Active anti-smuggling efforts would trim Lithuania's illicit tobacco market

VILNIUS – As Lithuania continues leading the European Union (EU) in terms of illicit cigarette market, executive director of the Lithuanian Association of Tobacco Producers says that successful prevention was the best way of fighting smuggling activities.

"Unfortunately, the illicit production enters our country from neighbors in large volumes. We are aware that they produce far more than they need for their domestic needs. Therefore, they are trying to export and the shortest route is to Lithuania, which serves as a corridor to other European states. Difference in prices is another issue – increase in excise duty is immediately followed by increase of the illegal market share," executive director Arnas Marcinkus told BNS.

In his words, the illegal market share is shrinking, however, not fast enough. Marcinkus said customs officers were doing a good job and apprehending large amounts of smuggled products, calling for more efficient cooperation among relevant institutions.

"The customs are indeed efficient, we are in a far better position here, as compared with Latvians. On the other hand, it is a bit too early to celebrate the slight decline," he added.

The market of illegal cigarettes in Lithuania is shrinking, however, remains among the biggest in the European Union, according to the latest study by the international audit, tax and consulting company KPMG. Illicit cigarettes last year accounted for 17 percent of Lithuania's total tobacco product market, down by 1.7 percentage points year-on-year. If these cigarettes had been purchased legally, the government would have raised around 62 million euros in additional tax revenues, the study showed.