Ukraine has become a leader in the supply of illegal cigarettes in Europe

Ukraine in 2016 has become the largest supplier of illegal tobacco in Europe. Informed leadership on the black market belonged to Belarus. This is stated in the report on illegal trade in tobacco products in the EU, prepared by the consulting firm KMPG (RBC).

Over the past five years, the volume of smuggled cigarettes, shipped from the Ukraine, grew by 1.3 billion, and Belarus, on the contrary, decreased by 1.8 billion pieces. Thus, to Ukrainian cigarettes accounted for 12% of the total volume of the illegal market of Europe, while deliveries from Belarus took 10%.

The reason — the low price of Ukrainian cigarettes, analysts explain KPMG. Average cost of a pack (20 cigarettes) in 2017 in Ukraine is €,0,52, and Belarus — €0,6.

The illegal cigarettes market in 2016 amounted to approximately 9% (about 48.3 billion cigarettes) of the total tobacco market in Europe is 0.8 percentage points less than in 2015. 86% of them comes from countries that are not members of the European Union, report. Total tax losses of the European countries because of illegal tobacco was €10.2 billion, analysts estimated KPMG. Most of these cigarettes sold in France and Poland.

At the same time, Belarus remains the main supplier of illegal cigarettes in Russia. Belarusian flow was reoriented from West to East, explained RBC a source in the tobacco market. Now the cost of illegal cigarettes from Belarus is two times less than inexpensive brands of Russian production, and purchasing power of Russians is falling, continues the interlocutor of RBC.

So, in 2016 the share of illegal tobacco products has quadrupled, according to TNS. The main supplier — Russia. According to TNS, the brand Grodno tobacco factory accounts for 26% of the total illegal tobacco market in Russia. In 2016, were produced in Russia 335,7 billion cigarettes, according to Rosstat. Now more than 60% of illegal tobacco products in Russia are legally produced but illegally imported cigarettes from countries of the Customs Union — Belarus, Kazakhstan, Kyrgyzstan, confirms the Manager of regulatory and interaction with the authorities Imperial Tobacco Alexander Alexandrov.

If you do not harmonize excise rates on cigarettes in the countries of the Eurasian economic Union (EEU), to stop the growth of attractiveness of Belarusian cigarettes cheap will not work, said Vice-President of JTI, corporate Affairs and communications Russia Sergey Kiselev. According to him, it is necessary to refuse from the additional indexation of the Russian excise and how you can “faster to reach agreements with the Union.” It will neutralize the benefit that we get criminals from smuggling tobacco, I agree Alexandrov.

The Russian government has already proposed to raise excise taxes on tobacco and use the existing — 1562 rubles. for 1 thousand cigarettes plus of 14.5% of the estimated value. The bill the government submitted to the Duma in June 2017. The bill provides that the excise duty rate for 2018-2019 will be set at the level recorded in the current edition of the Tax code, and 2020 can be increased to 1966 rubles. for 1 thousand cigarettes. This step shows that Russia is ready to meet the other participants of the Customs Union and slow growth rates to bring rates in all countries, says Alexander Alexandrov.