Illicit Tobacco Trade Alarmingly High, EU Consumes 53M
Zacks Investment Research | Jun 08, 2016 09:51PM ET
The latest cigarette trafficking reports have irked the tobacco industry further which has already been grappling with issues like dwindling volumes and high excise taxes.
As per a Klynveld Peat Marwick Goerdeler(KPMG) report published on Jun 8, 53 billion cigarettes were consumed in the European Union alone in 2015, which is an alarmingly high number. This accounts for 10% of the total tobacco market in the European Union (EU). The unlawful activities have dented tax revenues of the industry by as much as EUR 11.3 billion.
KPMG conducts a study every year across 28 European nations including Switzerland and Norway. The data also sheds light on Poland and France, which outdo other countries in illegal tobacco trading. White cigarettes are prohibitively sourced mainly from Belarus. Almost 1.3 billion White cigarettes originate from Jebel Ali Free Trade Zone in the United Arab Emirates. Meanwhile, 88% of the trafficked cigarettes are from non-EU countries.
However, the bright spot in the report is the reduction in illegal trade volumes from 2014 levels, thanks to joint efforts by governments, law enforcement agencies, manufacturers, and retailers.
Tobacco companies across the world have undertaken several measures to combat illicit tobacco trade. In May 2016, Tobacco major Philip Morris International Inc. (NYSE:PM) came up Original post
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