Trade Of Contraband Cigarettes in Greece On The Rise, Says New Study

Contraband cigarettes trade in Greece has increased, according to a study conducted by KPMG in all European Union countries commissioned by British American Tobacco, Imperial Tobacco, Japan Tobacco International êáé Philip Morris International.

The main findings of study for Greece are among others:

• - Illicit trade of cigarettes was up 4.4 percentage points to 17.8 percent in 2013
• - The majority of contraband cigarettes are illicit whites (7 out of 10), which were up 63 percent in 2013 compared to 2012. According to KPMG's 2013 SUN study, illicit whites are an emerging type of illegal branded cigarettes manufactured for the sole purpose of being smuggled.
• - Lost taxes in 2013 amounted to 565 million euros.

On a European level, one out of 10 cigarettes consumed were illegal, 33 percent of which were the so-called illicit whites. Overall, 58.6 billion illegal cigarettes were consumed in the EU; this is equivalent to the total legal cigarette markets of Spain and Portugal and represents a total tax revenue loss of 10.9 billion euros.

KPMG found that while the number of illicit whites' consumed increased by 15% compared to 2012, overall, the illegal trade of cigarettes in the EU stabilized, declining slightly from a record high of 11.1% in 2012 to 10.5% in 2013. This stabilization was due to a significant decrease in contraband cigarettes, legal cigarettes typically smuggled from low tax countries to high tax countries, as industry, governments and law enforcement increased efforts to curtail this illegal activity.

Despite the overall decline in the illegal market in 2013, the EU's black market for tobacco remains a significant source of revenue loss for governments and a resilient competitor to the legitimate manufacturers and trade. This illegal activity not only comes at a financial cost, but it fosters criminality in local communities.

British American Tobacco plc (BAT), Imperial Tobacco Group plc (Imperial), Japan Tobacco International (JTI) and Philip Morris International Inc. (PMI) continue to devote significant resources to combat this problem above the requirements set out in their Cooperation Agreements with the European Commission underpinned by the conviction that effective solutions require solid cooperation between governments, law enforcement agencies, manufacturers and retailers.

The full report is available at http://www.kpmg.co.uk/email/06Jun14/OM014549A/PageTurner/index.html