France Struggles with Illicit Market

France has one of the largest illicit cigarette trade markets among European Union member states, according to Euractiv.

“The increase in EU illicit consumption was predominantly due to France (plus-1.8 billion cigarettes), which now accounts for almost half (47 percent) of EU27 illicit consumption,” according to a KPMG study funded by Philip Morris International.

In 2021, illicit trade in France was 29 percent of total consumption, and in 2022, it increased to 32 percent of total consumption.

Some attribute the large illicit market to high taxes. France’s excise tax on cigarettes is almost double that of the EU average.

Ireland, which has the highest tax rate on tobacco, currently ranks second in illicit trade in the EU, supporting this idea. However, Greece has a lower than average tax rate and was the third-worst EU country in illicit trade in 2022.

French Deputy Minister for Public Accounts Gabriel Attal said that tobacco trafficking sets new records annually. “Faced with the explosion of these trafficking activities, we cannot let France be overwhelmed by illicit tobacco,” he said. “Trafficking is not only accelerating but also undergoing profound changes.”

“One euro for a tobacco trafficker is one euro for mafia networks and criminal organizations,” Attal said. In 2021, he noted, four illicit tobacco production factories were dismantled in France.

“In response to your request, we would first like to inform you that French Customs does not comment on estimates made on behalf of the tobacco industry,” French Customs told Euractiv.

Customs said that “work will be undertaken to improve the level of understanding, analysis and estimation of the parallel market in tobacco products.”

“For the record, in 2022, the French Customs services seized nearly 650 tons of tobacco, including more than 473 tons of cigarettes, in the course of nearly 17,000 offenses. The value of goods seized on national territory, all products combined, amounted to more than €213 million ($238.24 million) for the same year,” customs said.