To achieve a world without cigarettes, PMI supports ongoing efforts
to secure a world without illicit trade
LAUSANNE, Switzerland--(BUSINESS WIRE)--Jun. 6, 2019--
Philip Morris International Inc. (PMI) (NYSE: PM) today renewed its call
for continued action against illicit tobacco trade following the release
of a new report produced by KPMG, which provides a stark reminder of the
negative challenges and financial costs associated with illicit trade.
The independent KPMG “Stella
Report,” commissioned by PMI, reveals that in 2018 the black market
for cigarettes in the European Union (EU) cost governments a total of 10
billion euros in lost tax revenues and was equivalent in size to the
total legal cigarette sales in the U.K., Austria and Denmark combined.
Overall illicit cigarette consumption levels remained stable compared to
last year; however, the report found a more than 30 percent increase in
counterfeit consumption—the largest amount recorded to date.
“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
smoking,” said Alvise Giustiniani, PMI’s vice president illicit trade
prevention. “For PMI to have impact in our drive to unsmoke the world,
we must sustain our combined efforts to eliminate illicit cigarette
trade, while ensuring responsible access to better alternatives for the
men and women who would otherwise continue to smoke.”
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.
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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).
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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. Eastern border countries,
suggesting that law enforcement activities in those areas are bearing
fruit.
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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:
https://public.tableau.com/views/ExecutiveSummary-TOUPLOAD/ProjectStella-ExecutiveSummary?:embed=y&:showVizHome=no&:display_count=yes&:toolbar=no#3
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.
About Philip Morris International: Delivering a Smoke-Free Future
Philip Morris International (PMI) is leading a transformation in the
tobacco industry to create a smoke-free future and ultimately replace
cigarettes with smoke-free products to the benefit of adults who would
otherwise continue to smoke, society, the company and its shareholders.
PMI is a leading international tobacco company engaged in the
manufacture and sale of cigarettes, smoke-free products and associated
electronic devices and accessories, and other nicotine-containing
products in markets outside the U.S. PMI is building a future on a new
category of smoke-free products that, while not risk-free, are a much
better choice than continuing to smoke. Through multidisciplinary
capabilities in product development, state-of-the-art facilities and
scientific substantiation, PMI aims to ensure that its smoke-free
products meet adult consumer preferences and rigorous regulatory
requirements. PMI’s smoke-free IQOS product portfolio includes
heat-not-burn and nicotine-containing vapor products. As of March 31,
2019, PMI estimates that approximately 7.3 million adult smokers around
the world have already stopped smoking and switched to PMI’s
heat-not-burn product, which is currently available for sale in 47
markets in key cities or nationwide under the IQOS brand. For
more information, please visit www.pmi.com
and www.pmiscience.com.
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Source: Philip Morris International
Martin Schatzky
Philip Morris International Media Office
T.
+41 79 479 7868
E. martin.schatzky@pmi.com