Nationwide consumption of counterfeit and contraband cigarettes remains at two-year peak level, according to the latest KPMG report on Illicit Cigarette Consumption in Europe, commissioned by Philip Morris International (PMI).
The study shows illicit cigarette consumption in the UK has peaked over the past two years, showing that more than 1 in 4 cigarettes consumed was illicit. The report also shows the UK illicit market maintained its position as the third largest in Europe – by both volume and proportion of cigarettes consumed – despite falling in the bottom fifth in Europe for smoking prevalence. Illicit share of cigarette consumption remains markedly high in urban areas within London, the West Midlands, and the Northwest.
KPMG states that the continuation of high illicit cigarette consumption from 2023 highlights the resilience of the illegal market. Nearly 26% of all cigarettes consumed were illicit, equating to 5.9 billion cigarettes, which represents £3.15bn in tax revenue lost from the Government as a result.
The findings shine a spotlight on the immediate risks faced by legitimate retailers, particularly those operating in the convenience and wholesale sectors. With 14% fewer legal sales recorded last year, the viability of these stores is being hit hard by illicit activity.
Catherine Goger, Illicit Trade Prevention Manager at PML, commented: “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.”
PML has intensified its support in cracking down on illicit trade. Former Scotland Yard DCI and illicit trade prevention consultant Will O’Reilly said: “This year, PML has increased the number of undercover test purchases we carry out on their behalf. We’ve visited hundreds of stores across the UK to gather intelligence on, and evidence of, suspected illicit activity. The information captured from this is routinely shared with Trading Standards and enforcement agencies to aid prosecutions and disrupt the increasingly complex and industrialised illegal supply chain run by organised crime groups.”
