The illicit cigarette market grows by 0.4% in Spain in 2022 with a tax loss of 286 million

MADRID, 28 Jun.

The illicit cigarette market grows by 0.4% in Spain in 2022 with a tax loss of 286 million


The illicit cigarette market in Spain rose by 0.4% in 2022, up to 3.7% of the total number of cigarettes consumed, which meant a tax loss of 286 million euros, according to a new KPMG study carried out in collaboration with Philip Morris International (PMI).

Specifically, the report highlights that in 2022, 440 million counterfeit cigarettes were consumed, which represents 50% more than in 2021, while the level of seizures of illegal factories has quadrupled in 2022, with 13 factories seized compared to those three from the previous year.

In this way, in 2022 the illicit market in the European Union has maintained its upward trend, with an estimated increase of 0.7%, up to 35,800 million illicit cigarettes, which meant for governments the loss of some 11,300 million. euros in tax revenue, 8.5% more, driven mainly by increases in countries such as France and Belgium.

"The report clearly shows how the growth of the illicit cigarette market represents an existential threat to the sustainability and transformation of the industry in Europe. We can see how the problem of illicit cigarettes in the EU has been concentrated in a few countries where governments have not adopted innovative strategies to effectively discourage millions of people from smoking," said Philip Morris International Senior Vice President, External Affairs Gregoire Verdeaux.

The PMI manager has warned that "traditional tobacco control policies are simply not enough." "Aggressive tax policies, prohibitionist approaches and a lack of deterrence in countries like France and Belgium only benefit criminals and push adult smokers into the black market," he noted.

Despite the global increase in illicit consumption, the study notes that most EU members, specifically 21 out of 27 countries, experienced a stable or declining share of illicit cigarette consumption in 2022.

Excluding France, overall illicit consumption in the other markets in the study decreased by 7.5%, largely due to declines in Greece, the Netherlands, Portugal and Romania.

The report notes, following interviews with law enforcement, that the production and distribution of counterfeit cigarettes within EU borders is increasing, and criminal organizations target their activities in EU Member States with taxes and prices higher, which brings them greater benefits.

Thus, countries such as Belgium, Denmark, France and Germany are seeing an increase in cigarette seizures and raids on clandestine manufacturing operations.

The 2022 results place Ukraine, which is included for the first time in this report, as the second largest European market for illicit cigarette consumption, with 7.4 billion cigarettes, behind France's 16.9 billion, while the third largest Europe's black market is the United Kingdom, with 5.9 billion illicit cigarettes, which has been on an upward trend since 2020.