BUSINESS

500 mln lost to cigarette smuggling

By Vangelis Mandravelis

Sales of smuggled cigarettes have more than trebled in Greece, amounting to an estimated 3.5 billion euros per year, or 15 percent of the legal market, as the worsening of the economic recession and repeated price hikes for tobacco products have frustrated smokers.

Historically, the smuggled cigarettes market had amounted to 3 percent of the legal one, but the latter is rapidly shrinking. In the years 2010 and 2011 it contracted by a total of 25 percent, while for the first two months of 2012 it has shown an additional decline of 10 percent year-on-year.

Market professionals believe that the Greek state has missed out on revenues of up to 500 million euros from special consumption tax on tobacco, money which is now distributed mostly among cigarette smugglers, according to some.

Illegal cigarettes cost an average of 1 euro per pack, out of which the 40 cents constitute a clear profit for smugglers. Estimates put the number of illegal cigarette packs traded last year at 170 million.

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