‘Illicit white’ trade soars as smuggling overall slows

The trade in ‘illicit white’ cigarettes is booming, according to KPMG, which has found one in 10 cigarettes smoked in the EU in 2013 were illegal.

The top tobacco crime hotspots
(% of tobacco consumed which is illegal)

1. Latvia – 28.%
2. Lithuania – 27.1%
3. Ireland – 21.1%

A third of those were illicit whites – a type of branded cigarette manufactured for the sole purpose of being smuggled. This means EU Governments are losing approximately €10.9bn in tax revenues to the illegal market.

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 stabilised, declining slightly from a record high of 11.1% in 2012 to 10.5% in 2013.

[pull_quote_right]It’s a real big issue in our area, with people that don’t even have a tobacco gantry selling cigarettes ‘under the counter’ – Jay Gandecha, Retailer[/pull_quote_right]

KPMG partner Robin Cartwright said: “Our latest research on the illegal tobacco market found that while there was positive news on the decreased trade in contraband tobacco products overall across the EU, there are other trends that are cause for concern, including the continued increase in the number of illicit whites being consumed.

“Our report also carries a warning to some countries where large volumes of illegal tobacco are being smoked.”

The highest illegal trade levels for 2013 were in Latvia (28.8%), Lithuania (27.1%), Ireland (21.1%), Estonia (18.6%) and Bulgaria (18.2%).

Watford retailer Jay Gandecha told Retail Express: “It’s a real big issue in our area, with people that don’t even have a tobacco gantry selling cigarettes ‘under the counter’.

“It’s going to get worse when the tobacco display ban comes in next year as well. We are just going to concentrate on the things we do well.”