A pack of branded cigarettes costs roughly eight euros in Germany, the majority of which is taxes. A lot of money, many citizens think and turn to the black market.
According to a study, the sale of counterfeit or smuggled cigarettes remains a serious problem in Germany. According to a study by the consulting firm KPMG commissioned by Marlboro manufacturer Philip Morris International (PMI), an estimated 1.6 billion cigarettes were sold illegally in Germany last year. This accounts for 2.1 percent of total cigarette consumption. In 2022 it was 1.7 billion.
The survey involved sifting through the contents of garbage bags and collecting packages discarded on streets to determine whether they were legally sold goods. 150,000 packs were checked.
“The state is losing out on large amounts of tax due to illegal transactions; in 2023, according to KPMG estimates, it was 368 million euros in Germany alone,” said Philip Morris expert Tammo Körner. He recommended stricter controls. “The federal government should better equip customs authorities to decisively counteract tobacco smuggling and counterfeiting.”
Illegal factories also in Germany
There are different types of illegal products on the black market. According to the study, cigarettes are manufactured in legal tobacco factories in countries such as Belarus, Moldova and Kosovo. However, a large part of the production does not end up for legal sale, but rather abroad via illegal channels.
There is also illegal production in Germany. An example of this was a cigarette factory in Iserlohn (North Rhine-Westphalia), which was raided by customs investigators in June 2022. 20,000 cartons of cigarettes and a manufacturing and packaging facility were found. Boxes with the fake Marlboro logo were also seized.
From expert Körner’s point of view, Iserlohn is just one example of some suspected illegal manufacturing locations. “Germany is increasingly becoming a production country for the tobacco black market.” The illegally manufactured cigarettes are often brought to France or Great Britain because higher profits are made there than at home.
“This is a highly lucrative business for criminals, in which the real people behind it can rarely be arrested,” said Körner. With the relocation of illegal production from Eastern Europe to Western Europe and thus also to Germany, the journey will be shortened and the risk of being caught by customs investigators will be reduced.
Black market in France and Great Britain much larger
The KPMG study covers 38 European countries. In other countries the black market is significantly larger than in Germany. The study authors estimate the number of cigarettes sold illegally in France at 16.8 billion, about ten times as high as in Germany.
According to the study, every third cigarette smoked in France comes from an illegal source; in Germany it is only every fiftieth. In Great Britain there are 6.7 billion – where one in four cigarettes smoked comes from the black market. “The taxes and therefore the prices for cigarettes are significantly higher there than in Germany, so the black market supply and the demand for them are correspondingly greater,” explains Körner, explaining the difference in the situation.
Source: Stern
