The volume of counterfeit and contraband cigarettes in Estonia decreased 21% in 2017, while legal cross-border trade has increased 35% on year, it appears from a study conducted by KPMG for the Royal United Services Institute for Defence and Security Studies (RUSI).
The study named strong border control and the work of security authorities as the reasons for the decrease. It also noted that compared to 2013, the contraband market has decreased by half in Estonia, down from 350 million to 180 million cigarettes. Regardles, approximately €26 million is left unpaid into the Estonian state budget annually due to the contraband market, it appears from the study.
Altogether 77% of counterfeit and contraband cigarettes that reach Estonia originate from Russia and Belarus. The best known brands that cross the borders from Russia and Belarus are Bayron and NZ.
Although the volumes of counterfeit and contraband cigarettes continue to decrease, legal cross-border trade from which the state does not receive tax income has increased by 35% compared to 2016. Compared to last year, for example, the number of cigarettes brought from Latvia has seen an approximately twofold increase.
Cigarettes are taken from Estonian primarily to Finland, the volumes of which have remained relatively stable in recent years, amounting to 270 million cigarettes per year. Cigarettes from Estonia and Russia make up 46% of the Finnish contraband cigarette market.
Editor: Aili Vahtla