For the first half of 2018, the market of illegal cigarettes in Ukraine has doubled and now stands at 4.5%. “Interfax-Ukraine” writes about this with reference to the estimates of one of the largest manufacturers of cigarettes, “JTI Ukraine” company.
“The dynamics are alarming. If the government does not adhere to the eight-year plan and constantly introduces something beyond the agreed, for example, increases the excise tax by 30% annually instead of 20%, then the illegal market will grow further,” commented Paul Holloway, CEO of JTI Ukraine.
He notes that the illicit market mainly grows through smuggling. A lot of unknown brands come to Ukraine from the UAE. Some of them come through duty-free shops.
According to KPMG, for the second year in a row, Ukraine has been the leader in the ranking of the source countries for smuggled cigarettes into the EU, with an indicator of more than 4.8 billion. “This is almost 11% of the total smuggling into the European Union,” says Holloway.
By the way, in general, the cigarette market in Ukraine for the specified period decreased by 11-12%. The reason for the negative trend is the rise in price of goods against the background of the low purchasing power of Ukrainians.
According to JTI Ukraine, an average consumer in our country spends 21% of his daily income on cigarettes. For comparison, in the UK, a consumer spends only 15%.
Earlier it was reported that the next increase in excise taxes in Ukraine would increase the price of an average pack of cigarettes to 50 UAH.