Analytics, Baltic States – CIS, EU – Baltic States, Legislation, Markets and Companies, Transport

The large proportion of illegal tobacco means that Latvia loses around EUR 69 million a year in unpaid taxes on cigarettes.

In 2016, the share of contraband cigarettes in Latvia contracted by 4.1 percentage points from 2015 and by 8.1 percentage points from 2012.

In Estonia and Lithuania, the share of illegal cigarettes was 13.3% and 17% respectively in 2016.

Cigarette consumption in Latvia declined by 3% from a year before to 2.44 billion units in 2016, while the share of contraband and counterfeit cigarettes accounted for 22.6% of total consumption, or 0.55 billion cigarettes.

The number of contraband cigarettes decreased because of a drop in overall tobacco consumption, as well as a successful work of law enforcement authorities.

The authors of the survey conclude that cigarette contraband is fueled mainly by price differences. While in Latvia a pack of cigarettes could be bought for EUR 2.89 on average, in Russia it could be bought for EUR 1.04, and in Belarus for EUR 0.6. The most popular cigarette brands that were smuggled into Latvia in 2016 included Premier, NZ, Winston, Bayron and Fest.

Traditionally, cigarettes were smuggled into Latvia mainly from Belarus and Russia. Of all illegal cigarettes, 407 million or 80.1% came from Belarus and 83 million or 15.1% from Russia.