- \n
- Smokers in the European Union (EU) consumed 38.9 billion illicit cigarettes in 2024, a 10.8% increase versus 2023, with serious repercussions for tax revenues, crime rates, and public health.<\/i><\/li>\n
- France, the largest illicit market in Europe, reached 18.7 billion illicit cigarettes consumed last year, 37.6% of total consumption. Adding 10.2 ppt year-on-year, the Netherlands saw the largest increase in illicit cigarettes share, which doubled to 17.9% of total consumption.<\/i><\/li>\n
- Countries such as Bulgaria, Greece, Italy and Portugal\u2014and<\/i>Ukraine, outside the EU\u2014have shown sizeable decreases in illicit consumption in 2024. Greece and Ukraine, in particular, saw as much as 30% declines vs. 2023.<\/i><\/li>\n
- PMI calls for<\/i>evidence-based regulation, predictable fiscal regimes, and strict law enforcement to address the roots of illicit trade while promoting economic stability and public health. Evidence shows that excessive tobacco control policies may be driving smokers to the black market.<\/i><\/li>\n<\/ul>\n
STAMFORD, Conn.–(BUSINESS WIRE<\/a>)–
\nPhilip Morris International Inc. (NYSE: PM) today issues an urgent call for effective policymaking to counter the growing threat of illicit trade in the EU. In 2024, 38.9 billion illicit cigarettes were consumed in the region\u2014the highest level since 2015\u2014accounting for 9.2% of total cigarette consumption, with governments losing as much as \u20ac14.9 billion in tax revenues at a time when many countries face intense economic pressures.<\/p>\n\nPMI believes that exacerbating the issue are steep and abrupt tax increases, benefitting criminals who supply unregulated, untaxed and inferior products, including counterfeits, at a lower price. To combat this growing threat, PMI urges the adoption of evidence-based regulation with balanced and predictable taxation through tax calendars, continued public-private collaboration and enhanced support of regional and national law enforcement agencies, as criminal organizations dealing in illicit cigarettes have cemented their presence in higher-priced Western European countries.<\/p>\n
\nAccording to the 2024 KPMG study<\/a>, commissioned by Philip Morris Products SA, a large number of counterfeit cigarettes were consumed in the EU in 2024: 15.3 billion, a 20.2% increase vs. 2023. Additionally, so-called \u201cillicit whites\u201d\u2014legally manufactured cigarettes smuggled across borders to countries where they have limited or no distribution\u2014reached 8.2 billion.<\/p>\n
\n\u201cThe illicit tobacco trade threatens the European economy, public health, security and social stability; today, higher-taxed and higher-priced markets such as France and the Netherlands are especially impacted by illegally imported and counterfeit goods,\u201d said Christos Harpantidis, PMI\u2019s Senior Vice President, External Affairs. \u201cIts massive socioeconomic impact negatively affects tax collection, job creation, and legitimate businesses, the engine of our European economies. The availability of cheap, unregulated cigarettes in the underground economy also impairs efforts to reduce smoking rates and achieve a smoke-free future.\u201d<\/p>\n
\nThe 2024 KPMG report indicates the increase in illicit cigarette consumption was primarily driven by France and the Netherlands. The study points to an especially alarming situation in France, where 18.7 billion illicit cigarettes were consumed in 2024, almost 7.8 billion of which were counterfeits. In the Netherlands, illicit cigarette volumes increased drastically, by 1.1 billion\u2014more than doubled in a year\u2014reaching 17.9% of total consumption. Had these cigarettes been legally purchased, an additional \u20ac9.4 billion would have been raised in taxes in France and almost \u20ac900 million in the Netherlands.<\/p>\n
\nIn contrast, countries such as Bulgaria, Greece, Italy and Portugal\u2014and Ukraine, outside the EU\u2014have made significant progress in curbing the illicit tobacco market. Greece, for instance, had a 6.2 ppt drop in illicit cigarette consumption in 2024, to 17.5%\u2014the largest decrease the country has seen in a decade.<\/p>\n
\n\u201cPredictable tax regimes and robust support for local law enforcement actions have proven an effective policy recipe: We now know how to effectively counter the criminal entities that engage in the illicit manufacturing, distribution, and sale of consumer products. Other countries in the region should emulate that approach to get control over this dangerous trend,\u201d said Massimo Andolina, PMI\u2019s President, Europe Region. \u201cThis is the way forward if we are serious about defeating the illicit tobacco trade in our continent, which harms Europe\u2019s economies, undermines European competitiveness and growth, and opens the door to other criminal activities. Citizens cannot afford to be deprived of much-needed state revenues in this critical moment for Europe, which are being lost rather than applied to key issues such as defense, internal security, and social programs.\u201d<\/p>\n
Illicit trade affects the whole of Europe<\/b><\/p>\n
\nAcross the 38 European countries included in KPMG\u2019s study (the 27 EU member states, as well as Albania, Bosnia and Herzegovina, Kosovo, Moldova, Montenegro, North Macedonia, Norway, Serbia, Switzerland, Ukraine, and the United Kingdom), 52.2 billion illicit cigarettes were consumed in 2024, accounting for 10.0% of total consumption. Tax revenue losses amounted to an estimated \u20ac19.4 billion.<\/p>\n
\nIllicit cigarette volumes in the U.K. decreased by almost 0.8 billion in 2024, though illicit cigarettes as a share of total consumption remained stable. The U.K. is still the third-largest illicit market in Europe, with 5.9 billion illicit cigarettes consumed last year. Ukraine, in contrast,saw the largest decline in illicit consumption, with contraband and counterfeit volumes decreasing by 2.4 billion or 29% (vs. a 1.1 billion or 14% increase in 2023).<\/p>\n
\nThis is the 19th consecutive year that KPMG has measured and reported on illicit cigarette consumption across Europe.<\/p>\n
Heated tobacco products<\/b><\/p>\n
\nFor the first time, the KPMG study included in its scope the illicit consumption of heated tobacco products in selected European countries: the Czech Republic, Germany, Greece, Hungary, Italy, Lithuania, Poland, Romania, Spain, and the United Kingdom.<\/p>\n
\nThe study reveals that contraband consumption stood at 0.4 billion sticks (the consumables used in heated tobacco devices) in 2024, representing 0.9% of total consumption. The highest contraband volumes were found in Germany (0.15 billion sticks) and Poland (0.08 billion), with the U.K. having the highest share (7.8%). To date, no counterfeit flows have been identified.<\/p>\n
\n\u201cPolicymakers must recognize that repeating the policy mistakes that drive the illicit cigarette market when regulating smoke-free products\u2014excessive and market-distorting taxation, extreme control measures such as bans, and inadequate law enforcement against illicit activities across the value chain\u2014may and will lead to the same disaster we see today in the cigarette sector in countries adopting such policies, and that we are starting to see in countries banning the legal sale of smoke-free products,\u201d said Andolina.<\/p>\n
\n—<\/p>\n
\nIllicit trade does not just affect the people who consume these products. It fuels ruthless criminal gangs, typically impacting the most vulnerable communities and populations. It deprives governments of critical revenues needed to fund public services, including security, defense and social services. And its proceeds facilitate other serious crimes such as human trafficking, corruption, and money laundering.<\/p>\n
\nFor PMI, eliminating the illicit tobacco and nicotine trade has been a long-standing priority. The company implements preventive and protective measures and works with the public and private sectors to advance efforts to address this global issue.<\/p>\n
\nAs PMI progresses on its commitment to deliver a smoke-free future\u2014a future without cigarettes, by far the most harmful way to consume nicotine\u2014it is increasing efforts to secure its supply chain and the products it sells and to protect consumers and its brands from smugglers and counterfeiters. PMI works closely with law enforcement agencies and other organizations worldwide to root out and shut down illegal activities, including counterfeiting and smuggling.<\/p>\n
\nA detailed overview of the results, country profiles and methodology of the KPMG study is available here<\/a>.<\/p>\n
\nFor more information about PMI\u2019s illicit trade prevention efforts, visit PMI.com<\/a>.<\/p>\n
Note to editors<\/b><\/p>\n
\nDefinitions of illicit cigarette categories, as detailed in the KPMG report:<\/p>\n
- \n
- \nCounterfeit: \u201cCigarettes that are illegally manufactured and sold by a party other than the original trademark owner.\u201d<\/p>\n<\/li>\n
- \nIllicit whites: \u201cCigarettes that are usually manufactured legally in one country\/market but which the evidence suggests have been smuggled across-borders during their transit to the destination market under review where they have limited or no legal distribution and are sold without payment of tax.\u201d<\/p>\n<\/li>\n
- \nC&C: \u201cCounterfeit and contraband, including illicit whites. Contraband refers to genuine products that have been either bought in a lower-tax country and which exceed legal border limits or acquired without taxes for export purposes to be illegally re-sold (for financial profit) in a higher priced market.\u201d<\/p>\n<\/li>\n
- \nOther C&C: \u201cOther C&C comprises contraband which does not fall within the Illicit Whites definition. It is often Duty Paid product from both EU27 and non-EU27 countries. There may also be counterfeit of brands that are not trademark-owned by participant manufacturers.\u201d<\/p>\n<\/li>\n<\/ul>\n
Philip Morris International: A Global Smoke-Free Champion<\/b><\/p>\n
\nPhilip Morris International is a leading international consumer goods company, actively delivering a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company\u2019s current product portfolio primarily consists of cigarettes and smoke-free products, including heat-not-burn, nicotine pouch, and e-vapor products. As of December 31, 2024, PMI’s smoke-free products were available for sale in 95 markets, and PMI estimates they were used by 38.6 million adults around the world. The smoke-free business accounted for 42% of PMI\u2019s first-quarter 2025 total net revenues. Since 2008, PMI has invested over $14 billion to develop, scientifically substantiate, and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. Following a robust science-based review, the U.S. Food and Drug Administration has authorized the marketing of Swedish Match\u2019s General <\/i>snus and ZYN <\/i>nicotine pouches and versions of PMI\u2019s IQOS <\/i>devices and consumables – the first-ever such authorizations in their respective categories. Versions of IQOS <\/i>devices and consumablesand General<\/i> snus also obtained the first-ever Modified Risk Tobacco Product authorizations from the FDA. With a strong foundation and significant expertise in life sciences, PMI has a long-term ambition to expand into wellness and healthcare areas and aims to enhance life through the delivery of seamless health experiences. References to \u201cPMI\u201d, \u201cwe\u201d, \u201cour\u201d, and \u201cus\u201d mean Philip Morris International Inc., and its subsidiaries. For more information, please visit www.pmi.com<\/b><\/a> and www.pmiscience.com<\/b><\/a>.<\/p>\n
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View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20250611507314\/en\/<\/a><\/span><\/p>\n
- France, the largest illicit market in Europe, reached 18.7 billion illicit cigarettes consumed last year, 37.6% of total consumption. Adding 10.2 ppt year-on-year, the Netherlands saw the largest increase in illicit cigarettes share, which doubled to 17.9% of total consumption.<\/i><\/li>\n