Fewer illicit cigarettes were sold in Europe last year as incomes rose and unemployment fell, according to the latest Project Sun report by KPMG that estimates an 8.8 per cent drop to 48.3 billion sticks.

KPMG noted counterfeit and contraband cigarettes still account for 9 per cent of total consumption in 2016, representing EUR 10.2 billion (USD billion) in lost tax revenue in the 30 European countries targeted by the annual study. Factors other than stronger economies that contributed to the fall-off in illicit cigarettes included an 8 per cent drop in cross-border trips within the European Union and stable prices and sales for legal cigarettes. Increased efforts by law enforcement agencies and increased border security also reduced illicit supply.
Measured in total volume, France led the list of countries with nearly 9 billion illicit sticks, followed by Poland at 6.2 billion and the UK at 5.6 billion. Coupled with Germany and Italy, the top five illicit volume countries accounted for almost 62 per cent of contraband and counterfeit cigarettes within the EU. In a departure from previous reports commissioned by four international tobacco companies, the latest Project Sun was commissioned by the Royal United Services Institute, which also contributed analysis to the report. The full study is available at: https://goo.gl/FtEhoy