One in 10 Smoked Cigarettes in Europe is Illicit

Business | June 25, 2014, Wednesday // 15:22|  views

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One in 10 smoked cigarettes in the EU in 2013 was illegal, shows a survey of KPMG, quoted by

In it took part the tobacco giants British American Tobacco, Imperial Tobacco, Japan Tobacco and Philip Morris International. 

The survey shows that 33% of the consumed cigarettes were the so-called “illicit whites” - cigarettes manufactured for the sole purpose of being smuggled into and sold illegally in another market. They usually do not pay tax in the country where they are made. In most cases Illicit Whites are produced in countries outside the European Union and are sold in EU countries at a price much lower than the average price of cigarettes in the country.

According to the KPMG survey, Bulgaria is the fifth largest black cigarette market. The share of illicit whites in Bulgaria was 18.2%. 

The firs four positions are taken by Latvia (28.8%), Lithuania (27.1%) and Ireland (21.1%) and Estonia (18.6%). 

The largest number of illicit whites was smoked in Germany and France – 11.3 B and 9.6 B pieces, respectively.

The survey finds that at such levels of illegal trade, the governments of the EU member states lose around EUR 10.9 B per year. 

According to the data the consumption of illicit whites in the EU in 2013 has increased by 15% year-on-year, but as a whole the trade remains stable and even posted a small decrease – from 11.1% in 2012 to 10.5% in 2013. 

This was mainly due to a considerable drop in the cigarettes who are legally produced, but are illegally smuggled from countries with lower excise duties into countries with higher excise duties. 

At the same time the share of the contraband cigarettes – the fake and the illicit whites cigarettes has dropped by 26.7%.

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Tags: illicit whites, cigarettes, contraband, smuggle, KPMG, British American Tobacco, Imperial Tobacco, Japan Tobacco, Philip Morris International


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