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Illicit market continues to grow in EU

23 Jun 2022. A new study by KPMG has shown that, in 2021, the consumption of illicit cigarettes went up by around 3.9 per cent, according to a Philip Morris International (PMI) press release.

The annual study that is commissioned by PMI, focuses on the consumption and flow of illicit cigarettes in the 27 EU member states as well as the UK, Norway, and Switzerland. The report estimates that 1.3 billion more illicit cigarettes were consumed in the European Union, reaching 8.1 per cent of total consumption in the region in 2021. At the same time, the study shows that the overall EU cigarette consumption actually declined over the same period.

The report, shows that the increase in illicit consumption was largely driven by a 33 per cent increase in counterfeit consumption in France which grew to 8 billion cigarettes last year, states the PMI press release. France is the largest market for illicit cigarettes within the EU with 15.1 billion illicit cigarettes consumed in 2021, which makes up 29 per cent of country’s total cigarette consumption and a significant growth from the 13 per cent it made up in 2017.

“The findings of the KPMG Report should be a real wake-up call. It’s alarming that in countries that maintain high excise taxes on cigarettes, such as France, instead of driving a decrease in smoking prevalence, we see a rise in counterfeit cigarette consumption. In fact, in France in the past five years, while the average price of a pack of legitimate cigarettes has increased by more than half, the number of adult smokers has only marginally decreased,” said Gregoire Verdeaux, Senior Vice President, External Affairs, PMI.

However, the KPMG report also shows positive signs from countries such as Poland where one of the largest declines of 3.7 per cent in illicit consumption was recorded.

“The decreasing consumption of illicit cigarettes in countries like Poland is remarkable and reassuring. It showcases the impact of effective law enforcement against criminals profiting from illicit trade in a market where better alternatives to smoking are available and more affordable to adult smokers. These are outcomes other countries should aspire to emulate,” said Alvise Giustiniani, Vice President, Illicit Trade Prevention.