Contraband Tobacco Costs Greece Up to €1 Billion a Year

λαθραία-τσιγάρα
The Greek government is losing up to 1 billion euros every year from the sale of contraband cigarettes and tobacco.

Last year, Greece lost an estimated 740 million euros in revenue, up from 565 million euros in 2013. The figures were released by Euromonitor this weekend. According to the report, the lost revenues will reach 1 billion euros in 2019.

Euromonitor takes into account the average price for a pack of cigarettes in Greece — 3.80 euros in 2014 — and the average tax burden per pack which is 85 percent of the tax inclusive retail sales price.

“This growth has been fueled by excise and industry-driven price increases and is fed by the expanding availability of illicit white cigarettes from the United Arab Emirates and eastern Europe for which Greece acts as a transit point to the wider European region,” said Shane MacGuill, tobacco analyst at Euromonitor.

Illicit white cigarettes is the term for tobacco products manufactured for the sole purpose of smuggling. Cigarette smuggling is increasing every year as tax hikes on tobacco products continue.

In 2014, the illegal tobacco trade accounted for 21 percent of all cigarettes sold in Greece. In 2013, contraband tobacco products accounted for 18 percent of total consumption, according to a survey by AC Nielsen S.A..

“Further excise hikes and the continuing use of Greece as a transit hub means penetration is likely to reach and exceed 25 percent by 2019,” MacGuill added.

Regarding tackling the issue of contraband tobacco, MacGuill also said, “The government and the industry must take action to lower the demand for contraband products by lesser tax hikes and by educating Greek consumers about the dangers of illicit cigarettes.”