Belgium is producing more and more counterfeit cigarettes, of which a large proportion of them are sold illegally in France, an annual study by KPMG found.
In 2018, seven illegal cigarette factories were broken up in the Benelux, and by 2021 this figure increased to 17. This year, several illegal factories have been shut down.
"The number of illegal cigarette factories in Belgium is on an alarming rise," the study on behalf of cigarette manufacturer Philip Morris International read. In these factories, illegal workers often work in degrading conditions.
In line with a decreasing number of illegal cigarette factories in countries like Poland, criminal gangs are moving their activities to Belgium, which is becoming known as a transit country for the illegal cigarette market.
Overall, illicit consumption of cigarettes in EU countries increased by 3.9% or 1.3 billion cigarettes in 2021, continuing the growth seen in 2020. If these cigarettes had been legally purchased in the countries in which they were identified, an additional €10.4 billion in taxes would have been raised in the bloc.
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While Germany and Poland reached the lowest levels of illicit consumption, an increase was recorded in the EU due to the growth of illicit consumption in France and the Netherlands.
Proximity to markets and ports
One of the reasons, says the report, is that criminal gangs want to operate closer to the markets in France and the United Kingdom. The proximity of large-scale ports of Rotterdam and Antwerp also plays a role.
Many of the counterfeit cigarettes in France were produced in Belgian factories. The worrying evolution in France, where the consumption of illegal cigarettes boomed due to high market prices, is thus leading to increasing organised crime in Belgium.
But there is also good news: in Belgium, the consumption of counterfeit cigarettes is declining, to just under 5% of the total number of illicit cigarettes that have been seized. Although the state coffers lost €100 million in 2021 as a result of this illicit market business, the figure was much higher in 2020.
