One in 10 cigarettes that smokers light up in Europe is counterfeit or contraband, according to a new report. That’s more than 56 billion dodgy cigs in total, says KPMG, which produced the research on behalf of four big tobacco companies.
Although illicit tobacco consumption fell by 3.3% last year, the black market for cigarettes still represents billions of euros in forgone tax revenues. Taxes often account for some 80% of the retail price of a pack of cigarettes in the EU—a powerful incentive for smugglers to skirt the rules.
The prevalence of illicit tobacco varies widely across the continent, from nearly 30% of total consumption in Latvia and Lithuania to only around 1% in Portugal and Slovakia.
There are some noticeable patterns to the illegal tobacco trade. Along the EU’s eastern edge, cheap cigarettes from Belarus and Russia are squirrelled across the border without paying the proper taxes and duties. Further west, Marlboro cigarettes from Poland are a popular choice for smugglers in places like Ireland and Norway.
In the UK, KPMG estimates that nearly 1.2 billion cigarettes from Pakistan—predominantly the John Player Gold Leaf brand—were illegally imported and sold to smokers last year. These and other “illicit white” brands like Fest, American Legend, and Jin Ling are produced legally in places like Pakistan, Belarus, and Russia, but appear almost exclusively in higher-cost countries for sale at suspiciously low prices. Similar brands with no discernible country of origin—often stamped with bogus duty-free stickers—are the most popular illicit purchases in countries like Greece and Italy.
