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Italy, illicit cigarettes steal half a billion euros from the treasury

According to a study published by Philip Morris International and carried out by KPMG, smuggled or counterfeit cigarettes are decreasing in Italy but still amount to 2,6 billion, i.e. 3,9% of total tobacco consumption, and subtract from the State a bag of money – Friuli and Campania are the regions where the consumption of illicit cigarettes is greatest

Italy, illicit cigarettes steal half a billion euros from the treasury

If smoking is bad, let alone the damage deriving from the purchase of counterfeit or contraband cigarettes, with all the consequences not only on health but also on the front of tax evasion and the tobacco production chain. According to data processed by KPMG and published by Philip Morris, Italy in 2019 the total share of illicit product stood at 3,9% of total national consumption, equal to 2,6 billion cigarettes. This meant a loss of revenue for the treasury also for 2019, amounting to around 495 million euros. And yet, both data, although still high and alarming, show a sharp drop compared to 2018, when 4 billion illicit cigarettes were consumed (therefore -35% last year) and the loss of revenue from state coffers amounted to 730 million.

Not only: the incidence of illicit cigarettes in Italy is below the EU average (7.9%) and is very similar to that of other large European countries, such as Germany. However, unlike the latter, where the volumes of offenses are growing, in Italy the trend shows a decrease, testifying to the effective contrast and deterrence action carried out by the Italian police forces. However, another phenomenon is growing in Italy, that of illicit whites, or cigarettes produced legally abroad, but illegally introduced into Italy, where their sale is not authorised. Their diffusion in absolute numbers has decreased, but their share in the Italian illicit market has risen to 35%. Among these, the "Regina" brand alone is worth 15% of national illicit consumption, winning the primacy of the best-selling illicit cigarette in Italy.

The report also highlights the difficulty of tracing the country of origin of counterfeit and illicit whites. With reference to the reconstructed flows, the main traffic is recorded from Slovenia (11% of the total, which explains how Friuli Venezia Giulia is one of the two regions with the most illicit consumption, just behind Campania) and from Ukraine (7,7% of the total). At the same time, study revealed a growth in the clandestine production within the borders of the European Union itself.

“The KPMG data – he commented Marco Hannappel, President and CEO of Philip Morris Italy – show an improving picture for Italy in 2019: an important result, which rewards the synergistic approach between the actors of the public world and those of the private world, and which requires thanks to the police forces for the effort and commitment to protect consumers, public revenues and the market. We must continue to remain focused on fighting the phenomenon through collective efforts: on the one hand by taking into account some worrying trends that persist, such as the problem of illicit whites and the increase in counterfeit cigarettes; on the other, maintaining a high level of attention also on new products without combustion, where there are already cases of smuggling. We will continue to collaborate with all relevant actors to remain vigilant on the new dynamics of the illicit market".

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