France accounts for more than half of the EU’s illicit tobacco consumption.
The illegal market in the European Union continued its growing trend last year, increasing by an estimated 0.7%, primarily due to growth in countries like France and Belgium.
The 2022 KPMG annual study on illicit cigarette consumption in the EU, UK, Norway, Switzerland, Moldova, and Ukraine, commissioned by Philip Morris Products SA, reveals that 35.8 billion illicit cigarettes were consumed across the EU alone, causing governments the loss of an estimated €11.3 billion in tax revenue—8.5% more than in 2021.
The growth of the illicit market in the EU was partly driven by the continued rise of counterfeit consumption, which reached its highest level ever recorded. Notably, the vast majority of counterfeits (61.5%) were consumed in France. The country remains the largest illicit market in the EU and now accounts for 47% of total illicit cigarette consumption in the region. An estimated eight billion illicit cigarettes consumed in France were counterfeited products.
Gregoire Verdeaux, PMI’s senior vice president of external affairs, said, "It has truly become a ‘made in the EU’ problem, as fake cigarettes are being manufactured, distributed, sold, and consumed in countries within the EU, undermining efforts to reduce and eliminate cigarette smoking—and public health goals altogether."
Despite the overall rise in illicit consumption, 21 out of 27 EU members reported stable or declining levels of illicit cigarette consumption in 2022, according to the KPMG analysis. With France excluded, the study's remaining markets saw a 7.5% loss in overall illicit consumption, primarily as a result of decreases in Greece, the Netherlands, Portugal, and Romania. Particularly in Poland and Romania, illicit consumption reached the lowest-ever incidence since KPMG began publishing its annual studies.
Moldova and Ukraine were included in the KPMG report for the first time. The 2022 findings placed Ukraine as the second-largest market in Europe for illicit cigarette consumption, with 7.4 billion cigarettes, behind France’s 16.9 billion. The share of illicit cigarettes in Ukraine has followed an increasing trend since 2018—in 2022, one out of five cigarettes consumed stemmed from the illicit market. The third-largest illicit market in Europe is the U.K., with 5.9 billion illicit cigarettes, on the rise since 2020.