It's Boom Time for Europe's Cigarette-Smugglers
Driven by economic woes, a rising contraband cigarette market costs a continent up to a billion Euros.
Four years into the economic crisis, Europe's black market for cigarettes is booming—at an immense cost to the EU. Concerned by plummeting profits, cigarette companies launched a major investigation, paying "researchers" to rummage through the garbage of cities in 27 European nations, collecting and analyzing crumpled cigarette packs. The scavenging indicated record levels of contraband cigs—about 10% of the market, or 65 billion cigarettes, according to a recent report. “In times of economic crisis, especially a long economic crisis like the one Europe is experiencing now, people have less disposable income, and they are particularly interested in cheaper products,” says Bulgaria's deputy prime minister, Simeon Djankov. In Dublin, for example, a pack of smokes sells for about 9.20 euros in a store—but a contraband pack can be purchased for around a third of the price, at just 3.20. But while smokers save cash, the immense loss of tax revenue is impacting the market, and has reportedly cost the EU up to one billion euros.
Cigarette smugglers stash their cargo in anything from furniture shipments, to loads of Christmas trees, to children's toys. The trade is less profitable than narcotics—but it also carries a shorter prison sentence. So many middle-class people in financial straits, with no previous record of smuggling, are being tempted into the game. Law enforcers fear that a well-structured crime organization is involved, due to the enormous volume of illegally imported cigarettes. “A lot of people perceive this as a ‘Robin Hood’ type of fraud and that the ordinary person in the street, who has a lot less money these days, is gaining the benefit,” says Austin Rowan, head of the cigarette smuggling at OLAF, the European Union’s Anti-Fraud Office. “But this trade is financing organizations that are involved in other activities, including drugs smuggling.”