LAUSANNE, Switzerland - Wednesday,
April 17th 2013 [ME NewsWire]
(BUSINESS WIRE/ME
NewsWire)-- For the sixth year in a row, the illegal trade of cigarettes in the
European Union reached a new record high, a KPMG study revealed today. In 2012
the levels rose to 11.1%, compared to 10.4% in 2011, resulting in an estimated
€12.5 billion in lost tax revenues to Member States.
“In the midst of the economic crisis
and budget deficits, illegal cigarettes continue to plague Europe, costing
Member States billions in lost taxes and destroying communities,” said Artyom Chernis, Philip Morris International's (PMI)
Vice President, Illicit Trade Strategies and Prevention. “This problem cannot
be ignored by decision makers. Action is needed, and needed now to curb this
activity and to find and prosecute the criminals and the networks that promote
it. In addition, a comprehensive and thoughtful approach to policies at the EU
and Member State level to both combat this problem and ensure it is not made
worse in the years to come is essential.”
The study, which is conducted
annually by KPMG for Philip Morris International Inc. (PMI) (NYSE/Euronext
Paris: PM), the European Commission and all 27 EU Member States also found
that:
- Twelve countries’ consumption of illegal cigarettes
exceeded the EU average (of total cigarette consumption), including:
Lithuania: 27.5%; Ireland: 19.1%; Finland: 16.9%; UK: 16.4%; France:
15.7%; Greece 13.4%; Poland: 13%; and Germany: 11.1%.
- The UK, Greece, Italy, and Estonia are home to the
sharpest increases in illegal cigarette consumption since 2011.
- Consumption of illicit cigarettes increased to 65.5
billion cigarettes – an amount equivalent to the entire legal markets of
France and Portugal combined.
- It is estimated that had the cigarettes sold on the
black market been sold in the legal market, Member State governments would
have gained an additional €34.3 billion in tax revenue since the beginning
of 2010.
- Southern European countries continued to increase their
share of the illegal cigarette market, a trend that began in 2009. This is
primarily a result of a 50% increase in Italy between 2011 and 2012.
- “Illicit white” cigarettes – cigarettes that are
manufactured solely for the purpose of being smuggled – now constitute
one-quarter (24.3%) of the illegal cigarettes smoked in Europe, compared
to just 2.4% in 2006.
The illicit trade in tobacco
products fuels organized crime and damages economies and societies in the EU
and around the world. The primary drivers of this activity are: high
profitability compared to low risk of penalties for criminals; insufficient
financial and human resources and lack of cross-border cooperation to combat the
problem; extreme tax and regulatory schemes that shift consumption from the
legal to the illegal tobacco market; the current economic downturn; and low
public awareness about the penalties and consequences of the illegal tobacco
trade.
PMI has a dedicated team which works
closely with governments and enforcement groups around the world to address
this issue. Tackling the problem requires both the private and public sectors
to address the supply and demand of illegal tobacco products, in addition to
ensuring that the regulatory and fiscal environment does not further drive its
growth.
To read KPMG’s report, understand
more about the black market for tobacco and to learn what PMI is doing to meet
this challenge, visit www.pmi.com.
About Philip Morris International
Inc.
Philip Morris International Inc.
(PMI) is the leading international tobacco company, with seven of the world’s
top 15 international brands, including Marlboro, the number one cigarette brand
worldwide. PMI’s products are sold in more than 180 markets. In 2012, the
company held an estimated 16.3% share of the total international cigarette
market outside of the U.S., or 28.8% excluding the People’s Republic of China
and the U.S. For more information, see www.pmi.com.
KPMG Study on the illicit cigarette
consumption in the EU
KPMG has conducted this study every
year since 2006, as part of the cooperation agreement between PMI, the European
Commission and the EU member states. The results of these studies have been
shared with the European Anti-Fraud Office (OLAF).
Contacts
Philip Morris International
PMI Press Office
Phone: +41 (0) 58 242 4500
E-mail: media@pmi.com
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