A new study by KPMG, commissioned by Philip Morris, has found that consumption of contraband and counterfeit cigarettes in the EU27 grew by 0.7% last year, equating to around 300 million cigarettes.
While this is a lower rate than in previous years (in 2021, consumption rose by 3.9%, or 1.3 billion cigarettes), a number of markets continue to show high levels of consumption of illicit tobacco products.
France, for example, which saw an additional 1.8 billion contraband and counterfeit cigarettes consumed last year, accounts for almost half (47%) of EU27 illicit consumption. The majority of EU markets experienced a stable or declining consumption share of Illicit cigarettes in 2022, the study found.
According to the study, had the illicit cigarettes been legally purchased in the countries in which they were consumed, an additional €11.3 billion in taxes would have been raised in the EU27.
Let's have a look at the European (both EU and non-EU) markets in which consumption of contraband and counterfeit cigarettes is highest, ranked in percentage terms and based on 2022 data.
1. France: 32% (16.9 billion cigarettes)
France is the European country with the highest percentage of contraband and counterfeit cigarettes consumed, with close to one third (32%) of all cigarettes consumed being of illicit origin. The share of contraband and counterfeit cigarette consumption rose by 3.1 percentage points last year.
2. Ireland: 24% (0.8 billion cigarettes)
Ireland ranks second with an illicit cigarette consumption rate of 24%, or 800 million cigarettes. The share increased by 7.6 percentage points last year, according to the study.
3. United Kingdom: 21% (5.9 billion cigarettes)
The United Kingdom follows closely behind, with 21% of its total cigarette consumption comprising contraband and counterfeit products. The share increased by 3.1 percentage points last year.
4. Greece: 21% (2.9 billion cigarettes)
Sharing the same percentage as the UK, Greece reported consumption of 2.9 billion contraband and counterfeit cigarettes last year. The share decreased by 3.1 percentage points last year.
5. Ukraine: 20% (7.4 billion cigarettes)
Ukraine saw consumption of 7.4 billion illicit cigarettes in 2022, representing 20% of its total cigarette consumption. This share increased by 2.8 percentage points last year.
6. Lithuania: 19% (0.5 billion cigarettes)
Lithuania ranks sixth, with 19% of its total cigarette consumption attributed to illicit products in 2022. This was up marginally (+0.1 percentage points) on the previous year.
7. Finland: 15% (0.5 billion cigarettes)
According to the data, some 15% of Finland's total cigarette consumption comprising illicit products. The share rose by 1.1 percentage points in 2022.
8. Latvia: 15% (0.3 billion cigarettes)
Latvia shares a similar percentage to Finland, with 15% of its total cigarette consumption categorised as contraband and counterfeit. This share was down 1.0 percentage points last year.
9. Estonia: 14% (0.2 billion cigarettes)
Estonia ranks ninth with an illicit cigarette consumption rate of 14%. The share of contraband and counterfeit cigarettes rose by 3.6 percentage points last year.
10. Cyprus: 13% (0.1 billion cigarettes)
While it is one of the smaller markets involved in the study, contraband and counterfeit cigarettes are still an issue in Cyprus, accounting for 13% of total cigarette consumption. This was down 1.6 percentage points last year.
Other markets in which consumption of contraband and counterfeit cigarettes runs into double digits includes Norway –12% (0.2 billion cigarettes); Netherlands – 11% (1.2 billion cigarettes) and Belgium – 10% (0.9 billion cigarettes).
The markets in which illicit cigarette consumption is lowest include Croatia, Luxembourg, Poland, Portugal, Romania and Slovenia.
You can read the full study here.
© 2023 European Supermarket Magazine – your source for the latest A-Brands news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
