Tax Revenues Up in Smoke: Trade in Smuggled Cigarettes Booms in Germany

The eighth most popular brand in Germany are contraband Jin Ling cigarettes smuggled in from Eastern Europe. Researchers reached that conclusion after analyzing thousands of cigarette packs sorted at central garbage collection points.

A brand of cigarettes which is not legally available in Germany has now become one of the most popular smokes in the country, SPIEGEL has learned.

Experts believe that the Jin Ling brand, which is smuggled in from Eastern Europe, is now the eighth most-smoked cigarette in Germany. In Berlin, it is even the second most popular brand.

The brand is produced in the Russian enclave of Kaliningrad and Ukraine, ostensibly for the Eastern European market. But less than 1 percent of production is sold there. Instead the majority of Jin Ling cigarettes are smuggled into the European Union, mainly to Germany and the United Kingdom. Dealers working for smuggling gangs sell the bootleg cigarettes at locations such as subway stations.

And the smuggling business appears to be booming, even while legal sales of cigarettes in Germany are on the decline. According to figures from the German Cigarette Association (DZV), 22.5 billion untaxed cigarettes were smoked in Germany in 2008, of which around two-thirds were smuggled, compared to the 88 billion cigarettes which were legally purchased and smoked. The trade in smuggled cigarettes cost the German government €4 billion ($5.3 billion) in lost tax revenues, DZV estimates.

The figures were calculated by the market research institute Ispos, which carries out unusual research on behalf of DZV. Every month since 2004, the institute has collected some 12,000 discarded cigarette packs from 24 central garbage collection points for analysis.

According to a 2008 investigation by the International Consortium of Investigative Journalists into cigarette smuggling, the illegal trade in Jin Ling cigarettes is worth at least $1 billion per year.

dgs -- spiegel

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