May 24, 2019
53 billion illegal cigarettes consumed in the European Union last year
New KPMG report for
Non-EU contraband and counterfeit increased to 88%
This Smart News Release features multimedia. View the full release here: http://www.businesswire.com/news/home/20160608005602/en/
This annual study investigates the levels and drivers of counterfeit,
contraband and Illicit Whites2 in the 28 EU countries, as
While the illegal cigarette market in the EU accounts for around 10% of total consumption, this volume has declined marginally compared to 2014 as a result of several factors including increased activities to fight illegal trade and improved economic conditions.
The industry believes their strict supply chain controls and shared intelligence, combined with authorities’ law enforcement, has resulted in a decline of around 20% in the illegal flow originating from within the EU. This means that 88% of illegal cigarettes now come from non-EU countries.
A key trend identified in the KPMG report is the growing proportion of counterfeit and Illicit White brand flows compared to previous years. Illicit Whites accounted for over one third of all illegal cigarettes, whilst counterfeit grew to 4.7 billion cigarettes. The largest portion of Illicit Whites – 5.3 billion cigarettes – were in packs with Belarusian labelling.
The industry believes the changing mix of source countries and the increasing number of Illicit White brands demonstrates the adaptability of criminals who profit from the illegal tobacco market.
Key insights of the report:
- Total illegal cigarette volumes accounted for 9.8% of all cigarettes consumed in the EU in 2015, representing 53 billion cigarettes;
Polandand Francerecorded the highest volumes of illegal cigarettes;
- 88% of illegal cigarettes were coming from non-EU contraband and counterfeit;
- Illicit Whites represent over one third of the illegal cigarettes consumed in the EU, 28% of which were cigarettes in packs with Belarusian labelling;
1.3 billion Illicit White cigarettes are thought to originate from the
Jebel Ali Free Trade Zone in the
United Arab Emirates;
Belarusis the largest source country for Illicit Whites;
- Counterfeit increased by 28% to 4.7 billion cigarettes;
- Seizures of illegal cigarettes with the support of the EU Anti-Fraud Office (OLAF) doubled in 2015. In excess of 0.6 billion cigarettes were seized, compared with 0.3 billion in 2014;
If the illegal volume in the EU had been consumed legally, an
additional tax revenue of
EUR 11.3 billionwould have been raised.
The industry believes the 2015 report results indicate that the increased joint efforts of governments, law enforcement agencies, manufacturers, and retailers contribute to efficiently addressing the illegal cigarette flows in EU. As criminals increasingly concentrate on illegal products such as Illicit Whites and shift to new source countries outside the EU, it is clear that efforts to fight illegal trade must be maintained in order to disrupt criminal networks.
The 2015 KPMG study on the illicit cigarette market in the EU,
NOTES TO EDITORS
KPMG Study on the illicit cigarette consumption in the EU:
KPMG has conducted this study every year since 2006. Since 2013, the study has been commissioned by all four major tobacco manufacturers –BAT, Imperial, JTI and PMI.
The study is the only comprehensive annual measurement of the black market for cigarettes in the EU. Access to a wider set of data sources, as well as methodology improvements in line with feedback received from external stakeholders, have allowed KPMG to further refine the completeness of the analysis over the years. The study’s methodology is presented in detail in the report.
The OECD considers the methodology of
It employs more than 57,000 people worldwide and has over 200 brands in
its portfolio, with its cigarettes chosen by one in eight of the world’s
one billion smokers. Alongside offering tobacco products,
About Imperial Tobacco:
Imperial Tobacco is part of
JTI, a member of the
PMI is the world’s leading international tobacco company, with six of the world's top 15 international brands and products sold in more than 180 markets. In addition to the manufacture and sale of cigarettes, including Marlboro, the number one global cigarette brand, and other tobacco products, PMI is engaged in the development and commercialization of Reduced-Risk Products (“RRPs”). RRPs is the term PMI uses to refer to products with the potential to reduce individual risk and population harm in comparison to smoking cigarettes. Through multidisciplinary capabilities in product development, state-of-the-art facilities, and industry-leading scientific substantiation, PMI aims to provide an RRP portfolio that meets a broad spectrum of adult smoker preferences and rigorous regulatory requirements. For more information, see www.pmi.com and www.pmiscience.com.
1 Legal domestic sales volume in
2 ‘Illicit Whites’ - Cigarettes that are usually manufactured legally in one country/market but which the evidence suggests have been smuggled across borders during their transit to the destination market under review where they have limited or no legal distribution and are sold without payment of tax.
KPMG (for enquiries on the research and methodology)
Tel: +44 (0) 20 7311 3245
Will Hill / Anna Vickerstaff
+44 (0) 20 7845 2888 (24 hours)
T: +44 117 933 7481
T: +41 22 703 0291
T: +41 58 242 4500