Black market cigarette consumption in the 28 European Union countries fell by roughly 7 billion sticks in 2013 on lower volumes in the United Kingdom and Italy, according to a study by KPMG.
However consumption of illicit whites rose 2.5 billion sticks to 19.6 billion, which represents about one third of the 58.6-billion-unit black market total, states the study commissioned by the four major international tobacco companies. In percentages, overall market share of contraband and counterfeit cigarettes fell to 10.5 per cent from 11.1 per cent in 2012. Black market cigarettes cost EU countries nearly EUR 11 billion (USD 14.7 billion) in tax revenue last year, the study says.
A half-dozen cigarette manufacturers account for most of the growing trade in illicit whites. The largest single source is Belarus, where Grodno Tobacco Company is believed to be a key player, according to the KPMG study.
Europe’s legal cigarette market declined 7.5 per cent in 2013. Weak economies and high unemployment coupled with hikes in cigarette prices may have contributed to the drop, KPMG said.
About 17 per cent of all black market cigarettes are consumed in Greece, the study shows. Black market volumes declined by 3.9 billion cigarettes in the United Kingdom and 3.6 billion units in Italy, while volume in the rest of Europe was mostly static, according to the study commissioned by Philip Morris International, British American Tobacco, Japan Tobacco International and Imperial Tobacco.