Project Star. Joel Zernask KPMG Baltics OÜ Maksu- ja õigusteenuste valdkonna juht 21 mai 2013

Transcription

1 Project Star Joel Zernask KPMG Baltics OÜ Maksu- ja õigusteenuste valdkonna juht 21 mai 2013

2 EU 27 - Illegal Cigarettes Reached Record Levels in % of cigarette consumption 65.5 billion illegal cigarettes 12.5 billion tax loss 11% 1 9% 8% 65.5 BILLION ILLEGAL CIGARETTES 7% 6% Source: KPMG Project STAR 2012

3 EU 27 - Illegal Tobacco Hotspots in 2012 COUNTRY - 5% COUNTRY 5.1% - 1 COUNTRY 10.1% - 2 COUNTRY 2> FINLAND Highest percentage point increase in illicit trade in 2012 SWEDEN ESTONIA IRELAND DENMARK LATVIA LITHUANIA UK BELGIUM FRANCE HOLLAND GERMANY LUXEMBOURG CZECH REP. POLAND SLOVAKIA AUSTRIA HUNGARY PORTUGAL ITALY SLOVENIA ROMANIA SPAIN BULGARIA GREECE Source: KPMG Project STAR 2012 MALTA CYPRUS

4 EU total consumption The Baltic countries had the highest non-domestic and C&C incidence as a proportion of total cigarette consumption Total cigarette consumption by type 2012 (1) Share of total consumption % 3% 1% 1% 1% 1% 9% 8% 1% 3% 1% 7% 3% 2% 1% 1% 3% 1% 5% 1% 31% 27% 2 19% 17% 16% 16% 16% 13% 13% 12% 11% 11% 1 9% 9% 8% 7% 7% 7% 4% 3% 2% 2% 2% 2% 1% 1 7% 5% 9% 3% 5% 66% 68% 75% 72% 77% 81% 83% 86% 86% 87% 77% 8 79% 82% 89% 88% 91% 85% 9 91% 95% 97% 96% 94% 97% 98% 93% -4% -12% -13% -1% -1% -1% -3% -1% -2% -24% -14% -1% -2% -2% -5% -7% -1% -13% -8% -31% -14% -8% -17% -2% -37% >-10-4% Latvia Lithuania Estonia Ireland Finland UK Bulgaria France Greece Poland Malta Germany Netherlands Austria Romania Sweden Italy Belgium Spain Slovenia Hungary Portugal Cyprus Denmark Czech Republic Luxembourg Slovakia Outflows C&C ND(L) LDC Source: (1) KPMG analysis based on, LDS and ND(L) research 2013 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 14

5 EU 27 - The Presence of Illicit Whites in the EU % of C&C consumption FINLAND LATVIA IRELAND LITHUANIA SWEDEN ESTONIA RUSSIA FRANCE POLAND CZECH REP. SLOVAKIA SLOVENIA GREECE IRELAND UK BELGIUM FRANCE LATVIA DENMARK LITHUANIA KALININGRAD HOLLAND GERMANY LUXEMBOURG CZECH REP. POLAND SLOVAKIA AUSTRIA HUNGARY BELARUS PORTUGAL ITALY SLOVENIA ROMANIA SPAIN BULGARIA GREECE UAE CYPRUS MALTA Source: KPMG Project STAR 2012 C&C: Counterfeit & Contraband Illicit Whites: Cigarettes that are manufactured for the sole purpose of being smuggled into and sold illegally in another country COUNTRY COUNTRY COUNTRY The presence of illicit whites in the EU Strong growth markets for illicit whites in 2012 (>3) Main source countries of illicit whites 16.0 BILLION ILLICIT WHITES IN THE EU 24.3% of C&C consumption

6 Executive summary Project Star 2012 headlines Although manufactured cigarette consumption declined in the EU in 2012, C&C and ND(L) increased Prices continued to rise within the EU, whilst Eastern border countries remained significantly cheaper OTP sales continued to increase, growing by 6.8% from 2011 to 2012 Growth in Illicit White brands has predominantly been driven by emerging brands originating in Belarus Cigarette consumption declined by 5.7% to 593 billion cigarettes in the EU 27 Germany and Italy were the largest consumption markets at 103 billion and 86 billion cigarettes respectively The six largest consumption markets in the EU 27 represented over 69% of total consumption C&C and ND(L) both increased in 2012, both in absolute terms and as a proportion of consumption C&C increased by 0.4% in 2012 to 65.5 billion cigarettes and grew by 0.7 percentage points as a proportion of total consumption. If these cigarettes had been sold legally in the countries where they were identified, the tax revenue would have been worth approximately 12.5 billion ND(L) increased in 2012 for the first time since the study was initiated, by 6.5% to 24.8 billion cigarettes and grew by 0.5 percentage points as a proportion of total consumption There continues to be a wide range of prices across the EU 27 countries, although prices generally increased across the majority of markets Prices increased in Euro terms in 24 of the 27 Member States in 2012, with increases of over 5% in 13 countries The price of a pack of Marlboro varies widely across the EU, from 2.61 in Bulgaria to 9.54 in the UK; the UK experienced the biggest growth in C&C in 2012 across the EU 27 at 6.4 percentage points Prices in non-eu countries at the Eastern borders remain significantly lower; the price of a pack of premium brand cigarettes in the major source countries of Belarus, Russia and Ukraine are 1.08, 1.71 and 1.31 respectively Legal domestic sales of OTP have increased every year since 2008, offsetting some of the decline in manufactured cigarette consumption Legal domestic sales of OTP have grown at an annual growth rate of 11.4% from 2008 to 2012, reaching 145 billion cigarette equivalents, whilst legal domestic sales of manufactured cigarettes declined at an annual growth rate of 4.8% over the same period, to 540 billion sticks Price gaps between OTP and manufactured cigarettes continue to grow and range from 1.05 in Greece to 4.23 in the UK OTP represents the largest share of tobacco consumption in the Benelux markets Consumption of Illicit White brands increased by 3% to 16 billion sticks in 2012, representing over 24% of total C&C volumes in the EU The share of the three major established Illicit White brands of Classic, Jin Ling and American Legend has fallen as a proportion of total Illicit White sales, from 76% in 2009 to 33% in 2012, as the emerging Illicit White brands have gained share The largest source country for emerging Illicit White brands in 2012 was Belarus 2013 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 5

7 Estonia

8 Estonia Consumption summary Overall consumption of manufactured cigarettes increased by 2% due to an increase in nondomestic flows, largely from Russia (1)(2)(3) Total Estonia consumption Billion cigarettes Change 11/12 % Legal domestic sales (LDS) (3)% Outflows Legal domestic consumption (LDC) (5)% Non-domestic legal (ND(L)) % Counterfeit and contraband (C&C) % Total non-domestic % C t f it d t b d (C&C) % of ND(L) within the country (4) Total consumption % The increase in total consumption is likely to have occurred as a result of higher tourist numbers travelling from Russia to Estonia taking their own cigarettes, along with more Estonian tourists travelling to Russia The 5% fall in legal domestic consumption has been offset by a 32% increase in non-domestic consumption There appears to have been a significant increase in the number of Russian visitors on shopping trips, which has had a significant impact on the total level of ND(L) within the country (4) The OTP market is small and therefore is likely to have a negligible impact on overall consumption Share of Estonia cigarette consumption by type Estonia total manufactured consumption (bn sticks) (1)(2) (1)(2) % 6.4% 74.4% % % 1.5% 21.8% 16.7% 17.5% 19.7% 2.8% 1.9% 4.8% 5.4% 86.9% 91.5% 73.4% 80.6% 80.6% 74.8% -23.3% -20.3% -15.8% -11.7% -12.5% -13.5% C&C Outflows ND(L) LDC Volum e (bn cigarettes) LDS ND -4 Sources: (1) KPMG EU Flows Model (2) Synovate/Ipsos ND(L) research (Ipsos acquired Synovate in 2011) (3) LDS/IMS data provided by PMI (4) Interview with PMI local management KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 13

9 Estonia Country flows summary The Estonian market experienced 26% rise in inflows from Russia, its main non-domestic source market, and a small increase in outflows to Finland Key inflows and outflows (billion sticks) (1)(2)(a) Estonia Main inflow country Main outflow country Inflows to Estonia Change Billion cigarettes 11/12 Russia % Belarus % Other countries % Total inflows % Outflows from Estonia 0.21 billion sticks Billion cigarettes Change 11/12 % Finland % Other countries % Total outflows billion sticks Inflows to Estonia have increased from its main source country Russia, as well as rise in inflows from Belarus Russian inflows have increased as a result of a growing number of tourists travelling between each country Tourist flows from Russia increased by 49% in 2012 as Russians take advantage of the choice of shops in Estonia, whilst tourists from Estonia to Russia have increased at an average of 47% in the past three years (3) Belarus inflows have increased, a pattern seen by many countries within the EU, as illicit cigarettes are increasingly transported through this channel Outflows to Finland increased by 4%, as a result of increased tourist flows from Finland to Estonia Notes: (a) Map shows flows over 1% of consumption, or top flow if none are greater than 1% of consumption. Countries which are both source and destination countries are coded according to the larger flow Sources: (1) KPMG EU Flows Model and interviews with PMI Local Management (2) Synovate/Ipsos ND(L) research (Ipsos acquired Synovate in 2011) (3) Statistics Estonia, Inbound and outbound tourist trips, February KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 14

10 Estonia Comparison of external sources for non-domestic estimates Non-domestic incidence rose in Estonia by 5.8 percentage points in 2012, from 19.4% to 25.2% Non-domestic market estimates The EU flows model calculates non-domestic incidence by inputting the (1)(2)(a) empty pack surveys results from each quarter total consumption Share of t 3 25% 2 15% 1 5% 25.7% 13.1% 8.5% 26.6% 19.4% 19.4% 25.2% For Estonia, each quarterly wave is weighted equally, as there were no inconsistencies or specific issues or events that may have distorted a quarterly result Each pack collected was weighted in order to obtain a sample representative of the population of each town sampled No additional re-weighting or analysis was undertaken EU Flows EU Flows EU Flows EU Flows EU Flows EU Flows EU Flows Model Model Model Model Model Model Model Other non-domestic market estimates (2)(a) f total consumption Share of 3 25% 2 15% 1 5% 25.7% 13.1% 8.5% 26.6% 6% 19.4% 17.1% 21.4% 19.7% 25.3% 25. Q Q Q Q Q Q Q Q Q Q Sources: (1) KPMG EU Flows Model (2) PMI Empty Pack Surveys Notes: (a) Non-domestic incidence for the 2012 and EU flows model results has been calculated on a sticks basis. For more detail please see Appendix [x] KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 15

11 Estonia C&C summary The majority of C&C continues to come from Russia, however C&C inflows from Belarus are increasing, as illicit supply chains appear to be growing g from Belarus across the EU Total inflows of C&C (1)(2)(a) Volume (bn cigarettes) Share of C&C by origin Share of C&C by brand (1)(2)(a) (1)(2)(a) % 2.3% 06% 0.6% 03% 04% 0.7% 2.9% 0.3% 0.4% % 4.3% 0.8% 6.3% 10.3% 9.4% 8.5% 1.4% 13.4% PMI counterfeit % 6 Other countries % 93.4% 95.7% 87.6% % 76.8% Belarus % Russia % 38.8% % 27.4% 30.2% 34.2% 5.5% 5.6% % 6.8% 6.7% % 37.1% % 37.2% 11.8% 20.8% 2.3% 6.2% 0.2% 20.7% 22.8% 30.5% 9.4% 0.3% 3.8% 0.4% 0.6% 8.8% 4.7% 12.9% 7.2% 6.2% 5.2% % 0.7% 1.7% Other Non-PMI Kiss More PMI counterfeit PMI contraband L&M Next Notes: (a) KPMG calculates the split between C&C and ND(L) by analysing consumer research which records the volume and brands purchased legally from other countries. Sources: (1) KPMG EU Flows Model and interviews with PMI Local Management (2) Synovate/Ipsos ND(L) research (Ipsos acquired Synovate in 2011) 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 16

12 Estonia ND(L) summary ND(L) continued to increase from Russia, as inbound and outbound tourist flows increased by over 5 in 2012 Total inflows of ND(L) (1)(2)(a) Volume (b bn cigarettes) Share of ND(L) by origin (1)(2)(a) Share ND(L) by brand (1)(2)(a) % 8.1% 2.4% 17.4% 4.3% 16.6% 23.6% 2.9% 2.4% 3.6% % 29.6% 39.6% 8.9% 9.8% % 43.2% 6.4% 9.9% 9.2% 19.7% 2.3% 1.4% 2.8% 45.1% 80.2% 46% % 12.6% 53.9% 2.2% % % 8.4% Other countries Latvia Lithuania Finland Duty Free Russia % 40.4% 35.4% 33.6% 53.5% % % 3.5% 0.3% 1.3% 1.2% 1.2% 0.4% 0.7% 26.6% 31.4% 32.6% 2.1% 1.4% 31.4% 0.8% 07% 0.7% 36.9% 21.9% 11.3% 15.5% 20.4% 24.8% 16.7% % 15.2% 17.8% 1.5% % 11.1% 0.3% Other Non-PMI Ld Camel Other PMI Marlboro Bond Street Notes: (a) KPMG calculates l the split between C&C and ND(L) by analysing consumer research which h records the volume and brands purchased legally from other countries. Sources: (1) KPMG EU Flows Model and interviews with PMI Local Management (2) Synovate/Ipsos ND(L) research (Ipsos acquired Synovate in 2011) 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 17

13 Aitäh! Joel Zernask

14 2013 KPMG Baltics OÜ, an Estonian company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International Cooperative (KPMG International).