Latvia lost an estimated €67 million to the illicit cigarette trade in 2024, a 31% increase over the previous year, as reported by KPMG at the National Forum on Smuggling. The study showed that contraband now accounts for 18% of total cigarette consumption in the country, with 340 million units consumed. Belarus remains the main source of smuggled cigarettes according to the report, supplying half of the illicit market, while counterfeit products surged 40% to 140 million units.
Philip Morris Latvia public affairs head Guntars Grīnvalds warned that simplistic excise tax hikes can exacerbate smuggling rather than increase revenue. He advocated for a differentiated taxation approach: higher duties on traditional cigarettes, but lower rates for less harmful alternatives to encourage switching among adult smokers. The findings underscore the need for balanced excise and regulatory policies, as well as stronger measures against counterfeiting and illegal production, to effectively combat the growing illicit market.
