Illicit cigarette importation to Malta continues to decline

Malta’s Customs has claimed for itself a victory over the traffic of illicit cigarettes, with reductions of illegal imports continuing to fall due to effective controls and tax stability.

KPMG’s 2020 annual report on illicit cigarette consumption in the EU, UK, Norway and Switzerland reveals that, while total cigarette consumption continued to decline, the market share of illicit cigarettes increased by 0.5%, to 7.8% of total consumption in 2020, or 34.2 billion of illicit cigarettes.

The increase of illicit cigarettes – which consist of contraband, counterfeit, and illicit whites – was driven by an unprecedented 87% surge in counterfeit consumption. The tax loss for governments in the EU27 now amounts to approximately €8.5 billion.

But Malta has experienced a steady decline in the illicit cigarette trade since 2016.

France is the European country with the highest illicit cigarette trade incidence – 23.1% of the market share, followed by Greece with 22.4%.

France registered an unprecedented 609% increase in counterfeit cigarette consumption, reaching 6.0 billion of fake cigarettes consumed.

In Greece, the State lost €551 million due to the illicit cigarette trade in 2020.

On the other hand, Malta experienced a steady decline in the illicit cigarette trade since 2016. The market share of illicit cigarette trade in Malta reduced from 17.2% (equivalent to 0.09 billion illegal cigarettes) in 2016 to 6.4% (equivalent to 0.03 billion illegal cigarettes) in 2020.

The estimated total tax revenue lost for Malta in 2020 was €6 million.

Business Royals is the cigarette brand which remains the main driver of this illicit trade in Malta. Their source is mainly Italy and Poland.