EUROPEAN UNION
Illicit cigarette trade at record levels

A KMPG study shows that the illicit trade in contraband and counterfeit cigarettes in the European Union (EU) in 2010 reached its highest level since studies began in 2006.

Philip Morris International (PMI) today announced results of a recent study, which KPMG conducts every year as part of the landmark cooperation agreement between PMI, the European Commission and the EU member states.
The study estimates that annual consumption of illicit cigarettes increased by 3.1 billion units in 2010 versus 2009 to an annualised total of 64.2 billion units. This equates to approximately 10 per cent of total cigarette consumption in the EU.
The loss to national and EU revenues due to cigarette smuggling is estimated by the European Anti-Fraud Office (OLAF) to be approximately EUR 10 billion per year.
Commenting on today's announcement, Timothy Lindon, PMI's chief compliance officer and vice president for brand integrity, said: "The illegal cigarette market in the EU is now larger than the legal cigarette markets of France, Ireland and Finland combined, and brings increased criminality to EU member states, as profits from illicit trade are often used to fund other illegal activities, including drug smuggling, human trafficking and terrorism. In many EU countries, there are now two distinct cigarette markets, one legal regulated market which is declining, and an illegal unregulated market that is growing." (pi)

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