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June 6, 2019
Philip Morris International: New Report Exposes Continued Impact of Illicit Tobacco Trade in the European Union
To achieve a world without cigarettes, PMI supports ongoing efforts to secure a world without illicit trade
The independent KPMG “Stella
Report,” commissioned by PMI, reveals that in 2018 the black market
for cigarettes in the
“Beyond damaging government revenues, harming legitimate
businesses—including our own—and fueling crime in local communities, the
availability of cheap, unregulated cigarettes on the black market
undermines efforts to reduce smoking prevalence and prevent youth from
According to the report, in 2018, illicit cigarette consumption—i.e., the consumption of counterfeit and contraband cigarettes—in the E.U. was estimated at 8.6 percent of total consumption, representing 43.6 billion cigarettes.
Other findings include:
- Counterfeit was the only category to show year-on-year volume growth in 2018, while contraband, illicit whites and other illicit product volumes declined.
Half of the countries included in the report saw an increase in
counterfeit consumption. The largest counterfeit cigarette volumes
were reported in
Greece(1.5 billion cigarettes) and the U.K.(0.9 billion cigarettes).
Non-E.U. countries remain the largest source of illicit cigarettes
consumed in the E.U.; however, the report found a reduced incidence of
illicit cigarette consumption in
E.U. Easternborder countries, suggesting that law enforcement activities in those areas are bearing fruit.
- Consumption of legal non-domestic cigarettes grew by 10 percent in 2018, indicating that consumers purchased lower-priced products when traveling, rather than using the illicit market.
Illicit trade is a complex issue, damages many sectors, negatively impacts societies and respects neither borders nor laws. No one government or single industry can address this problem on its own; everyone has a role to play. To combat the flow of illicit goods, PMI invests in strict controls for its supply chain and supports regulations such as the FCTC Protocol to Eliminate Illicit Trade in Tobacco and the recently enacted tracking and tracing provisions under the EU Tobacco Products Directive. Furthermore, PMI continues to work with private and public actors alike to help advance the global anti-illicit trade efforts, including through PMI IMPACT, a global initiative supporting third-party projects against illegal trade and related crimes.
For more information about PMI’s illicit trade prevention efforts, visit StopIllegal.com.
About KPMG’s Stella Report:
A detailed overview of results and methodology is available here:
KPMG has developed and refined its methodology for quantifying counterfeit and contraband cigarette incidence across the E.U. since 2006. Furthermore, the report’s 2018 results have been reviewed by an independent expert panel of distinguished professionals in law enforcement, security, brand protection and tobacco control.
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