Illicit cigarettes increasing share of Greece’s market

Greece could ‘lose’ more than €1 billion a year in tax revenue to the sale of illicit cigarettes by 2019, according to a story in the International Business Times citing Euromonitor figures.

Illicit cigarettes were said to have accounted for 21 percent of the cigarettes consumed in the country last year, up from 18 percent in 2013.

And it was suggested that illicit cigarettes’ share of the market could exceed 25 percent by 2019, given further tax hikes and the continuing use of Greece as a transit hub.

The figures are based on an average cigarette price of €3.80 per pack as of 2014 and an average tax burden of 85 percent of the retail sales price.

Greece was said to have ‘lost’ about €740 million in 2014 and €565 million in 2013 to the illegal cigarette trade.

Euromonitor’s tobacco analyst Shane MacGuill was quoted as saying that the growth in the illegal trade was fueled by tax and price increases, along with the expanding availability of illicit white cigarettes from the United Arab Emirates and Eastern Europe.

The government and industry needed to curb demand for illicit products by moderating tax hikes and informing consumers about the nature of the illegal trade, MacGuill said.

The industry launched in 2014 a campaign against illegal trade called ‘Say No to Illicit Tobacco Products’, and Finance Minister Yanis Varoufakis included combating cigarette smuggling in a list of reforms submitted to eurozone officials in February as part of a deal to secure an extension on the country’s economic rescue deal.

However, some people are of the opinion that the rescue deal, and particularly the associated austerity package, is further impoverishing the people of Greece and therefore making it more, not less, likely that some will be forced into the arms of the illegal trade.