Contraband cigarettes market in Latvia drops 18% last year – survey

The illegal cigarettes market in Latvia last year dropped by 18% from 2015, according to the latest KPMG report on trade of illegal cigarettes in the EU.

The data suggest that it is one of the steepest drops among all European country covered by the survey. For example, illegal market share in Estonia declined by 12%, and in Lithuania – by 11%.

At the same time, Latvia was the only of the Baltic states demonstrating a rise of the legal cigarettes market in 2016.

"Despite the constantly growing prices, smokers prefers legal cigarettes. It definitely proves the successful work of Latvia’s law enforcement institutions, combating the illegal market. According to KMPG researchers, the illegal cigarettes market in Latvia in 2016 was 550 million, and more than 141 million cigarettes have been confiscated, which is a very good achievement," said State Revenue Service representative Baiba Smite-Roke.

She said that law enforcement institutions continue active work to prevent circulation of illegal products in the Latvian market.

As reported, according to KMPG survey, Latvia still has the highest share of contraband and counterfeit cigarettes among EU member states, Switzerland and Norway, as illegal cigarettes make up 22.6% of total consumption in Latvia.

The large proportion of illegal tobacco means that Latvia loses around €69 million a year in unpaid taxes on cigarettes.

In 2016, the share of contraband cigarettes in Latvia contracted by 4.1% from 2015 and by 8.1% from 2012. In Estonia and Lithuania, the share of illegal cigarettes was 13.3% and 17% respectively in 2016.

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