Annual volumes of the illegal tobacco market have significantly decreased, but losses for the budget are high – monitoring data
13 December 15:56
In October, there was another decrease in the overall level of illegal trade in tobacco products in Ukraine – to 12.6%, compared to 19.1% at the beginning of the year and 14.6% in July 2024. This is evidenced by the data of the project “Monitoring of Illegal Trade in Tobacco Products in Ukraine” conducted by Kantar Ukraine at the request of leading domestic tobacco manufacturers, according to
According to the annual average, the volume of the illegal tobacco market in Ukraine decreased from 21.8% in 2023 to 16.1% in 2024. Therefore, the annual losses of the state budget of Ukraine are estimated at UAH 21.9 billion, and the volume of the shadow cigarette market in Ukraine is 6.3 billion units.
“We continue to see another decline in the level of the illegal cigarette market in Ukraine. As a result, the average annual figures have also significantly decreased to 16.1% compared to 21.8% in 2023. The volume of counterfeits, including fake excise stamps, and illegal products intended for export or labeled “Duty Free” is decreasing,” comments Tetyana Sverdlyk, Kantar Ukraine analyst.
What brands are worth paying attention to
53% of illegal products marked with Duty Free or intended for export and illegally sold in Ukraine are produced by Vynnyky Tobacco Factory, according to the inscription on the packaging. The trademarks of this group of illegal products are Compliment (45%), Lifa (6%), and Marvel (2%).
Among the counterfeit products, 34% have signs of fake excise stamps. According to the inscription on the packaging, they are produced by United Tobacco / Marshall Fine Tobacco / VK Tobacco FZE (18%) and Ukrainian Tobacco Production (15%).
Law enforcement has enough work to do
Detectives of the Territorial Department of the Bureau of Economic Security in Kyiv have recently exposed individuals who have set up a network of retail outlets in the capital to sell counterfeit cigarettes of well-known brands without excise stamps. During the searches, detectives seized about 400 thousand packs of cigarettes.
The BES detectives also exposed a group of people who organized the illegal production and distribution of excisable goods on an industrial scale in the forest zone of Kyiv region. The group manufactured cigarettes without excise tax stamps and without permits. Finished products were seized, namely 128 thousand packs of cigarettes, more than 5 tons of hookah tobacco, and more than 10 tons of tobacco for cigarettes. The estimated value of the seized property is UAH 23 million.
Similar reports appear almost daily, emphasizing the scale of the problem.
Manufacturers call for consistency
After the shutdown of several illegal tobacco factories in May 2024, the share of the illegal cigarette market in Ukraine, according to Kantar Ukraine, has fallen sharply. But the problem is that the shut down illegal factories are trying to resume production. This was stated by Philip Morris Ukraine CEO Maxim Barabash in an interview with Interfax Ukraine.
“Today, taxes account for 75-80% of the price of cigarettes. That is, in the cheapest pack of cigarettes costing 80 UAH, approximately 67 UAH are taxes, and if they are not paid, such business brings excessive profits,” explained Maxim Barabash.
The CEO of Philip Morris Ukraine calls on the Ukrainian authorities to strengthen the systematic approach to combating the illegal tobacco market. Control, as well as law enforcement raids, should be carried out on a regular basis.
By the way, as reported by
