A global problem
Illicit trade is one of the most threatening economic problems worldwide. Some research indicates that up to 600 billion cigarettes a year are illegal, which represents approximately 12% of world consumption.
Cigarettes are among the most commonly traded products on the black market due to high profit margins, relative ease of production and movement and low detection rates and penalties.
The illegal market of tobacco products does not consist a threat only for tobacco companies but also governments that miss out on revenues, legitimate retailers lose income and consumers get unregulated products for the benefit of smugglers and organized crime.
The phenomenon of illicit trade in Greece
Illicit trade of tobacco products has dramatically increased in Greece during the past years, and it is likely to increase more if the necessary measures are not taken. Within the last 5 years, illicit trade in our country has experienced a dramatic increase from 5% in extremely high levels today (cigarettes and loose tobacco). Recent studies show that more than 2 out of 10 cigarettes consumed in Greece are illicit.
What can be done?
The only way to stop illicit trade is for regulators, law enforcement authorities and the tobacco industry to work together. For that reason, British American Tobacco Group:
Invests more than 70 million € each year in the fight against the tobacco black market
Gathers commercial information on the illegal trade
Is in favor of a digital coding solution and T&T technology that allows the company to track the forward movement of its products through the supply chain
Raises awareness of the issue among our employees, business partners and the public
Illicit product: Any product which is smuggled, counterfeit, or undeclared local production. Another term used is contraband.
Smuggling: The movement of product (either genuine or counterfeit) from one jurisdiction (country, state etc.) or excise regime to another in circumstances where it is unlawful to do so because it is done without payment of the applicable taxes and/or duties in the relevant jurisdiction, or in breach of laws prohibiting its import or export.
Undeclared local production: Product which is manufactured and sold for consumption in the same country and which is not declared to the local excise authorities and therefore excise tax is not paid. These products may be manufactured in approved factories, or they may be manufactured in illegal covert operations.
Cross-border trade: Genuine product that has been purchased in one country, duty paid or duty free, and then brought into another country and consumed without payment of taxes in that country. This is only illicit trade if the volumes involved are for commercial use or, if for personal use, is in excess of personal allowances.