Ukraine is facing the task to reduce the average annual share of illegal products on the tobacco market not more than 5%, while last year the figure was 19.9% on average.
According to the head of the parliamentary committee on finance, tax and customs policy Daniel Getmantsev in Telegram-channel, the country recorded a decrease in the illegal cigarette market to 17.8% in November from a record 21.9% in August.
“The illegal tobacco market is shrinking! Kudos to law enforcement and the Excise Department of the State Tax Service. Our goal is to get the illegal tobacco market to a maximum of 5% by the end of the year!” he wrote.
According to research agency “Kantar Ukraine” in August 2022 the share of counterfeit cigarettes in Ukraine was 8% of the total market, while in 2021 in November – 6.6%, August – 5.6% and February – 4.2%. The share of cigarettes labeled as intended for export and sale in Duty Free, but sold illegally in Ukraine in August 2022 was 12.2% of the total Ukrainian cigarette market, while in 2021 it was 10.9% in November, 9.8% in August and 6.9% in February.
In turn, the share of smuggled cigarettes in August-2022 decreased to 1.8% compared to 2.9% last November and 2.7% in August-2021.
“Kantar” recalled, the average annual level of illegal tobacco sales in Ukraine in 2021 was 16.9%, while in 2020 – 6.9% (10 p.p. less), in 2019 – 6.6% (10.3 p.p. less), in 2018 – 4.4% (12.5 p.p. less). The lowest illegal cigarette market volume in a decade was recorded in 2016 at 1.1%.
The largest share of illegal cigarettes in August-2022 was recorded in Dnipropetrovsk region – 20% of the entire market, in Odessa (13%), Kharkiv (8%), Khmelnytsky and Lviv (7% each) regions, as well as in Kiev (6%). In the capital this indicator is 8%.
As reported, in October 2022, Hetmantsev said that law enforcement officers have been conducting searches in September at the United Tobacco (LLC “United Tobacco”, Zheltiye Vody, Dnipropetrovsk region), which is suspected of illegal production of tobacco products. The law enforcers have already identified the suspects in the crime and assessed the scale of illegal activity.
According to the European Business Association (EBA), representatives of Ukrainian business expects the law enforcement system of Ukraine to take active measures to combat the shadow markets, including the production of illegal cigarettes, and are ready to assist in establishing the damage from the illegal activities of such enterprises.
