The illegal cigarette trade in the EU reached a new record high for the sixth year in a row, according to a KPMG report commissioned by Philip Morris International. The study showed the illegal cigarette trade rising to 11.1 percent in 2012 from 10.4 percent in 2011.
At 31 percent of the national tobacco market, illicit cigarettes had the highest market share in Latvia. Latvia loses an estimated LVL60 million ($111.4 million) to LVL70 million in annual tax revenue due to cigarette smuggling. KPMG Baltics representative Andris Purins said Latvia’s proximity to Belarus and Russia is exacerbating the black market problem.
Other strongly affected EU markets included Lithuania, where illicit cigarettes accounted for 27.5 percent of the market; Ireland (19.1 percent), Finland (16.9 percent), the United Kingdom (16.4 percent), France (15.7 percent), Greece (13.4 percent) and Poland (13 percent).
The U.K., Greece, Italy and Estonia recorded the steepest growth in the illegal cigarette market since 2011, according to the KMPG report.