An almost 300% increase in counterfeit cigarette volume has driven a second consecutive annual rise in UK black market cigarette consumption, according to a KPMG report published today (June 8).

It estimates 16% of all cigarettes now consumed in the UK are either contraband or counterfeit. The overall volume of illegal cigarettes consumed in the UK during 2015 increased by over 6% to reach 6.7bn cigarettes. This is the second highest increase in volume across the whole of the EU.

In response to the report Paul Adeleke, from Philip Morris, said: “This illegal activity not only comes with a financial cost, but it fosters criminality in local communities.

“Philip Morris International continues to devote significant resources in combating this problem as it strongly believes that effective solutions require solid cooperation between governments, law enforcement agencies, manufacturers and retailers.”

The key findings in the KPMG Project Sun report for the UK in 2015 include:

• If the total black market volume had been consumed legally an additional tax revenue of €2.8bn would have been raised in the UK;

• Non-duty paid volume coming in to the UK from Romania has increased by nearly 400%;

• 78% of counterfeit products had duty free labelling;

• EU member states lost an estimated €11.3bn in tax revenues.

The four major tobacco manufacturers operating in the EU – BAT, Imperial Tobacco, JTI and PMI – jointly commissioned the report.