One in four cigarettes consumed in the UK in 2024 were illicit, according to a new report by KPMG and commissioned by Philip Morris.
Although illicit cigarette volumes in the UK decreased by almost 0.8 billion in 2024, it is still the third-largest illicit market in Europe, with 5.9 billion illicit cigarettes consumed last year. Cigarette consumption overall reduced by 2.9bn in 2024 when compared to 2023.
Across the 38 European countries included in KPMG’s 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 €19.4 billion. This up slightly (+0.2%) on 2023.
The top four most counterfeited brands; Marlboro, Winston, Lambert & Butler and Richmond accounted for over two thirds (68%) of all counterfeit consumption across the 38 markets in 2024. Meanwhile, the quantity of cigarettes seized in factory raids nearly doubled from 239.9m in 2023 to 472.6m in 2024.
The reoport recorded 14% fewer legal sales in 2024, damaging the financial viability of stores.
Catherine Goger, Illicit Trade Prevention Manager at PML, said: “This report reinforces why our work with Trading Standards, enforcement agencies, and the retail community across the UK is so vital. We recognise that this remains one of the most urgent threats to the livelihoods of convenience retailers in the UK and their communities, with consumers exposed to unregulated, potentially dangerous products from illicit sellers who show little regard for what they sell or to whom.
“We are using robust local intelligence, tracking illicit flows and driving action on the ground.”
The study highlighted how Organised Criminal Groups (OCGs) are optimising their value chains in illicit cigarette production and distribution by relocating production closer to end markets to cut costs and improve efficiency. There was also a shift towards direct-to-consumer channels, like online platforms, allows them to bypass traditional retail outlets, complicating law enforcement efforts.
For the first time, the KPMG study included 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.
Its research found that contraband consumption stood at 0.4 billion sticks 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 UK having the highest share (7.8%). The report added that no counterfeit flows have been identified.
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