It’s just one of the many challenges facing EU and member countries as they grapple to clamp down on illicit tobacco networks, which cause at least €13 billion in lost revenue in the bloc annually. In 2023, almost one in 10 cigarettes in Europe was illegally produced or smuggled in.
The report also lands as EU countries’ attempts to find agreement on raising minimum tobacco and vape taxation levels have slowed after snus-loving Sweden — which is holding a general election next week — rebuffed a levy on nicotine pouches. The aim of the law is to harmonize prices across the bloc, strengthening the single market while nudging smokers to quit.
A lack of coordination and intelligence sharing between EU agencies and member countries’ authorities is hindering the bloc’s response to new cigarette factories, meaning “most alarmingly” the true size, structure and economic impact is unknown, Sarvamaa said.
To clamp down on this illegal activity, “it all starts with the Commission,” Sarvamaa said. “Better intelligence sharing between all relevant actors is essential.”
And the Commission needs to take a greater role in coordinating a strategic response of these actors, he added, including: the European Anti-Fraud Office OLAF, Europol, Eurojust and the European Public Prosecutor’s Office, EPPO.
The Commission broadly accepted ECA’s recommendations, bar areas it said were beyond its role. It pushed back on defining strategies for the various EU authorities, noting that OLAF and others are responsible for setting their own strategic priorities. And it said it was not possible to provide a robust approach to assessing the size and economic impact of illicit trade, since no single method could do this.
“The union cannot afford to lose this fight,” Sarvamaa warned, saying that public health, safeguarding the integrity of the single market and preventing organized crime were all at risk.
But he stopped short of recommending how Europe should proceed with its overhaul of tobacco products and excise legislation, saying this was a role for policy and lawmakers.