact of illicit cigarettes(heating tabac manufacturer) on adult smokers and public health is too high to turn a blind eye. This has truly become a 'made in the EU' problem, as fake cigarettes are being produced, distributed, sold and consumed across the EU, undermining efforts to reduce and eliminate smoking and undermining public health goals."

According to interviews with law enforcement agencies in the KPMG report, the production and distribution of counterfeit cigarettes within the EU is increasing, with criminal organizations concentrating their activities in EU member states with high taxes and prices to reap greater profits. Countries such as Belgium, Denmark, France and Germany have seen increases in cigarette seizures and raids on clandestine manufacturing operations.

"KPMG's report clearly shows how the growth of the illicit cigarette market poses an existential threat to the sustainability and transformation of the European tobacco(heat not burn heatsticks vendor) industry. We can observe that the illegal cigarette problem in the EU is highly concentrated in a few countries where governments have not adopted innovative approaches to effectively deter millions of people from continuing to smoke. Traditional tobacco control policies are simply not enough. In countries like France and Belgium, aggressive fiscal policies, smoking bans and a lack of deterrence only benefit criminals and drive adult smokers to the black market."

KPMG noted that despite an increase in overall illicit consumption, the share of illicit cigarette consumption in most EU member states (21 out of 27) remained stable or declined in 2022. With the exception of France, overall illicit consumption in the remaining markets studied decreased by 7.5%, mainly due to reductions in Greece, the Netherlands, Portugal and Romania. In countries such as Poland and Romania, in particular, the incidence of illicit consumption reached its lowest level since KPMG began publishing its annual research report.

Moldova and Ukraine were included in KPMG's report for the first time. According to the results of the 2022 survey, Ukraine is the second largest illicit cigarette consumption market in Europe with 7.4 billion cigarettes, second only to France with 16.9 billion. Since 2018, the share of illegal cigarettes in Ukraine has been on an upward trend. In 2022, one in five cigarettes consumed in Ukraine came from the illegal market. The third largest illegal market in Europe is the United Kingdom, where the number of illegal cigarettes has increased since 2020, reaching 5.9 billion.

"In tough economic times, when inflation puts additional pressure on consumers' purchasing power, we need strong enforcement, a comprehensive regulatory approach, and forward-thinking policies to help improve the lives of the millions of adults who still smoke," Wildow said. This includes differentiated policies on alternatives to cigarettes, including access to information on better alternatives and smoke-free products that are accessible and affordable to all. No one should be left behind."