Fewer and fewer people smoke in Europe, but the illicit cigarette market is growing, according to a new study by KPMG. More than eight percent of cigarette smoke in Europe is illegally imported or counterfeited. France in particular stands out, where even every third cigarette is counterfeit.
Austrians smoked about 600 million illegal cigarettes in 2022. Although they consumed a total of 12.7 billion fewer cigarettes, the share of goods on the black market is increasing. This includes counterfeit, as well as legally manufactured tobacco smuggled from abroad (including “suitcase imports”). “The damage to the state in 2022 amounted to 123 million euros, 22 million euros more than the previous year,” explains Alexander Schönegger, head of Philip Morris in Austria.
Taxes amounting to EUR 11 billion are lost across Europe, about five times the total tobacco tax revenue in Austria. The proportion of counterfeit cigarettes is increasing among illegal cigarettes.
“About a third of illegal cigarettes are already counterfeit,” said Tamas Sipos, Philip Morris anti-smuggling expert. The rest are goods smuggled from abroad, albeit in excess of the 800 allowed within the EU, or stolen tobacco. The huge increase in illegal cigarette factories also worries the industry. With the borders closed, criminals began to produce their counterfeits “closer to the market.”
The authorities found 134 illegal factories in one year
Last year, authorities found 134 illegal factories. While they used to be common in Eastern Europe, there are now quite a few in Western countries as well. Most are old factory sites, backyards or empty warehouses. The appalling conditions there affect the quality of the goods: rat droppings, dirt or plastic parts have been found in illegal tobacco.
“The working conditions are also bad. The workers there are held as if they were enslaved,” says Sipos. In July, an illegal factory was discovered in Belgium, near Antwerp. 25 trucks were deployed to remove the illegal cigarettes.
“What is also striking is that more and more premium brands are being counterfeited,” says Sipos. In the past, they were mainly cheap brands, but today criminals are increasingly producing counterfeit products from Marlboro and Co., which have nothing to do with the original.
Consumers can be sure by looking for the production number printed on the bottom of the cigarette pack. However, there is no one hundred percent certainty, because fraudsters are already printing figures. But if, for example, all the packs of a stick have exactly the same number, something is definitely wrong.
“It is best to buy cigarettes only in tobacconists and tobacconists. There is also a monopoly in many holiday countries,” says Schönegger. He would like to see the authorities take even harder action against the criminals. “Some fines are too low. Especially when it comes to the profit that scammers make from illegal cigarettes.”
Counterfeit cigarettes are especially widespread in France
In addition, the state must be careful not to encourage illegal trade through its tax policies. In France, every third cigarette is counterfeit. The state suddenly made cigarettes significantly more expensive there.
A package there costs more than ten euros, and many then switch to the black market. “An extremely high tax increase can even backfire if the higher rate means that some tax revenue is again lost to the black market on the other side,” warns Schönegger.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
