Illicit trade down

The illicit cigarette trade has declined in the EU, Norway and Switzerland, according to a KPMG study commissioned by the Royal United Services Institute for Defense and Security Services.

The proportion of counterfeit and contraband cigarettes in the researched markets declined 8.8 percent year-year to 48.3 billion pieces in 2016.

The illicit cigarette trade still accounts for more than 9 percent of overall consumption in the researched markets, representing a tax loss of up to €10.2 billion ($11.6 billion).

According to the report, in many cases, illicit trade hotspots remained while the brands and countries of origin changed, indicating how local demand for illicit cigarettes continued despite the changing routes and sources used by cigarette smugglers.

The report noted that criminal gangs engaged in the illicit cigarette trade are increasingly diverse in the routes and methods they employ and in the products they manufacture, transport and sell.