Thus, Ukraine's budget lost €823 million ($916 million) due to the illegal cigarette market.
The most well-known brand of illegal cigarettes is Compliment, KPMG reports. In 2021, 1.93 billion Compliment cigarettes were sold, rising to 2.41 billion in 2022, and reaching 2.75 billion last year. Other top brands include Marshall and Lifa.
KPMG data shows that the illegal consumption of cigarettes across 38 European markets, including Ukraine and Moldova, increased by 3% to 52.2 billion cigarettes. This growth accelerated compared to 2022, when the increase was only 0.3%. Ukraine (+1.1 billion cigarettes), the United Kingdom (+0.8 billion), and Greece (+0.6 billion) were among the countries with the highest increases. In most countries (21 out of 38), the volume of illegal consumption remained stable or decreased.
"In Ukraine, high taxes and the lack of cheaper legal alternatives push the market into the illegal sphere, and the shadow market is growing significantly. The problem is complex and multifaceted," said Christos Harpantidis, Senior Vice President of External Affairs at PMI. Ukrainian authorities are preparing to review their tax policy, he added.