The EU black-market cigarette trade has climbed to an all-time high of 11.1%, a new report by KPMG has revealed.
It is the sixth year in a row that the illegal trade of cigarettes in the EU has grown, resulting in an estimated €12.5bn in lost tax revenues to Member States.
The annual study also found that consumption of illegal cigarettes exceeded the EU average in Ireland (19.1%), the UK (16.4%) and France (15.7%).
The UK, Greece, Italy, and Estonia are also home to the sharpest increases in illegal cigarette consumption since 2011.
EU-wide the consumption of illicit cigarettes increased to 65.5 billion cigarettes – equivalent to the entire legal markets of France and Portugal combined.
Illicit white cigarettes – cigarettes that are legally manufactured abroad and illegally smuggled into other countries - now constitute 24.3% of the illegal cigarettes smoked in Europe, compared to just 2.4% in 2006.
“In the midst of the economic crisis and budget deficits, illegal cigarettes continue to plague Europe, costing Member States billions in lost taxes and destroying communities,” Artyom Chernis, Philip Morris International’s (PMI) vice president for illicit trade strategies and prevention said.
“This problem cannot be ignored by decision makers. Action is needed, and needed now to curb this activity and to find and prosecute the criminals and the networks that promote it.”