Politique Internationale — Last year, your firm published an indepth study on cigarette smuggling and counterfeiting. What prompted this research?
Guéric Jacquet — This isn’t our first study on the subject—far from it. In the recent past, we’ve even published three studies. One aimed to quantify this parallel market; the second, to assess regional impact; and the third, finally, focused on the Philippines, an area of interest for more than one reason when examining these issues. These studies respond to a demand: one that comes jointly from cigarette manufacturers, distributors, and all the players in this ecosystem. They are seeking a precise overview of how these illegal phenomena are developing; the means—particularly technological ones—by which they are accelerating; and how they impact the daily lives of residents.
P. I. — When studying a black market, the same question immediately arises: how can we collect reliable data? In this case, how did you carry out the cigarette study?
G. J. — At EY, we are accustomed to working methods that allow us to tackle subjects shrouded in secrecy. We have developed tools and processes for this purpose. Before the cigarette black market, we had focused specifically on the conditions that foster the emergence of an illegal website.
Returning to tobacco, we used a triangulation approach, based on data collected along three main lines. The first of these: largescale surveys of smokers. The second: information gathered from tobacco retailers. Finally, extensive fieldwork, including mystery visits conducted in numerous locations. This groundwork covers areas well-known on the smuggling map, such as Montreuil (SeineSaint-Denis), Villeurbanne (Rhône), and Calais (Pas-de-Calais), as well as locations that are less immediately recognisable. We know that the proliferation of late-night convenience stores—40% of which sell contraband cigarettes—is a good indicator of the extent of smuggling. For example, there are now over a hundred such stores in Montpellier (Hérault department in Southern France), compared to just a dozen a few years ago.
P. I. — What are the key findings of your studies? To what extent is this parallel market a cause for concern?
G. J. — It’s quite simple. Smuggling and counterfeiting have skyrocketed to significant levels. To gauge the scale of the trend, it suffices to note that by 2025, no fewer than 38% of smokers in France purchased their cigarettes outside the licensed tobacco retailer network—the only legal channel; this proportion was just 23% in 2019. Three factors combine to fuel this trade: first, there are those who buy their cigarettes abroad, knowing they’re limited in principle to a single carton. This group accounts for 15% of the 38%. Next are those who buy products in large quantities abroad, for example in border areas (10%), a practice known as “ant smuggling.” Finally, there are those who regularly purchase contraband and counterfeit goods online or on the street (the remaining 13%). Ultimately, some 25 billion cigarettes are sold each year outside of any regulatory oversight; 25 billion that represent the equivalent of a daily shipment of 1,200 Clio cars whose trunks are packed full to the brim. The image speaks for itself.
P. I. — How can such a surge in smuggling be explained?
G. J. — The legislative and regulatory framework is one factor: in France, a pack of cigarettes is expensive, costing between 12 and 13 euros—in any case, much more than in other European countries. Price is a factor that fuels smuggling, but it is not the only one. In his analysis of smoking trends in France, pollster Jérôme Fourquet clearly explains how we have entered a“make-do economy”. The black market for cigarettes is one example of this landscape. Here again, a telling statistic: over the past 12 months, only one-third of French people say they bought their cigarettes at a tobacco shop. Finally, it must be emphasised that those who thrive in this market benefit from an extremely profitable environment: did you know that a counterfeit cigarette factory generates an ROI (return on investment) of nearly 80% just three months after it is set up? These are small workshops that are as easy to set up as they are to move. They are found, for example, in remote corners of industrial zones—a good way to go unnoticed.
Furthermore, those involved in this illegal market operate with relative impunity: the criminal response to cigarette trafficking is very weak, bearing no comparison to drug cases. It’s like two different worlds. Cigarettes are barely even officially mentioned in police reports. We were able to consult records that had been devoid of such cases for three years. What is actually happening? When they make a small seizure, police officers and/or gendarmes dispose of the product and do not initiate a procedure that would be tedious. In short, a cigarette trafficker usually gets off scot-free.
P. I. — To return briefly to the data, different figures are circulating regarding the parallel cigarette market. Does this mean there are several calculation methods? Do they all point to the scale of illicit trade?
G. J. — There are currently three calculation methods, all of which yield results showing an increase in illicit cigarette consumption, though to varying degrees. KPMG, for example, conducted a “cigarette pack collection” study involving the identification of whether empty cigarette packs found in a public space at a given time originated from legal or illicit purchases; its authors conclude that 49.4% of cigarettes smoked in 2024 were illicit. By comparing departmental consumption data with a particular focus on border areas, the Interministerial Mission for the Fight Against Drugs and Addictive Behaviors (Mildeca) estimates the “tax gap” at around 20% in lost revenue.
P. I. — Are public authorities, broadly speaking, aware of the scale of this trafficking?
G. J. — They are not surprised. They are all the less surprised given that law enforcement agencies have a very precise map of cigarette resale points. In the upper echelons of the government and in related agencies, the scale of the offenses is well known. It is likely only the Public Health Department that doubts the figures on trafficking. It is true that for doctors, the rise in tobacco product prices was initially seen as an incentive not to smoke—not as an encouragement to sell cigarettes under the table.
P. I. — You mention the weakness of the criminal justice response to the parallel cigarette market. Should this response be made more severe?
G. J. — That is one way forward. A judge once put it this way: “In a society where punishment has lost its meaning, we must restore meaning to punishment.” This takes on its full meaning in the fight against cigarette trafficking. That said, there are several other solutions to try to break out of this spiral. Increased awareness is an essential step: when 38% of people buy a product illegally, it means they consider this act perfectly normal—or nearly so.
Optimising intelligence is another avenue for progress: I mentioned well-informed mapping; it must be used to guide interventions, even when authorities are facing gangs that know how to compartmentalise their activities and do not diversify— which would make it easier to “track them back.”
Internet and technology in the broadest sense offer additional advances in combating this branch of organized crime. Finally, there is the regulatory aspect, which complements the legal framework: in this regard, mayors are on the front lines in attempting to deprive traffickers of the spaces they would like to control. Thus, the development of 24-hour convenience stores is an issue over which local officials can exert influence. We have been able to present these various solutions in our studies.
P. I. — So you are advocating a coordinated response above all else. Is there no other path besides these joint efforts?
G. J. — The response must be commensurate with a trafficking problem that is plaguing all regions in France. Take the Atlantic coast: some point to Nantes (Loire-Atlantique department) as one of the hubs of this parallel market, implying that the coastlines are quieter. But that is not the case at all: during the summer, it is the same traffickers who leave Nantes for a short while to develop lucrative businesses in the seaside resorts. Whether in city centres, neighbourhoods, or the countryside, no area can claim to be safe from these abuses.
P. I. — What are the impacts on these plagued areas?
G. J. — It is certain that cigarette trafficking causes economic difficulties for tobacco shops and the surrounding ecosystem of local businesses, even though tobacco shop owners have launched numerous initiatives to diversify their revenue streams (Nickel card, vaping, package handling, or processing fines for France’s Directorate General of Public Finances (DGFiP)…). 69% of the tobacconists we surveyed see a direct impact on their revenue. Unfortunately, the effects run deeper in terms of social impacts. In certain cities, particularly in the suburbs of major metropolitan areas or near metro stations, street vending creates a climate of insecurity and deterioration in living conditions for local residents. More and more local police authorities are now having to incorporate missions to monitor and crack down on this phenomenon.
P. I. — The international aspect is a key factor when discussing trafficking. This raises the question of whether there is a distinctly French aspect to this parallel cigarette market…
G. J. — Yes, there is a distinctly French aspect, compared to other European countries—where cigarette prices are significantly lower. But we also find commonalities with other regions around the world. We focused on the Philippines because it truly is a hub for cigarette smuggling, supplying a large part of the Asian continent. In the Philippines, 17% of the population buys cigarettes outside legal channels.
P. I. — Given the current development of a parallel market, what approach should cigarette manufacturers take?
G. J. — Tobacco companies, as they themselves say, are preparing for a smoke-free world—that is, a world where combustible products will eventually give way to nicotine-delivery products. Within these companies, research and development departments play a decisive role in this regard. It is difficult to discuss this trend in a one-sided manner, as regulations regarding alternative products vary from country to country. Some products permitted in one place may be banned elsewhere, and vice versa.
In any case, both government authorities and manufacturers hope to see a decline in a phenomenon that heavily penalises them: in France, the parallel cigarette market results in several billion euros in revenue and economic losses each year. The government is affected, as are manufacturers and tobacco retailers.
