Study reveals drop in Estonian black market for cigarettes

Photo: Ove Maidla

The share of illicit cigarettes in Estonia has dropped by 1.9 percentage points on year to 18.8 percent, a fresh study shows.

The lion's share of cigarette packs without Estonian revenue stamps comes from Russia as before, the Tax and Customs Board and the Estonian association of tobacco manufacturers said citing the findings of the latest empty pack survey by the market research company Nielsen.

«It is clear that the Tax and Customs Board's new methods to combat the illicit market have yielded results. Along with the decline in illicit goods we saw also an increase in legal sales in regions where consumption of contraband goods is high. This is a certain sign that it pays to continue the present balanced excise policy together with targeted efforts to combat illicit trade,» chairwoman of the association of tobacco manufacturers Aili Herkel said.

According to the study conducted in different Estonian towns at the beginning of October, contraband cigarettes are most consumed in the border city Narva, where 40.5 percent of the found empty packs were illicit. The percentage of illicit goods was 40 percent in Sillamae, 38 percent in Kohtla-Jarve, 36 percent in Johvi and 35.7 percent in Valga. The share of illicit cigarettes has declined in all those cities with the exception of Johvi, where an increase of 1 percentage point compared to the first half of 2014 was recorded.

Overall, the situation has considerably improved from the beginning of 2013 when black market cigarettes made up 24 percent of the nationwide tobacco market.

«As a result of the established excise duty restrictions and more efficient customs checks, the amount of illicit cigarettes brought across the border has significantly decreased,» head of the department for customs organization at the Tax and Customs Board Urmas Koidu said. In his words, analyses of the agency show that as lately as 2012 nearly 248 million and in 2013 almost 37 million contraband cigarettes were brought into Estonia across the eastern border, but last year the number dropped to 13 million.

Illicit cigarettes from Russia accounted for 48.4 percent and those from Belarus for 30.4 percent of the found empty packs, down by respectively 1.2 percent and 1.6 percent compared with the first half of 2014. At the same time the share of duty-free tobacco products has risen by 0.9 percentage points.

The empty pack surveys are conducted twice a year. During the latest survey 3,300 empty cigarette packs were collected from 14 Estonian cities.