Greek Crisis and Tax Hike Foster Cigarette Smuggling

Source from:  ANSA Med 12/21/2015

Consumption of smuggled cigarettes has risen by about 50% in Greece since the economic crisis began, turning the country into a large-scale importer of cigarettes as well as a black-market hub.

This emerged during the signing of an agreement between the Naples Guardia di Finanza (financial police) and British American Tobacco, during which discussion was held on the illegal market of "Illicit Whites" cigarettes produced legally for different EU markets and which are smuggled and sold in Europe in non-compliance with EU standards and evading taxes. In Greece, figures from the national statistics agency Elstat and the finance ministry show a gradual but constant increase in the consumption of smuggled cigarettes, from 10.8% in 2010 to 14.9% in 2011, 17.2% in 2012 and over 23% in 2013. In 2014, according to a study by the Dutch company KGMG on the illegal consumption of tobacco products in the EU, some 4.43 billion smuggled cigarettes were smoked in Greece, while legal cigarettes smoked in the same country fell by 10 billion from 2009 to 2014. The research shows that the price of 'legal' cigarettes is the main reason for the rise in sales of smuggled ones, both in Greece and in other European countries. From 2009 to 2013, the price of the most frequently sold goods rose by 19% and cigarettes by 59%.

A study by the economic planning and research center KEPE shows that the largest rise was in November 2010, when the government rose excise duties on them by about 300%. Greece, alongside Italy and Spain, has also become a reference point for smugglers from which to illegally export cigarettes to northern Europe, where the earnings are even higher: in the UK a packet of cigarettes costs an average of 9 euros, while in Norway it is 11. Italy's Guardia di Finanza investigations show that criminal organizations earn enormous amounts, since they pay between 100 and 150 euros for a crate of cigarettes (20-30 cents per packet) wholesale and then sell the crate for 800-900 euros. Greece has in particular become a departure hub for cigarettes, according to the KPGM study, in containers leaving from the Piraeus and Salonika ports. Enditem