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KPMG survey data shows that the situation is better in other Baltic countries: the share of illegal tobacco products declined in Latvia and Estonia last year.
Almost a fifth: 17.7 percent. Cigarettes consumed in Lithuania last year were tax-free, and according to this indicator, the country was significantly ahead of Latvia (14%) and Estonia (7%) and ranked second in the European Union, only after Greece, where counterfeit and smuggled cigarettes accounted for 22%.
A study of KPMG’s empty packets and sales data shows that the total amount of cigarettes smoked in Lithuania decreased slightly last year, but even 540 million tons were consumed. illegal cigarettes: 0.04 percent, or 0.2 million. units more than in 2018.
According to the study, the share of the shadow tobacco market in Estonia fell by 2.1 points last year, and in Latvia by as much as 5.4 points.
About 80 percent. Cigarettes imported into Lithuania last year came from neighboring Belarus. By estimating that up to 40 cigarettes can be imported per person, the researchers estimate that illegal products account for most of this flow. Most of them are consumed in Panevėžys County.
Illegal tobacco use in the EU, the UK, Norway and Switzerland fell 11% last year. However, almost 38.9 billion euros were sold across Europe. smuggled cigarette units: 7.9 percent. of all smoked cigarettes. According to the researchers, state budgets have lost around 9,500 million euros as a result. euro income
The largest flows of smuggled cigarettes reach the EU countries from Ukraine and Belarus.
The study was commissioned by PhilipMorris Products of KPMG. Experts assessed the situation in 28 EU countries, as well as in Norway and Switzerland.
A. Neverauskas: a systematic and forward-looking approach is needed
Arnas Neverauskas, executive director of the National Association of Tobacco Producers, says that an unusual situation is seen in Lithuania, when the shadow tobacco market has been expanding since 2017, at least until the coronavirus crisis, as it increases the income of the population. According to him, this is evidenced, for example, in an empty package study carried out by the research company Nielsen.
“Traditional logic would tell us, at a minimum, that the shadow market for tobacco products should also shrink, because one of the most important elements in people choosing illegal products is still price. But we don’t have that situation: this market is shrinking, we have its growth trends, “A. Neverauskas told BNS.
According to him, the state must understand that it is necessary to provide the State Border Guard Service and customs with equipment and other resources.
Arnas Neverauskas
“It just came to our attention then. These are certain investments, as they go back to the country’s budget from another angle. At least 1 percent. The increase in the illegal tobacco market leads to $ 3 million. Only from uncollected excise tax “Said the head of the association.
According to him, another factor that hinders the fight against the shadow market for smokers is a policy that lacks systematization and foresight.
“For example, today in the Seimas even five draft laws on the Tobacco Control Law were discussed. I will highlight five. Currently, Lithuania is one of the strictest tobacco regulators in the European Union, and at the same time in the world (…), but such a large number of legislative initiatives shows that there is a great lack of a systemic approach and perhaps an overly visionary approach to how those initiatives respond to the illegal market for tobacco products, “said A. Neverauskas .
“The lack of an integrated and forward-looking approach is very concrete,” he added.
A. Neverauskas is convinced that after the current crisis, the shadow tobacco market will only grow, but would have increased even without the crisis.
“The population’s income is likely to start to fall. When the population’s income falls, some people who use tobacco products will have to look for other alternatives, where they can save money and therefore limited funds,” said A Neverauskas.
One of the reasons for the growth of the shadow market is the ban on mint cigarettes, which entered into force in the European Union in May and represented approximately a fifth of the legal market in Lithuania.
“Yes, some consumers will start using traditional tasting tobacco products, some will look for legal alternatives (such as e-cigarettes, incandescent tobacco, and other products), a very small proportion, as our sociological data shows, may consider abandoning those products altogether. “But it will be a small part. However, a really large proportion will look for alternatives,” said A. Neverauskas.
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