Lithuania's illicit tobacco market remains among biggest in Europe

The market of illegal cigarettes in Lithuania has further expanded over the past year and remains among the biggest in the European Union, according to the latest study by the international audit, tax and consulting company KPMG.

Lithuania came 2nd in the EU and the country's budget lost 68 million in potential revenue last year, up 2 million from 2018.

The situation in other Baltic states is improving, the survey shows as the illegal tobacco market in Latvia and Estonia shrank last year.

Illicit cigarettes last year accounted for 17.7 percent of Lithuania's total tobacco product market, compared to 14 percent in Latvia and 7 percent in Estonia. Only the illegal tobacco market was only bigger in Greece, accounting for 22 percent of the total.

KPMG's empty pack and sales survey shows the total number of cigarettes smoked in Lithuania inched down slightly last year but as many as 540 million illegal cigarettes were consumed, up 0.04 percent, or 0.2 million units, from 2018.

The shadow tobacco market in Estonia shrank 2.1 percent last year and contracted as much as 5.4 percent in Latvia.

Around 80 percent of cigarettes imported to Lithuanian came from neighboring Belarus.