Cigarette smuggling is increasing throughout Europe, and more and more fakes are also in circulation. This trend is mainly powered by France, where fakes spread due to high prices. The smuggling market is stable in Austria, with about half a billion cigarettes a year. The tax increases could recently also feed the black market in this country.
Illegal cigarettes are at the top in Europe: smokers in Europe consumed 2.61 billion packs in Europe in 2024, which is ten percent of the total market, shows a new study by the KPMG consultancy. As a result, almost 20 billion euros in tax revenues are avoided in Europe.
A lot of smuggling in the high tax country France
The most smuggling is available in France, where 38 percent of the cigarettes are now illegal, which is 18 billion pieces, so the black market in France is 50 percent larger than the entire Austrian market with 12 billion smoked cigarettes.
This is followed by Ireland and Groot -Britain in the share of smuggling goods. There was a large increase in the Netherlands, where the share doubled to 18 percent in a year. The countries have in common that cigarettes are very expensive due to high taxes that have fueled illegal trade. “The figures prove: a rigorosis tax regime creates an unbridled black market,” says Tamas Sipos of the Philip Morris tobacco group, who ordered the study.
Fake and illegal export
The illegal cigarette market is divided into different categories, has SIPOs: on the one hand there would be a taxed cigarettes in the country of origin, but sometimes smuggled in another country, but sometimes in considerable quantities. Secondly, there are many fake cigarettes that are made in illegal factories. Stolen goods are also in circulation.
“The illegal cigarette factories are becoming more,” said Sipos. For example, there were raids in Belgium, the Netherlands or in France. Some of them are also stolen goods that are real, but still illegal. Incidentally, most counterfeits still come from non-EU countries such as Belarus, Albania, North Macedonia or Turkey, the report shows.
Smuggling can also increase in Austria
The problem could worsen if the EU enforces higher tobacco taxes, and a revision of the Tobacco Tax Directive will be coming soon. The EU parliament member Roman Haider told the “krone” that he is for “more national tax policy instead of patronizing”. The price differences for countries such as Serbia would increase even more, which would dismiss the smuggling from third countries. Philip Morris Boss Özlem Dikmen also fears the effects in Austria because of the increases has decided: “Anyone who thinks they can control the use of tobacco with increasingly higher taxes opens the door for organized crime.”
The Marlboro brand is the most smuggling, which is also the most sold cigarette brand worldwide. Chesterfield and Winston are also often fake in this country (see graphic). Similarly, around 60 million fake brands were in circulation in 2024.
There are fewer counterfeits with alternative products. With pouches (nicotine bags) this always occurs, the problem does not exist for tobacco heaters. Philip Morris leader Özlem Dikmen sees another problem there. Because, for example, the delicate brand has not been approved in Austria, soft consumers. “So there is bought abroad and we avoid tax revenues.”
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.
