**Illegal Cigarette Market Grows in Cyprus, According to KPMG Report**
Cyprus is witnessing a notable increase in the consumption of illegal cigarettes, as detailed in a recent report by consulting and advisory firm KPMG. Released on Thursday and conducted for Philip Morris International, the report indicates that the trend is part of a broader issue affecting the European Union, where illicit cigarette consumption has now surpassed 10 percent of the total market for the first time since 2014.
In Cyprus, the situation is particularly concerning, with illegal cigarettes accounting for an estimated 16.3 percent of total cigarette consumption. This figure marks a two percentage point rise from the previous year, indicating a growing challenge for authorities and public health advocates. The report estimates that around 160 million illegal cigarettes were consumed in Cyprus over the past year, contributing to significant revenue losses for the government.
The financial impact of this illicit trade is substantial, with lost revenue for public coffers estimated at €27 million, an increase from €22 million reported in 2024. This trend reflects a wider pattern across the EU, where a staggering 41.8 billion illegal cigarettes were consumed, representing 10.3 percent of the total market. The financial implications for EU member states are severe, with public revenue losses reaching approximately €16.7 billion.
The report highlights that France continues to lead the EU in illegal cigarette consumption, with a staggering 41.4 percent of its market comprised of illicit products. Belgium follows closely with 24.8 percent, while the Netherlands exceeds 22 percent. These figures underscore the significant challenges faced by governments in combating the illegal cigarette trade, which not only affects public health but also has dire economic consequences.
In addition to traditional cigarettes, the KPMG report also examined the market for illicit heated tobacco products, which currently represent a smaller segment of total consumption at just 1.2 percent. While this figure is relatively low compared to traditional cigarettes, it suggests that the market for alternative tobacco products is also beginning to experience illicit activity.
The increase in illegal cigarette consumption in Cyprus and across the EU raises critical questions about the effectiveness of current tobacco control measures and the need for enhanced enforcement strategies. Authorities are likely to face ongoing challenges in curbing this trend, as the demand for cheaper tobacco products continues to drive consumers towards the black market.
As the report highlights, the implications of illegal cigarette consumption extend beyond lost revenue. The presence of unregulated products poses health risks to consumers, as these cigarettes are often produced without quality controls and may contain harmful substances. This situation presents a dual challenge for public health officials and policymakers, who must address both the economic and health-related consequences of the growing illegal tobacco market.
In response to these findings, stakeholders in Cyprus may need to consider a range of strategies to combat the rise of illegal cigarettes. These could include increased enforcement of existing laws, public awareness campaigns to educate consumers about the risks associated with illegal tobacco products, and potential policy adjustments aimed at making legal products more accessible and affordable.
As the report from KPMG underscores, the issue of illegal cigarette consumption is not just a local concern but part of a larger trend affecting the entire European Union. The challenge ahead will require coordinated efforts among governments, health organizations, and the tobacco industry to effectively tackle this growing problem and safeguard public health while also protecting vital government revenues.
The findings of the KPMG report serve as a reminder of the complexities involved in regulating tobacco products and the ongoing need for vigilance in the fight against illicit trade. As Cyprus grapples with these challenges, the focus will likely remain on developing effective solutions that address both the economic and health impacts of illegal cigarette consumption.