France accounts for nearly half of illicit cigarette consumption in the European Union, with high taxes and inflation driving people toward counterfeit products, according to a study released on Wednesday.
(Bloomberg) — France accounts for nearly half of illicit cigarette consumption in the European Union, with high taxes and inflation driving people toward counterfeit products, according to a study released on Wednesday.
While overall consumption of counterfeit and contraband cigarettes, excluding France, declined across the bloc last year by 7.5%, it rose by 1.8 billion cigarettes in France, which now accounts for 47% of the area’s illicit consumption.
Countries including the Netherlands, Greece, Portugal and Romania saw a decrease.
“France starts to look like Latin America, you cannot find these levels in the rest of Europe,” said Gregoire Verdeaux, senior vice president of external affairs at Philip Morris International SA, which commissioned the study from KMPG.
“France is a perfect storm,” which combines very high taxes, high inflation and delinquency that feed into larger levels of consumption, he added.
With a record 35.8 billion illicit cigarettes consumed in the EU last year, the governments lost an estimated 11.3 billion euros in tax revenue, the study showed.
Belgium, Denmark, France and Germany saw a rise in cigarette seizures and raids on clandestine manufacturing operations.
–With assistance from Zoe Schneeweiss.
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