Illegal cigarette consumption in Cyprus reached 11% of the total market in 2023, according to a new annual independent report by KPMG for Philip Morris International (PMI).
The report reveals that despite a marginal decrease in the percentage of illegal cigarette consumption, tax revenue losses remain high at €18 million.
A total of 100 million illegal cigarettes were consumed in Cyprus during 2023, with the increase primarily attributed to the influx of contraband cigarettes from areas where the Republic of Cyprus does not exercise control.
Outflows of illicit cigarettes from Cyprus rose by 3% compared to 2022, with increased outflows to smaller markets.
This increase was partially offset by reduced outflows to the United Kingdom, although it remains the primary destination for illegal cigarette outflows from Cyprus in 2023.
Gregoris Kamperis, General Manager of Philip Morris Cyprus, emphasised the importance of public-private cooperation in combating this global issue.
He stated that PMI continues to support relevant European regulations, such as the EU directives on tobacco product tracking and tracing.
The report also highlighted concerning levels of illegal cigarette consumption across the European Union.
Over 35 billion illegal cigarettes were consumed in the 27 EU member states in 2023, accounting for 8.3% of total EU consumption.
Illegal cigarette consumption has been increasing for five consecutive years in Europe, reaching 52.2 billion cigarettes in the 38 countries included in the study.
Counterfeit cigarettes remain a primary source of overall illegal consumption in the region, with 12.7 billion (36%) cigarettes consumed as criminal networks increasingly target markets with higher taxation and prices.
EU governments lost approximately €11.6 billion in tax revenue in 2023, compared to €11.3 billion in 2022.
Christos Charpantidis, Senior Vice President of External Affairs at PMI, called for innovative approaches to complement traditional tobacco control policies, emphasising the need for harm reduction strategies for adult smokers who would otherwise continue smoking.
The report notes that the steady increase in counterfeit cigarette consumption across Europe, primarily driven by the UK and Ukraine, is now combined with growth in all other categories of illegal trade.
This, along with the recovery of legal cross-border quantities following the lifting of COVID-19 travel restrictions in 2022, has pushed overall non-domestic consumption in the 38 European countries studied to its highest recorded level (15.5%), equating to more than one in six cigarettes.
