Full Report [ENG]

Transcription

Full Report [ENG]

THE FACTBOOK ON THE
ILLICIT TRADE IN TOBACCO
PRODUCTS
Francesco Calderoni
Alberto Aziani
Serena Favarin
directed by: Ernesto U. Savona
4
POLAND
Poland
Francesco Calderoni
Alberto Aziani
Serena Favarin
Series: The Factbook on the Illicit Trade in Tobacco Products
Issue 4
Series editor: Ernesto U. Savona
Transcrime – Joint Research Centre on Transnational Crime
Università Cattolica del Sacro Cuore di Milano – Università degli Studi di Trento
Milan office (headquarters): Largo Gemelli, 1 – 20123 Milano (Italy)
Phone: +39 02 7234 3715 / 3716; Fax: +39 02 7234 3721
www.transcrime.it
2013
ISBN 978-88-8443-505-7
Suggested Citation: Calderoni Francesco, Alberto Aziani and Serena Favarin. Poland. The Factbook on the Illicit Trade in
Tobacco Products 4. Trento: Transcrime – Università degli Studi di Trento, 2013.
© 2013 Transcrime – Joint Research Centre on Transnational Crime
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form
or by any means electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the
author.
Credits: CNN International Deutschland Österreich Schweiz (cover), Francisco Manzano (picture p.21), David Berkowitz
(picture p.37), Piotr Drabik (picture p.51) creative commons license
Graphic project: Anna Maria Stefani, Andrea Pesoli and Damiano Salvetti – Transcrime
TABLE OF
CONTENTS
Transcrime
1
The factbook on the illicit trade in tobacco
products
3
Acknowledgments
5
Executive Summary
7
Introduction
Why focus on the ITTP in Poland?
What can be found in this report? Chapter 1: the five drivers Society and economy
Legal market
Regulation
Crime environment
Enforcement
Chapter 2: the four components
The demand
The supply
The products
Modus operandi and geographical distribution
Chapter 3: framing the components in the drivers
The four key factors of the ITTP
The demand for illicit tobacco and the drivers
The supply of illicit tobacco and the drivers
The products and the drivers
The modus operandi and geographical distribution of
the ITTP and the drivers
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17
18
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21
27
37
45
51
64
65
68
72
78
86
87
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90
93
94
Conclusions
97
References
101
TRANSCRIME
Transcrime is the Joint Research Centre on Transnational
The Centre also plays an important role in the support
Crime of Università Cattolica del Sacro Cuore of Milan
and development of educational activities at Università
and the University of Trento. The Centre, directed
Cattolica del Sacro Cuore of Milan. Its principal aim is to
by Ernesto U. Savona, Professor of Criminology at
achieve close integration between scientific innovation
Università Cattolica, represents the multiannual union
and academic education. In particular, since the academic
between experience and innovation in the field of
year 2005/06, Transcrime has managed a MA programme
criminological research.
dedicated to crime and security (until academic year
2012/13 the curriculum Crime&Tech: Crime Sciences
and Technologies for Security within the MA in Applied
office, there is a team of researchers and secretariat/
Social Sciences; since the 2013/14 academic year
management personnel. Transcrime aims at being
Curriculum POLISI: Policies for security within the MA in
a national and international point of reference in the
Public Policy). In addition, the Centre has contributed to
criminological research panorama.
the development of the International Ph.D. programme
in Criminology, coordinated by Professor Savona,
The vision of the Centre is to increase knowledge in
which is currently the only doctoral course dedicated to
the criminological field and in the prevention of crimes,
Criminology in Italy.
developing innovative ideas and cutting-edge techniques.
Transcrime is an independent academic centre. It
Transcrime combines its experience in applied research
pursues an autonomous research agenda, which may be
with the consolidated scientific tradition of Università
developed also through contracts and funding by private
Cattolica del Sacro Cuore in Milan and University
and public local, national and international institutions.
of Trento, mixing a practice-oriented approach with
The source of funding is always made public through
a profound understanding of criminal phenomena.
Transcrime’s website.
Through this experience, it developed a solid network
international organisations and businesses.
Official web site: www.transcrime.it
POLAND
of relationships in the academic field, institutions,
1
The factbook on the illicit trade in tobacco products
There are offices in Milan and in Trento. In each
2
THE
FACTBOOK
ON THE
ILLICIT TRADE
IN TOBACCO
PRODUCTS
This report provides the Polish country profile of the
The Factbook will contribute to raising awareness
project the Factbook on the Illicit Trade in Tobacco
about the global importance of the ITTP and about
Products (henceforth ITTP).
the strategies available to prevent it. The Factbook
has been developed for a wide readership ranging
The project has been developed by Transcrime after
from policymakers, through academics, to interested
the Round Table on Proofing EU Regulation against the
stakeholders, the intention being provide a support to
Illicit Trade in Tobacco Products hosted by Università
develop knowledge-based debates and policies on
Cattolica of Milan, on 5 May 2011. During the Round
the ITTP.
Table, participants (researchers and policymakers with
The information gathered for this report originates
products) agreed on a research agenda concerning the
from academic literature, grey literature, open sources,
ITTP (Transcrime 2011b). Items 3 and 6 of the research
questionnaires and interviews with experts and
agenda focused on the need for better analysis of the
stakeholders.
tobacco market taking account of its dual nature (i.e.
legal and illicit) and on how licit and illicit markets vary
The results of the report do not claim to be exhaustive,
across different countries and regions. Given these
nor an accurate reflection of criminal practices. They
considerations, Transcrime has developed the Factbook
provide an initial assessment of the ITTP in Poland and a
on the ITTP, a multi-annual research plan providing
starting point for future research.
detailed analyses of the ITTP and of its relations with
the legal market and other socio-economic and political
As a concerned stakeholder in the fight against the illicit
factors in a number of countries around the world.
trade in tobacco products, Philip Morris International
(PMI) welcomed Transcrime’s initiative to develop the
Factbook on the ITTP with financial support and the
instrument able to shed light on the complex
provision of data. However, Transcrime retained full
mechanisms behind the ITTP in different countries.
control and stands guarantor for the independence of
This report focuses on Poland.
the research and its results. Information and data for the
study have been collected by Transcrime and have not
Tobacco consumption is undoubtedly a danger for human
health, and governments should carefully regulate the
tobacco market. Illicit tobacco avoids state regulation and
taxation and may jeopardise tobacco control policies.
been shared with PMI.
POLAND
The aim of the Factbook is to provide an innovative
experience in the field of the illicit trade in tobacco
3
4
ACKNOWLEDGEMENTS
Especial thanks go to Piotr Niemczyk, Niemczyk
& Partners Sp. z oo, Wolfgang Schmitz, German
Zollkriminalamt.
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POLAND
6
EXECUTIVE
SUMMARY
This report is part of the project The Factbook on the Illicit
Trade in Tobacco Products. It focuses on Poland, where
the illicit trade in tobacco products is an emerging issue.
The importance of the topic is due to the high and rising
penetration of the Polish tobacco market and to Poland’s
important role in the illicit traffic of tobacco products to
the EU. Increasing concerns about illicit tobacco have
spurred an increase in the fight against the ITTP and the
launching of the second national strategy in 2012.
This report is organised into three chapters:
•• Chapter one deals with the five drivers of the ITTP:
society and economy, the legal market, regulation, the
crime environment and enforcement. The drivers are
important areas whose structures may positively
or negatively impact on the ITTP. To enable
comparison with other country profiles, four key
indicators have been selected for each driver. The
data for the driver indicators come from comparable
sources (latest available years). When possible, the
sources.
•• Chapter two focuses on the four components of
the ITTP: demand, supply, products, modus operandi
and geographical distribution.
•• Chapter three identifies the key factors of the
ITTP in Poland and frames the drivers in the
components, analysing how different elements of the
drivers influence the components of the ITTP.
economic reforms have given Poland a solid and
growing economy. Poland average wealth remains
below the EU and OECD averages, also because of
economic disparities within the country.
•• Legal market: Poland is the main manufacturer of
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tobacco products in Europe and the third exporter in
the world. In 2009, the government deregulated and
reduced public support to the tobacco market. The
sector contracted and the availability of raw tobacco
and disused manufacturing equipment increased.
The industry is also changing and growing under the
influence of greater exports and higher importance
of multinational tobacco companies. With respect to
consumption, increasing prices drive down selling
volumes and induce smokers to switch to cheaper
products. Nevertheless, prevalence is high in general
and increasing among women.
•• Regulation: regulation of the tobacco market is
medium in Poland. Tax incidence on cigarettes is
among the highest in the world but the country invests
scant resources in tobacco control policies. There is a
medium-low level of supply chain control, a mediumhigh level of control on tobacco consumption, and a
medium level of control over sales, advertising and
promotion.
POLAND
report provides the most up-to-date data from national
•• Society and economy: twenty years of social and
WHAT CAN BE FOUND IN THIS
REPORT?
THE FIVE DRIVERS
Executive Summary
•• Crime environment: Poland has low crime levels,
•• Modus operandi and geographical distribution:
with medium-low corruption and a medium informal
smugglers mainly use motorways and railways
economy. However, numerous organised crime
connecting Poland and its eastern neighbours to
groups are active in the country. Drug prevalence
introduce cigarettes in the country. Smugglers aiming
is in general low; only the use of cannabis is rather
at other EU Member States pass through Poland to
widespread among young people. Synthetic drugs
Germany on highways. Counterfeiting relies on the
have become increasingly common.
availability of raw tobacco and cheap machinery.
The exploitation of the internet and of postal services
•• Enforcement: the effectiveness of Polish law
by the ITTP is increasingly common in Poland. The
enforcement is increasing. The fight against the
tobacco black market is much more widespread and is
ITTP has improved in recent years, due to a larger
rooted in the East of the country.
involvement of national agencies, international
cooperation and new equipment. The obligations on
tobacco manufacturers mainly derive from voluntary
agreements between the industry and the European
Commission.
THE FOUR COMPONENTS OF THE ITTP
FRAMING THE COMPONENTS IN THE
DRIVERS
The four key factors of the ITTP
The report identifies four key factors of the ITTP in
Poland. They are fundamental determinants of the
•• The demand: the low price of illicit tobacco is the
8
illicit trade and affect all its components. Hereafter, four
main driver of the demand for it. Avoiding taxes and
subsections analyse how the five drivers affect the key
buying tobacco products for less than half the legal
factors and in turn the components of the ITTP. The key
price increases the accessibility of these products and
factors are:
is an opportunity for tobacco consumers. In Poland,
consumers can find illicit tobacco products on the
streets, in open markets, and on the Internet.
•• Accessibility: the price of illicit tobacco, and
particularly its relative price compared to legal
products, is a crucial factor in determining the scope
•• The supply: profitability and opportunity are the
and prevalence of the ITTP.
main drivers of the supply of illicit tobacco and are
crucial factors for all the actors involved in the ITTP,
independently of their degree of organisation. In
•• Availability: the diffusion of illicit tobacco products
have an important impact on the ITTP.
Poland, organised groups and single smugglers are
involved in the supply chain of the ITTP. Proximity with
•• Profitability: the ITTP is an extremely profitable
the main source countries of cheap/illicit tobacco to
activity owing to the high income that it offers
the East and with rich markets to the West contributes
compared with its operational costs.
to making Poland both a key destination and a transit
country of illicit tobacco products.
•• Risk: the threat of detection/accusation/conviction
and the sanctions imposable impact on the diffusion of
•• The products: it is difficult to assess the extent of the
the ITTP.
ITTP in Poland owing to the lack of publicly available
official estimates of the illicit tobacco market. The
This study analyses the complex interactions among the
available data indicate that the impact of the ITTP
drivers, the key factors and the components of the ITTP.
is increasing and that its penetration in the tobacco
The following figures synthesise the main interactions,
market is above 13%. Illicit whites are the most
highlighting the multifaceted nature of the ITTP in Poland.
widespread product on the black market; contraband
cigarettes, counterfeits and unbranded raw tobacco
are also available.
Executive Summary
Figure 1. The interaction between the demand for illicit tobacco and the five drivers
negative effect
(increases the ITTP)
Source: Transcrime elaboration
society & economy
positive effect
(decreases the ITTP)
legal market
ACCESSIBILITY
illicit tobacco may enable
ACCESSIBILITY:
unemployed and lower-income
people, especially from Eastern
increases in the prices of
legal tobacco products may
Poland, to maintain their
smoking habits
stimulate the demand for
cheap and illicit tobacco
ACCESSIBILITY:
the wide price differential
between legal and illegal
products increases the relative
accessibility of illicit tobacco,
fuelling its demand
enforcement
AVAILABILITY:
RISK:
the increasing popularity of
HRT may open new markets
the lack of awareness
campaigns on the
for the ITTP
consequences of illicit tobacco
consumption prevents
reduction of the black market’s
clients
ACCESSIBILITY:
economic growth eases
the budget constraints of
households and may reduce
recourse to the ITTP
DEMAND FOR
ILLICIT TOBACCO
regulation
crime environment
ACCESSIBILITY:
high tax incidence on tobacco
products makes them less
accessible and may push
consumers towards illicit
products
the habit of consuming
smuggled and counterfeit
products regards the tobacco
market and contributes to
expanding the ITTP
AVAILABILITY:
AVAILABILITY:
the prohibition on the use
of vending machines to sell
tobacco products may create
an illicit demand when legal
retailers are closed
high and growing cannabis
prevalence among young Poles
may favour the expansion of
the ITTP by providing it with
distribution channels
THE DEMAND FOR ILLICIT TOBACCO
AND THE DRIVERS
Legal market. The continuous increases in tobacco
The main factors affecting the demand are the
favour the diffusion of cheaper and more accessible illicit
accessibility and the availability of illicit tobacco (Figure
1).
difficulties may favour the demand for illicit tobacco
due to its low price. The ITTP allows economically
disadvantaged groups to maintain their consumption
habits; this is particularly true in the eastern regions,
which have benefited less from the country’s important
economic growth.
made HRT and green leaves more attractive; it may also
tobacco products.
Regulation. Poland levies high taxation on cigarettes.
Increases in the tax level on legal tobacco augment the
relative accessibility of tax-free illicit tobacco. Moreover,
regulatory interventions like the prohibition of cigarette
vending machines and the planned ban on menthol and
slim cigarettes may involuntarily boost the illicit market.
POLAND
Society and economy. Unemployment and economic
prices have generated a downtrading trend, which has
9
ACCESSIBILITY:
Executive Summary
Figure 2. The interaction between the supply of illicit tobacco and the five drivers
negative effect
positive effect
legal market
enforcement
PROFITABILITY:
the low price of tobacco products
in neighbouring countries may
RISK:
the increasing detection rate
and prosecutions against OC
favour bootlegging
PROFITABILITY:
the strong devaluation of the
Belarusian Ruble may provide
incentives for the ITTP
society & economy
members may discourage
involvement in the ITTP
RISK:
the intensification of border
collaboration may increase the
risk of detection
AVAILABILITY:
the reforms of the tobacco
PROFITABILITY & RISK:
market result in a surplus of
raw tobacco and manufacturing
economic difficulties and
the social acceptance of
RISK:
low penalties for smuggling
make the ITTP attractive to
criminals
equipment which may flow into
illicit productions
smuggling provide incentives
for participating in the ITTP,
especially in eastern regions
RISK:
RISK:
networks decreases the risk of
detection for smugglers
regulation
10
regional differences in levels of
enforcement may contribute to
explaining the discrepancies in
the penetration of the ITTP
SUPPLY OF
ILLICIT TOBACCO
distribution via personal
crime environment
PROFITABILITY:
AVAILABILITY:
high taxation yields high profits
for the ITTP through tax
evasion
the presence of international
OC groups may facilitate the
organisation of large-scale
smuggling schemes
AVAILABILTY:
proximity to markets with a high
availability of illicit whites may
boost the ITTP
Crime environment. Smuggled and counterfeit products
enjoy a certain acceptance in Poland; this fact may favour
the expansion of the ITTP. Drug consumption is generally
low, but the growing popularity of cannabis among young
people may favour the expansion of the ITTP by providing
additional distribution channels.
Enforcement. There are no public policies to raise
awareness about the dangers of illicit tobacco in
Poland. This may prevent the reduction of black-market
consumers.
THE SUPPLY OF ILLICIT TOBACCO AND
THE DRIVERS
Profitability, availability and risk are important factors
for the supply of illicit tobacco (Figure 2).
Society and economy. Economic difficulties, lack of
legitimate jobs and the availability of alternative income
sources may foster participation in the ITTP. This may
be the case of eastern regions, where the ITTP is more
widespread. The distribution of illicit tobacco products
through personal channels may be a way to reduce the
risk of detection for smugglers and may increase the
incentives to engage in the traffic.
Executive Summary
Figure 3. The interaction between the products and the five drivers
negative effect
positive effect
enforcement
RISK:
poor law enforcement in
neighbouring countries
complicates anti-ITTP policies
RISK:
legal market
actions on specific types
of ITTP may shift criminals
towards other products (i.e.
unbranded loose tobacco,
counterfeits, illicit whites)
AVAILABILITY:
the lower prices of legal
cigarettes in eastern
neighbouring countries may
favour the smuggling of
genuine brands
AVAILABILITY:
large seizures of illicit tobacco
may decrease the short-term
availability of illicit tobacco
products
society & economy
AVAILABILITY:
proximity to the two main
RISK:
ILLICIT
TOBACCO
PRODUCTS
producing countries of illicit
whites may favour the diffusion
of this product
regulation
the implementation of the
Strategy 2012-2015 may make
the ITTP riskier
crime environment
AVAILABILITY:
AVAILABILITY:
the ban on the sale of tobacco
from vending machines may
increase the need of consumers
to resort to the black market
illicit flows across Poland may
simplify the entry of illicit tobacco
products
11
Legal market. The pricing and taxation policies of
Crime environment. The presence of criminal groups
neighbouring countries may have negative side effects on
may favour the development of sophisticated smuggling
the size of the Polish illicit market. The 2009 reform of the
schemes, which may also involve the use of bribery.
Polish tobacco industry and the economic crisis that hit
Poland borders on the countries where the majority of
Belarus may also increment the supply of illicit products.
European illicit whites are manufactured; this may boost
Liberalisation led to an increase in the availability of
their diffusion.
uncontrolled raw tobacco, while the devaluation of the
Enforcement. The effectiveness of Polish law
country cheaper.
enforcement is increasing, and this may discourage
smugglers despite the low level of penalties. International
Regulation. High tax levels expressed in monetary
cooperation and joint action plans against the ITTP play
terms yield high profits for the ITTP. On the one hand,
an important role in reducing the traffic.
smugglers exploit cross-border differentials between
tobacco taxation in Poland and that in neighbouring
THE PRODUCTS AND THE DRIVERS
countries; on the other hand, they evade taxes on
tobacco.
The main factors determining the development and
diffusion of different types of products are availability and
risk (Figure 3).
POLAND
Belarusian Ruble made cigarettes coming from that
Executive Summary
Figure 4. The interaction between the modus operandi and the geographical distribution of the ITTP and the five drivers
positive effect
negative effect
legal market
PROFITABILITY:
higher prices in Western Europe
may provide incentives to
transfer illicit tobacco products
to the EU
enforcement
RISK:
RISK:
actions foreseen by the
Strategy 2012-2015 may limit
the ITTP
regional differences in law
enforcement may lead to
dissimilar levels of the ITTP
Poland’s position between EU
and eastern countries may
stimulate the ITTP
RISK:
RISK:
weaknesses in border patrolling
by neighbouring countries may
internet and postal services may
function as new channels for
PROFITABILITY:
reduce the effectiveness of
enforcement activities at the
the distribution of illicit tobacco
products
borders
RISK:
society & economy
AVAILABILITY:
low prices of tobacco products
in eastern neighbouring
countries may encourage
bootlegging
RISK:
MODUS OPERANDI
and GEOGRAPHICAL
DISTRIBUTION
large seizures induce
smugglers to reduce and
subdivide their loads so that
they do not lose them entirely
in the case of detection
actions on specific types of
ITTP may direct criminals to
other tobacco products (i.e.
counterfeiting)
12
regulation
RISK:
the Schengen system may
facilitate smuggling to other EU
Member States
RISK:
Schengen may favour
transnational investigations, thus
increasing the risk of detection
crime environment
AVAILABILITY:
the presence of OC groups
may facilitate the organisation
of large-scale smuggling
RISK:
informal economy contexts
such as open markets make it
difficult to control the activities
of tobacco retailers
Society and economy. The diffusion of hand rolling
Regulation. Restrictions on the use of vending machines
tobacco (henceforth HRT) may enable smugglers to
may create opportunities for the selling of illicit products
expand the traffic of this product. HRT can be highly
especially when legal retailers are closed.
profitable, especially because of its low cost of production.
Legal market. The Russian Federation and Belarus are
may favour the establishment of illicit tobacco factories,
critical producers of illicit whites. Prices of cigarettes in
whose management requires organisation and capital.
eastern neighbouring countries are lower than in Poland.
Moreover, these groups are often involved in other
These differentials stimulate the ITTP.
illicit international traffics, which may provide them with
channels to bring foreign cigarettes into Poland.
Executive Summary
Enforcement. Increasing commitment to the fight
against the ITTP has resulted in growing numbers
of seizures and in the implementation of the second
national strategy against the ITTP. Nonetheless, law
enforcement on certain products may involuntarily
stimulate the development of other forms of ITTP, such as
the use of postal services and the illicit diffusion of loose
tobacco. Conversely, the lack of control over the ITTP
in neighbouring countries may facilitate the flow of illicit
products to Poland.
THE MODUS OPERANDI AND
GEOGRAPHICAL DISTRIBUTION AND
THE DRIVERS
Risk and profitability play a crucial role in influencing the
modus operandi and the geographical distribution of the
ITTP (Figure 4, p.12).
Society and economy. Poland’s geographical position,
close to countries with cheaper tobacco to the East and
the EU to the West, affects the distribution of the ITTP.
Polish regions close to the eastern borders have higher
levels of non-domestic packs.
Legal market. Higher prices of tobacco products in
smugglers to extend their activity into Western Europe.
Regulation. The effect of Schengen Agreement on the
ITTP is ambiguous. On the one hand, crossing borders
is easier and less risky. On the other hand, Schengen
Agreement has improved transnational collaboration
among law enforcement authorities, thus heightening
the risks of detection for criminals. The regulation of
the supply chain relies on agreements between leading
tobacco factories and European institutions and may
prove unable to prevent the ITTP. Reform of customs
laws may reduce individual smuggling.
may favour the development of complex smuggling
schemes involving even legal actors like customs officers.
Surveillance of contexts characterised by a widespread
informal economy is difficult and may increase
opportunities for smugglers.
Enforcement. More effective law enforcement may
induce smugglers to develop new systems to avoid
controls and to explore different illicit markets.
tobacco in Poland, and this makes it difficult to provide
a clear picture of the ITTP. Most unofficial estimates
concerning 2011 and 2012 consider the ITTP to account
for about 13% of the market. However, sources such as
Euromonitor International indicate a penetration of 24%.
Regional differences in the consumption of illicit cigarette
are substantial. The levels of non-domestic packs are
above 30% in the East of the country, while they decrease
moving westwards. Illicit whites are the most widespread
product consumed; but contraband cigarettes and
counterfeits are also available. Seizures suggest that
HRT is growing in importance. Nevertheless, there is no
current official estimate on its incidence in the market.
Smugglers exploit Poland’s proximity to countries with
low tobacco taxation and lax monitoring of the supply
chain to obtain cheap tobacco products that they later
traffic in Poland or move further to other EU markets.
Investigations indicate that organised crime groups also
engage in cigarette counterfeiting and manufacturing of
illicit tobacco products.
13
The present study demonstrates that more research
and accurate data would allow a better assessment of
the ITTP in Poland. Considering the limited number of
previous studies and the lack of data, the results of this
study are provisional. They offer a first analysis of the
ITTP in Poland and show that more research is needed in
this field.
The ITTP is a complex problem, not limited to an issue
of law enforcement and criminal justice policy alone.
In Poland, the ITTP seems to have increased over
recent years. The Government has reacted with various
measures. Nevertheless, despite the launch of a second
action plan in 2012, additional preventative measures,
such as national public awareness campaigns, are
necessary. Effective action against the ITTP requires
comprehensive strategies including criminal law,
administrative sanctions and other indirect measures
aimed at reducing crime opportunities.
POLAND
There are no official estimates of the prevalence of illicit
Germany, and in the EU in general, may push tobacco
CONCLUSIONS
Executive Summary
The evolution of the project has shown that countries have
very different situations in relation to the available data on
the ITTP. In some cases, the quality of the available data
is low and there are no official, regularly updated, data.
Inevitably, this may affect the quality and reliability of the
results. In these cases, institutions, businesses and other
stakeholders concerned with the ITTP should consider
how to improve the data collection on illicit tobacco. This
will result in an improvement in the knowledge of the ITTP
and, in turn, in better tobacco control policies, since quite
often the impact of specific policy measures upon crime
may be overlooked due to the lack of reliable data.
Following the completion of the first phase of the project
focused on collecting facts and data through the country
profiles, Transcrime will perform a comparative analysis of
the selected countries. This will provide additional insights
in the complexity of the ITTP and allow for the elaboration
of policy recommendations.
14
15
POLAND
Baltic Sea
LITHUANIA
RUSSIA
Gdynia
Koszalin
Pomorskie
Gdańsk
Elblag Warminsko-Mazurskie
Olsztyn
Zachodniopomorskie
Szczecin
Bialystok
Torun
Rzepin
GERMANY
Podlaskie
Kujawsko-Pomorskie
Poznan
Mazowieckie
Wielkopolskie
Warszawa
BELARUS
Lubuskie
Lódz
Lódz
Dolnoslaskie
Wroclaw
Opolskie
Opole
Lublin
Kielce
Swietokrzyskie
Slaskie
Katowice
CZECH REPUBLIC
Radom
Biala Podlaska
Lubelskie
Podkarpackie
Kraków
Malopolskie
Rzeszów
Przemysl
UKRAINE
SLOVAKIA
16
AUSTRIA
Location:
Poland, officially the
Republic of Poland, is a
Central European country.
It borders on Kaliningrad
Oblast (Russia) and
Lithuania to the North;
Ukraine, Belarus to the
East; Czech Republic and
Slovakia to the South;
Germany to the West.
Poland covers an area of
312,679 square kilometres.
Source: The World Bank
Population: 38,534,157 (2011)
Male: 18,573,464 (48.2%)
Female: 19,960,693 (51.8%)
Growth Annual Rate: 0.9 (2011)
Age Structure: (0-14) 14.7%; (15-64) 71.5%; (65+) 13.8%
Fertility Rate: 1.3 children born/woman (2011)
Life expectancy at birth (years): 76.7 (2011)
GDP: US$ 514,496,456,773 (2011)
GDP growth: 4.4% (2011)
Inflation consumer price: 4.2% (2011)
Income level: High
INTRODUCTION
WHY FOCUS ON THE ITTP IN POLAND?
First, Poland’s geographical position makes it an
important destination market for illicit tobacco products.
Poland is also an important country of origin and
transit for illicit tobacco flowing to the EU. Second, the
commitment of the country to fulfilling the EU parameters
and the consequent increases in taxation may have
augmented demand for cheap/illicit tobacco. Third,
eastern neighbouring countries have cheaper cigarettes
Despite the above factors, there are no official estimates
of the ITTP in Poland. In 2012, unofficial sources
estimated that the illicit market represented more than
13% of the Polish tobacco market, with wide differences
between the East and the West of the country.
Tobacco is a dual market consisting of a legal and an
illegal part (Figure 5). The two sides of the market are
connected with each other: actions affecting one side of
the market influence the other side as well.
Smuggling (or contraband): the unlawful movement
or transportation of tobacco products (genuine or
counterfeit) from one tax jurisdiction to another without
the payment of applicable taxes or in breach of laws
prohibiting their import or export (Joossens and Raw
2008).
17
Counterfeiting: the illegal manufacturing of a product
bearing or imitating a trademark without the owner’s
consent. Illegally manufactured products can be sold
in the source country or smuggled into another country
(Joossens and Raw 2008).
Bootlegging: the legal purchase of tobacco products in
a low-tax country and the illegal resale of these products
in a high-tax country. Bootlegging concerns individuals
or small groups who smuggle smaller quantities of
cigarettes, taking advantage of tax differentials, with the
aim of making extra income (Hornsby and Hobbs 2007).
Illegal manufacturing: cigarettes manufactured
for consumption, which are not declared to the tax
Figure 5. The dual tobacco market
be manufactured in approved factories or illegal covert
overlap in
demand
operations (Joossens et al. 2010).Unbranded tobacco:
manufactured, semi-manufactured and even loose leaves
illegal market
of tobacco (also known as “chop-chop” (Geis 2005)),
illegally sold by weight (e.g. in large plastic bags, also
known as “baggies”), with no labelling or health warnings
and consumed in roll-your-own cigarettes or in empty
cigarette tubes (Walsh, Paul, and Stojanovski 2006).
POLAND
authorities. These cigarettes are sold without tax and may
legal market
and lax controls on their tobacco supply chain.
The ITTP comprises different activities and products:
Introduction
Cheap Whites or Illicit Whites: cigarettes produced
A higher value on the composite indicators does not
legally in one country, but normally intended for smuggling
always imply a better situation. Their purpose is rather
into countries where there is no prior legal market for
to assess the intensity of policy measures in a specific
them. Taxes in production countries are normally paid,
field. The information used for the assessment is drawn
while they are avoided/evaded in destination countries
from the literature, official sources (reports, websites,
(Allen 2011a).
legislation) and experts.
In Poland, there are no official data on the prevalence,
Chapter 2 analyses the illicit trade in Poland, dividing it
demand for, and consumption of illicit products. This
into its four components of the ITTP:
entails that the actual dynamics of the illicit market and its
structure should be researched further. The main sources
used for this study have been international organisations’
reports, Customs research papers and seizures data,
KMPG and Euromonitor International data, empty pack
surveys commissioned by the tobacco industry and
recognised by OLAF and the European Commission
(henceforth EC), and media news. All non-official sources
are treated with caution in order to minimise the impact of
their possible bias.
WHAT CAN BE FOUND IN THIS REPORT?
This report is organised into three chapters.
18
Chapter 1 is composed of five subsections analysing the
five drivers of the ITTP:
1) society and economy
2) legal market
3) regulation
4) crime environment
5) enforcement
The drivers are important areas whose structures may
influence the ITTP positively or negatively. Transcrime
selected the drivers based on a review of the literature on
the ITTP and discussions with stakeholders and experts.
Each subsection provides information on the key aspects
of each driver.
To enable comparison with other country profiles,
each driver has four key indicators. The data for
the drivers’ indicators come from different sources to
ensure comparability among different countries to the
last available years (e.g. World Bank, WHO, UN). When
possible, the report provides the most up-to-date data
from national sources. For four indicators, Transcrime
has elaborated composite indicators (see Regulation and
Enforcement). Composite indicators assess the presence
of specific policy measures in the country and range from
0 (no measure is present) to 5 (all measures are present).
1) the demand
2) the supply
3) the products
4) the modus operandi and geographical distribution.
Chapter 3 combines the results of the two previous
chapters to identify the key factors behind the ITTP and
show how the various elements of the drivers influence
the illicit trade.
19
POLAND
20
THE FIVE
DRIVERS:
SOCIETY &
ECONOMY
S
ince the 1990s, Poland has implemented social and economic reforms to become a high-income
country with a large and diversified domestic economy. During the 2008-09 global financial crisis,
Poland was the only EU Member State that continued to grow. Nevertheless, national expenditure
on health and education is low and wide regional economic inequalities persist.
21
Society & Economy
Adult Population
85.3%
83.5 84.0 84.4 84.8 85.0 85.2 85.3
High %
0.35
27.7
0.31
15 out of 193 countries
Population aged 15+
(2011)
2002 2
mid-2000s late-2000s
2005 2006 2007 2008 2009 2010 2011
Low %
83.5 84.0 84.4 84.8 85.0 85.2 85.3
Income Inequality
3.7
0.31
3.0
2.9
0.312.8
83.5 84.0 84.4 84.8 85.0 85.2 85.3
Education
85.0 85.2 85.3
83.5 84.0 84.4 84.8System
22
Education expenditure
as 2006
% of2007
GDP
2005
2008 2009 2010
19.32005 2006 2007 2008 2009 2010 2011
18.0
14.0
9.7
8.3
7.2
3.1
3.0
Migration
2.9
9.7
9.8
2.17
3.0
3.1
0.35
2.9
9.7
8.3
7.2
3.7
2.16
2.9
69,907
63,097 59,205
19.3
56,393
2010
54,399
2011
8.3
2012
9.7 9.8
7.2
Unemployment
2007 2008 2009 2010
14.0
10.9
2008
716
95,358
2010 80,854
57,703 61,997
2012
93.8
10.9
9.7 86.42009
2006
8.3
7.2
2012
9.7
9.8
2011
51,102
2006
50,947
Low %
9.8%
High %
2007 2008 2009 2010 2011 2012
5834
2004 2005 2006 2007 2008 2009 2010
49 31
41
41
41
(2011)
93.8
5.0
4.6
106,291
86.4
5.3
5.5 71658.0*
2008
2010
200620092009
2011
Value
783
744
744
2012
10.9
93.8
2007 2008 2009 2010
2006
Rank
2012
51,102
2.72010
2012
2004
716
Low %
95,358
57,703 61,997
80,854
2007
1.1
49
2011
683
7
238
58
10.9
25.6
2007
2012
2010
63,097 59,205
56,393
1.4
1.354,399
1.3 58
2007 2008
2009
2010
2011
1.2
1.1 50,947
49
41
41
41
2004
2010
61,997
57,703
14.3%
Statistical Office 2013)
2006
2010
51,102 (Central
10.9
4.09
106,291
25.6 25.7 25.9 26.4 26.0 25.9 25.9
2005
95,358
1.5
2009 2010
264.0
2004 2
2.17
2009
86.4
2004 2005 2006 2007 2008 2009 2010
80,854
2008
69,907
2007 2008
High %
2011 2012
2004 2005 2006 2007 2008 2009 2010
106,291
3.02
2004
20082005 2006
20102007 2008 2009 2010 2011
63,097 59,205
56,393
2010
54,399
2002 2
25.6
264.0 263.7 259.6 257.5 263.3 258.7
250.4
2008 2009 2010
93.8
2.16
2006
(2010)
4.09
Last available data (March 2013):
10.9
2011
2004 20
Low %
2010
27.7
95,358
25.6 25.7 25.9 26.4 26.0 25.9 25.9
34
31
18.0
3.02
Source:
OECD
69,907
2002 2003 2004 2005 2006 2007
57,703 61,997
51,102
2007
51,102
63,097
59,205
2005 2006 2007 56,393
2008 54,399
2009 2010
50,947
2008
2010
34
31
2007 2008 2009 2010 2011
19.3
Total unemployment
2004 20054.09
2006 2007 2008 2009 2010 2011
rate (% of labour force)
0.31
57,703 61,997
69,907
20099.72010
2004 2
80,854
50,947
14.0
2010
2.17%
95,358
18.0
2007 2008
0.35
80,854
2009
2005
3.02
26.4 26.0
106,291
International migrant stock
3.7
2004 2005 2006 2007 2008 2009 2010 2011
as % of population
3.0
2.94.09 3.1
2.9
2.8
Source:
The World Bank
2005 2006 2007 2008 2009
264.0 26
High %
27.3 26.9
2009
2005
9.7
2.16
2.17 9.7 9.8
2009 20108.32011 2012
7.2
2006
27.5
25.6
2004 2005 2006 2007 2008 2009 2010
(2010)
2005 2006 2007 2008 2009 2010
69,907
63,097 59,205
56,393
54,399
50,947
34
19.3
31
18.0
2004 2005 2006 2007 2008 2009 2010 2011
2.17
2006
2005
2010
83.5 84.0 84.4 84.8 85.0 85.2 85.3
2007 2008
27.7
14.02007 2008 2009 2010 2011
2005 2006
2.8
264.0 263.7 259.6 257.5 263.3 258.7
250.4
31
2.9%
2004 2005 2006 2007 2008 2009 2010 2011
3.7
2002 2
Low
9.8
2
2004 2
2.9
2.8
0.31
2002 2003 2004 2005 2006 2007
2010
34
2.16
9.7
2.9
2.8
High
27.7
2005
14.0
3.7
3.1
264.0 2
26.4 26.0
0.31
(late 2000s)
2005 2006
2007 2008
2009 2010
mid-2000s
late-2000s
2005 2006 2007 2008 2009 2010 2011
19.3
18.0
2.9
27.3 26.9
Source: OECD
3.0
27.5
2.17
0.35
GINI coefficient after taxes
2005 2006 2007 2008 2009 2010 2011
27.7
2.16
0.35
3.1
2.9
106,291
24
2008
135
43
2009
Cigarettes
0.6
0.1 0.2
0.1
41
41
41
2007 2008 2009 2010 2011 2012
2010
2011
HRT
2007Tax
Tax
Chapter 1: The Five Drivers
•• Poland transited from a socialist to a market
• Poland had a Gini index of 0.342 in 2008 and
economy with a radical set of reforms in late 1989
ranked 89th out of 136 countries in income
and early 1990 (Keane and Prasad 2006).
inequality (CIA 2012).3 Among OECD countries,
Poland ranks 17th with an index equal to 0.310. People
• Poland was the first country in Central and Eastern
in the top quintile of the population have an average
Europe to re-establish a market economy. The
income of US$28,024 per year, whereas the bottom
goals of the first market reform package, called the
quintile lives on US$5,814 per year (OECD 2012f).
Balcerowicz Plan, were macroeconomic stabilisation,
Poland is the OECD country that most improved
price liberalisation and reductions of subsidies
its Gini index after taxes during the 2000s (OECD
(Wozniak 1998).
2012a). Inequality remained stable during the global
1
financial crisis (The World Bank 2012b; Bastagli,
• The country implemented liberalisation at a more rapid
Coady, and Gupta 2012).
pace than most of the other transition economies and
achieved the highest rate of GDP growth along with
• Poland has one of the greatest territorial
the smallest increase in inequality (Keane and Prasad
disparities in terms of GDP per capita in the OECD
2000; 2006).
and this gap has increased since the mid-1990s (see
Figure 6, p.24) (OECD 2010, 230).
•• Poland has successfully integrated into the
European Union since it joined it in 2004 (The
World Bank 2013).
• The process of accession to the EU prompted a
number of reforms in different areas to meet the
Copenhagen criteria.2 In 1991, Poland became an
EU candidate country. In 1997, EU membership talks
were launched and in 2004 Poland joined the EU
•• Poland is a highly developed country with a low
income-inequality.
• According to the Human Development Report, Poland
has a Human Development Index (HDI) of 0.813. This
value ranks Poland 39th in the world and indicates a
very high human development (UNDP 2011, 127).
• between eastern and western regions,
• between Warsaw and the rest of the country,
• between large urban areas and rural ones (OECD
2010, 230).
23
•• Poland was the only economy in the EU to avoid
a recession during the 2008-09 global financial
crisis (The World Bank 2012b).
• In 2009, Poland’s GDP grew by 1.6%, while it was
declining by 4.2% in the EU (Figure 7, p.24). Domestic
demand, an improved labour market, and increased
credit boosted economic expansion to almost 4.0%
in 2010 and 4.3% in 2011. GDP growth slowed to
around 2.5% in the second quarter of 2012 because
of persisting volatility and uncertainty in the external
environment. Both consumption and investment
weakened (The World Bank 2012b, 2).
•• Unemployment is the main economic concern of
• Since 2009, the unemployment rate has risen. In
2011, the unemployment rate was 9.8%; the ninth
1. For more information on the Balcerowicz Plan, see
Balcerowicz (1994).
2. The Copenhagen Criteria were set as the prerequisites for
accession to the EU in June 1993. These criteria, “Democracy,
the rule of law, human rights and respect for and protection of
minorities, the capacity to cope with competitive pressure and
market forces”, became the expressions most frequently used in
the progress reports prepared for the accession countries (İkizer
2012, 12).
among OECD countries (OECD 2012e). Data from
March 2013 indicate that unemployment rate is above
14.3% (GUS 2013).
3. Namibia ranks first and has highest income inequality, while
low inequality countries occupy the last positions in the ranking.
POLAND
Poles (TNS Opinion & Social 2012).
(Civitas 2011; Ministry of Foreign Affairs 2012).
• Three types of disparity persist:
Society & Economy
Figure 6. Average income and households below the poverty line per region, 2011
Source: Transcrime elaboration on Central Statistical Office of the Republic of Poland (2013) data
Pomeranian
Warmian–Masurian
West Pomeranian
Podlachian
Kuyavian–Pomeranian
Lubusz
Masovian
Greater Poland
Lodz
Lublin
Lower Silesian
Opole
Swietokrzyskie
Silesian
Subcarpathian
Lesser Poland
Households below the poverty line (%)
10.0% – 14.0%
900 – 1050
1031 – 1160
1161 – 1300
1301 – 1650
14.1% – 18.0%
24
Monthly average income in 2011 (PLN)
18.1% - 22.0%
22.1% - 26.0%
Figure 7. GDP growth and unemployment, Poland – EU comparison,
2003-2012
Source: Transcrime elaboration on The World Bank (2012a), Eurostat (2013), Central
Statistical Office of the Republic of Poland (2013) data
• Because of the crisis, the government’s deficit more
than doubled, from 3.6% of GDP in 2008 to 7.9%
22%
GDP in 2009 60
to 54.9% in 2010. However, in 2011 the
1,800
20%
government started
a fiscal consolidation (The World
55
1,650
18%
Bank 2012b, 2).
16%
Tobacco Expenditure
50
14%
1,500
45
• Today, corruption
and exposure of the judicial
12%
1,350
system to political
interference remain main
40
10%
1,200
8%
obstacles to more dynamic economic growth (Miller,
6%
Holmes, and Feulner 2012, 341). Until 2010, the
4%
30 general, the top prosecuting officer,
public procurator
900
was subordinated
to the minister of justice (Krajewski
25
750
2%
0%
-2%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-4%
2012).
35
20
00
01
02
03
04
05
06
07
08
09
1,050
10
11
• To protect the judicial system from direct political
-6%
Per capita tobacco expenditure
Poland Unemployment rate (%)
EU 27 Unemployment rate (%)
Poland GDP growth (annual %)
EU 27 GDP growth (annual %)
Note: Eurostat and GUS’s estimate of the 2012 GDP growth
rate.
inﬂuence, in 2010, reforms separated the posts of
Per capita final consumption expenditure
the minister of justice and the procurator general.
The new approach has been in force only for a short
time, but some aspects of the procuracy’s functioning
have already changed (Krajewski 2012, 79).
140,000
45%
120,000
40%
100,000
35%
80,000
600
Final consumption expenditure
in 2010. Public debt also increased, from 50.9% of
Table 1. Household tobacco expenditure by occupation, 2008
Source: Transcrime elaboration on Central Statistical Office of the Republic of Poland (2008) data
Total
Manual
labourers
Non-Manual
employees
Farmers
Self-employed
Retirees
Pensioners
Average per capita
expenditure:
total consumer goods
and services (PLN)
865.32
674.09
1,116.1
662.98
1,142.72
922.62
736.08
Average expenditure
on tobacco products
(PLN)
13.81
15.07
13.27
9.68
13.14
13.44
14.61
Incidence of tobacco
products (%)
1.60
2.20
1.20
1.50
1.10
1.50
2.00
•• Living standards are gradually converging to the
Figure 8. General household expenditure and household expenditure on
tobacco products, trends comparison, 2000-2011, PLN current value
European standards (The World Bank 2013).
• The average wealth level in Poland (US$8,101)
is less than one fourth 2005
of the OECD2006
average
18%
73,787,000
72,469,000
69,907,000
6.8
8.2
9.3
among EU Member States.4
14%
12%
Cigars (mn units)
• However, household expenditure has increased by
10%
41.4% from 2000 to 2010. ‘Housing expenditures’ and
8%
HRT (tonnes)
1,275.8
1,051.3
915.0
in particular ‘electricity, gas and other fuels’ are the
6%
4%
highest household outlays, representing 24% and 8%
2%
2010
2011
1,800
2012
1,650
63,096,600
50
59,205,400
56,393,400
54,398,800
50,946,900
1,500
45
10.3
40
11.6
13.1
14.2
1,350
15.3
1,200
35
1,421.9
2,068.9
2,898.5
2,753.6
1,050
1,789.9
of the total expenditure respectively (The World Bank
2003
2012a).
2005
2006 2007
2004
-4%
2008
2009
2010
2011
2012
30
900
25
750
20
00
01
02
• In the same period, expenditure on tobacco increased
-6%
by 68.6% in absolute terms (Figure 8) but remained
(%)
EU 27 Unemployment
rate (%)
YearPoland Unemployment
Unitrate
of Measurement
2000
2000
2001
quite constant around 3.0% of total household
June
International 2012a).
PLN per 1,000 cigarettes
22%
22%
37.50
42.00
50.00
52.00
45%
57.00
GDP
% of price
25.0%
40%
25.0%
Turkey
25.0%
25.0%
22%
25.0%
on tobacco products than wealthier households do.
2008
July
30%
January
and Weresa 2011a, 42). The higher incidence
25%
January
% of price
22%
22%
of tobacco
products is due
to both22%
lower total
expenditure and to higher expenditure on tobacco
(Table
1).
Ad valorem Tax
Area (Ha)
1991
600
1996
% of price
Cultivation (tonnes)
80.87
2001
91.00
2006
33.7%
91.00
2011
37.9%
Yield (Hg/Ha)
37.9%
Value
400
22%
22%
22%
64.00
64.00data).
68.38
75.12
(latest
available
The OECD
average
2009
covers
25.0%
28.5% of their
31.3%
allocated
a26.7%
lower share
GDPs to health
to health (Figure 9, p.26). The share of public
spending 22%
on health23%
is constant
22%
23%
22%
99.16
15%
at around
23% 72%, equal
to the OECD average. It was 90% at the beginning
20%
41.3%
2010
2012(Boulhol2013
98%
of the2011
population
et al. 2012, 8).
January January
January
•March
In 2011, January
Poland allocated
10.2% of its
public spending
of the
138.50
1990s
(OECD
2012f;
OECD 2012b;
146.83
158.36
170.97
188.0 Boulhol
100
90
80
70
60
50
40
30
20
10
2012,
remaining
28%
costs
97 et98al.99
00 8).
01 The
02 03
04 05 06
07 of08health
09 10
11 12
is covered
by privates
accounts for
4.14%
of
31.4%
31.4%
31.4% and
31.4%
31.4%
Male
Female
Total
households’ total expenditure (OECD 2012c).
4. The ranking has been compiled by Transcrime on Eurostat
Data 2013, taking 2011 data into account.
Supply chain control indicator
22%
in 2010 was 9.5%, and only Estonia, Mexico and
200935%
2008
employed workers (1.1%) (Ciecierski, Cherukupalli,
1986
11
POLAND
2007
January
Specific
Tax
0
10
(OECD 2012g). Nevertheless, public health insurance
tobacco than non-manual employees (1.2%) and self-
20,000
09
• Health spending accounted for 7.0% of 2010 Polish
(2.0%) spend a higher percentage of their incomes on
40,000
VAT
08
health system (WHO 2009).
22%
Lower-income households spend a larger share
Unit of Measurement
Month
60,000
07
January
May is January
January
••January
Insufficient
financing
the main problem
of the
January
Unskilled manual labourers (2.2%) and pensioners
Year
80,000
Tabela 2
January
tobacco has actually decreased (Euromonitor
100,000
06
expenditure
2004Per capita
2004final consumption
2005
2006
2003
22%
% of price
•
120,000
Ad valorem Tax
1981
October
between 2000 and 2010, the amount of purchased
Specific Tax
140,000
05
2012b). Since the price of tobacco has doubled
VAT
04
2002
expenditure (Euromonitor International 2012a; OECD
Month
03
25
0%
2.00
2009
Tobacco Expenditure
(US$36,238) (OECD 2012f) and the sixth lowest
Cigarettes (mn sticks)
16%
60
2008
55
2007
22%
20%
-2%
Source: Transcrime elaboration on The World Bank (2012a) and Euromonitor International
(2012a) data
100%
90%
Tobacco consumption
and sales indicator
Valu
Society & Economy
• The share of public spending on health is constant at
around 72%, equal to the OECD average. It was 90%
55
of health costs is covered by privates1,650
and accounts
50
for 4.14% of households’ total expenditure
1,500 (OECD
2012c).
45
1,350
Tobacco Expenditure
1,800
2012b; Boulhol et al. 2012, 8). The remaining 28%
• Life expectancy at birth is 76.3 years,1,200
3.5 years less
40
35
than the OECD average of 79.8 years.
Women are
1,050
30
expected to live 8.5 years more than men; among
900
OECD and key partner countries,5 only Estonia and
25
1.8%
2.3%
2.5%
Pensions and Retirement
1.3% 1.2%
00
01
Health
3.1%
03
04
05
06
07
08
09
10
Security and Justice
Social Assistance
National Defence
5.4%
Agriculture
9.9%
11.5%
(below OECD average of 5.8%). The country ranks
23 out of 31 OECD countries. World Bank data
rd
place Poland in 58th place out of 157 countries with
expenditure equal to 2.9% of GDP. In 2005, the
government allocated funds amounting to 5.5% of
GDP, which was above the OECD average of 5.2%
30%
(OECD 2012d, 269-271). Private funds account for
18.9% of educational costs, which is 0.6% higher than
25%
10.2%
Enviroment Protection
Culture and Media
11.5%
Sport and Tourism
Note: public pensions are the main public spending item and
account for the bulk of redistribution on the expenditure side
(Bastagli, Coady, and Gupta 2012).
• The Act on National and Ethnic Minorities and
Regional Language recognises the following
• Poland spent 5.1% of its GDP on education in 2009
35%
Transfers to local
administrations
Labor market
1,000 live births in 1960 to 5.0 deaths in 2010, and
2012f).
26
Debt
4.0%
11
•• Public spending on education is low (OECD
45%
Infrastructures
29.5%
3.8%
The infant mortality rate fell from 56.1600
deaths per
02
Other
Education and Sciences
750
6
Per capita
final OECD
consumption
expenditure
(OECD
2012f;
2012b).
minorities:7
• as national minorities – Belarusians, Czechs, Lithu-
100,000
90,000
80,000
anians, Germans, Armenians, Russians, Slovaks,
Ukrainians, Jews;
• as ethnic minorities – the Karaim, the Lemko, the
70,000
60,000
Roma, the Tartars (Ministry of the Interior 2007, 8).
50,000
•• Poland has a medium-low share of immigrants.
40,000
30,000
• There were 827,453 people born abroad in 2010
the OECD average (OECD 2012d, 258).
20,000
(2.2% of the population). Poland ranks 139th out
20%
•• School participation and student skills are
15%
2.0%
Russian Federation have a higher gender inequality.
thisPer
ranks
26th out of 34 OECD countries
capitaPoland
tobacco expenditure
40%
Source: Transcrime elaboration on Polish Government data collected by Bosak (2012)
at the beginning of the 1990s (OECD 2012f; OECD
60
20
Figure 9. Composition of 2011 total public spending
97
98
99
satisfactory (OECD 2012f).
00 01 02 03 04 05 06 07 08
Male
09
10
Female
11
12
Total
• Polish students score above the OECD average for
10,000
of 214 world countries (The World Bank 2012c).
0
Since
2006,
an 01
average
year
97 98
99 00
02 03 of
047,300
05 06persons
07 08 per
09 10
11
12
have applied for asylum, mostly from the Russian
Volume (mn sticks including HRT stick equivalent)
Value (mn PLN)
Federation and Georgia (UNHCR 2012).
reading literacy, maths and sciences. The Polish
educational system’s performances with respect to
100%
90%
80%
70%
60%
50%
40%
30%
gender and social inequalities are in line with those of
Since the end of the socialist system, Poland
the OECD countries (OECD 2012f).
has implemented social and economic reforms
•• Poland hosts several minorities.
• In Poland there are thirteen national and ethnic
minorities, totalling 253,273 people (2002 census)
(about 0.7% of the total population) (Ministry of the
Interior 2007, 9).
27.2%
North
and
become a high-income country. The
Polish economy, stimulated23.3%
by the reforms of
Southwest
the 1990s and by the EU accession process,
has grown
Northwest
26.5%
and diversified while
maintaining
a low inequality rate. Nevertheless, regional
21.3%
East
disparities
persist, unemployment is
problematic, and expenditure on health
and
31.3%
South
education is low.
20%
5. Brazil, China, India, Indonesia, Russian Federation, South
Africa.
6. The ranking has been compiled by Transcrime on OECD
0%
2002 2003
2004 Data
20052012,
2006 taking
2007 2008
2009available
2010 2011
Health
the latest
year2012
from 2008 to
2010
into
account.
Economy
Mid-Priced
Premium
10%
29.0%
Central
0%
10%
20%
30%
40%
50%
7. Act of 6 January 2005, Journal of Laws No 17, item 141, as
amended.
Total
Female
Male
THE FIVE
DRIVERS:
LEGAL
MARKET
P
oland is a major global player in the tobacco market. The industry is changing and expanding
under the influence of growing exports. As in most developed countries, tobacco consumption has
generally declined and the market has entered a downtrading trend, with smokers switching to
cheaper products. Nevertheless, smoking prevalence is still high, and increasing among women.
27
83.5 84.0 84.4 84.8 85.0 85.2 85.3
Legal Market
2005 2006 2007 2008 2009 2010
19.3
2005
0.35
0.31
2010
2004 2005 2006 2007 2008 2009 2010
18.0
Smokers
9.7
9.7
8.3
25.6 25.7 25.9 26.4 26.0 25.9 25.9
2005 2006 2007 2008 2009 2010 2011
34
31
14.0
31%
9.8
Current smoking of 7.2
any tobacco
product (age–standardised rate)
High %
Source: WHO–Country reports
3.7
2004 2005 2006 2007 2008 2009 2010 2011
83.5 84.0 84.4 84.8 85.0 85.2 85.3
3.0
3.1 2006
2.9
0.35
2009
2.8
(2009)
2.9
2.16
2004 2005 2006 2007 2008 2009 2010
2.17
27.7
27.5
27.3 26.9
26.4 26.0
0.31
83.5 84.0 84.4 84.8 85.0 85.2 85.3
95,358International 2012)
Last available63,097
data
(2011): Daily smokers
(18+) 29.8% (Euromonitor
59,205
2005 2006 2007 2008 2009 2010
2005
2010
56,393
54,399
2005 2006 2007 2008 2009 2010 2011
Affordability
3.0
50,947
57,703 61,997
51,102
19.3
% of annual
per 2009
capita
2007 2008
2010 income
2011 2012
needed to buy 100 packs of the
3.7
cheapest
cigarettes
3.1
19.3
28
Market Size
Low
105 out
34 of 168 countries
31
9.7
2.16
9.7
8.3
7.2
2.17
93.8
9.8
264.0 263.7 259.6 257.5 263.3 258.7
250.4
(2010)
86.4
2009 2.16
2006
2.9
2.8
2005
2010
2010
63,097 59,205
2006
56,393
2005
2006 2010
2007 2008 2009 2010
54,399
50,947
34
19.3 58
18.0
49
2009 201014.0
2011
2007 2008
95,358
2005
80,854 2010
2006
4.09 2008
41
2012
41
41
2007
2008 2009 2010
34
2009
Balance
of Trade
63,097 59,205
56,393
69,907
54,399
95,358
80,854
50,947
1.1
57,703 61,997
51,102
2008
2010
69,907
Source: Euromonitor International
2007 2008
2009 2010
2011
2007
2012
2011
2.7
93.8
Opioids
Cocaine
Cannabis
2007 2008 2009 2010 2011
2010
2006
2006
Source: WHO
51,102
49
2012
2010
41
2007
41
41
2008 2009 2010
2011Negative
2012
1.3
5.5
58.0*
783
744
71693.8 2011
2010
2012
86.4
Value
Rank
5.3
5.0
2009
1.3
2010
135
1.1
43
24
2010 2009
2008
1.1
Cigarettes
0.6
41
41
2010
HRT
0.1 0.2
0.1
Int.$, PPP
6.04 (Łęczek and Himmel 2012, International
Monetary Fund 2012)
2005 2006 2007 2008 2009 2010
2011
582012
2008
5.3
5.0
2009
10.9
5.5
2010
Value
2011
10.9
58.0*
Opioids
Cocaine
41
41
2011
Low
41
2012
176.6
4.6
2.7
49
Cannabis
Rank
2008
High
683
238
2.7
2006
2007
41
744
2008
1.2
2010
2008
5.0
2010
Tax % final retail price
Tax per 1,000 sticks/Int.$, PPP
57,703 61,997
58
(2010)
1.4
49
4.6
2008
106,291
95,3582008
Int.$, PPP 4.09
2010
10.9
Last available data (2013):
7
86.4
80,854
50,947
(2012)
58
10.9
Positive
93.8
2010
2008
4.09
3.02
1.5
141.7
2009
106,291
4.6
Price
of a pack of
2008
2010
the most sold brand
(Int.$, PPP)
HRT
86.4
2008
2011
176.6
2012
3.02
Price
Cigarettes
2012
2010
31
0.6
2009
86.4
2006
56,393
1.154,399
2012
0.1
2011
10.9
2011
2008
Small
93.8
2012
106,291
63,097 59,205
2005 2006 2007 2008 2009 2010
4.09
2010
2008 2009 2010 2011
0.1 0.2
10.9
135
2004 2005 2006 2007 2008 2009 2010
Value
Rank
2004 2005 2006 2007 2008 2009 2010 2011
3.02
Cigarette 1.5exports–imports
1.4
1.3
1.3
1.2
(mn sticks)
238
2007
(2012)
9.7 9.8
8.3
58.0*
5.3 7.2 5.5
5.0
4.6
2009
2010
683
Large
106,291
25.6 25.7 25.9 26.4 26.0 25.9 25.9
57,703 61,997
51,102
43
24
9.7
2004 2005 2006 2007 2008 2009 2010 2011
744
31
9.7 International
9.8
Source:9.7
Euromonitor
8.3
10.9
783
High
744
716
2004 2005 2006 2007 2008 2009 2010
50,947
69,907
Cigarette
retail volume
14.0
(mn sticks)
2008
2.17
2.1% (Euromonitor International 2012, International Monetary Fund 2012)
18.0
10.9
7.2
2002 2003 2004 2005 2006 2007
2.6%
3.7
2004 2005 2006 2007 2008 2009 2010
3.1 2011
3.0
2.9
2005 2006 2007 2008 2009 2010
2008
80,854
18.0
4.09
Last available data (2012):
0.31
20072009
20082010
2009 2010
20072006
2008
2011 2011
2012
14.0 2005
2.9
Source:
Tobacco2.8
Atlas2.9
3.02
Low %
0.35
106,291
69,907
5.3
141.7 5.5
200993.82010 2011
86.4
Value
Rank
58.0*
2012
POLISH TOBACCO MARKET
•• Poland is a net importer of raw tobacco.
•• Poland is a major exporter of finished tobacco
• Poland’s climate is not favourable to the
cultivation of tobacco. Farmers can set their
products.
cultivations in five regions of the South-East; these
regions are listed in the Regulations of the Minister
• In 2010, Poland exported 89.5 bn cigarettes. This
of Agriculture and Rural Development: Lubelsko-
figure makes Poland the third exporter of tobacco
podkarpackie, Świętokrzysko-małopolskie, Kujawsko-
products in the world after Germany and the
pomorskie, Mazurskie, Dolnośląskie (WHO 2009, 37;
Netherlands (Eriksen, Mackay, and Ross 2012, 55).
Ciecierski, Cherukupalli, and Weresa 2011b, i).
The value of Polish cigarette exports is US$1.58
bn (The News 2012).
8
• The political and economic transformation of the
early 1990s caused a decline in the tobacco crop
• Poland has a positive balance of trade. Indeed
tobacco exports exceed imports and the country ranks
second out of 209 countries in 2012 (Euromonitor
area, harvests and employment in tobacco cultivation
(Figure 11, p.30) (Ciecierski, Cherukupalli, and
Weresa 2011b, ii).
• Poland is the largest producer of finished tobacco
products in Europe (Niwserwis 2011, 6). Leading
international tobacco companies have relocated their
production facilities from Western Europe to Poland
• The entry of foreign multinationals into the domestic
industry imposed modernisation of the tobacco
production and improvements in the quality of raw
tobacco crops (Ciecierski, Cherukupalli, and Weresa
2011b, ii).
(Euromonitor International 2012b, 10).
• The implementation of Council Regulation (EC)
• The production of cigarettes increased by 90.3%
No 73/2009 of 19 January 20099 determined a
between 2003 and 2012 reaching 157 bn sticks.
deregulation of tobacco market and a reduction of
In the same period sales decreased by 29.3% but
113 bn in 2012 (Figure 10) (Euromonitor International
2013a).
(Ministry of the Interior 2012, 182). The deregulation
eliminated the national registry of contracts for the
purchase of raw tobacco and of tobacco wholesalers
and processing facilities (Ciecierski, Cherukupalli, and
Figure 10. Cigarette production, exports, imports and sales, 19992012, bn sticks
Weresa 2011a).
Source: Transcrime elaboration on Euromonitor International (2013a) data
180
• The value of Polish raw tobacco in 2010 was US$74.4
160
mn10 equal to 10.0% of the EU total (Pantini et al.
140
2012, 12). Owing to the low quality of domestic
120
tobacco, multinational manufacturers mostly rely
100
on imported tobacco. In 2010, for example, Poland
imported raw tobacco for US$112 bn (PLN333)11
80
40
20
0
00
01
02
03
04
05
Production
Exports
Imports
Sales
06
07
08
09
10
40%
12
Poland's access to the EU
8. Euro/US$ European Central Bank exchange rate on
31.12.2012.
45%
11
9. COUNCIL REGULATION (EC) No 73/2009 of 19 January
2009 establishing common rules for direct support schemes for
farmers under the common agricultural policy and establishing
certain support schemes for farmers, amending Regulations
(EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and
repealing Regulation (EC) No 1782/2003.
31.12.2010.
11. PLN/US$ European Central Bank exchange rate
on.31.12.2010.
POLAND
(Ciecierski, Cherukupalli, and Weresa 2011b, ii-vi).
60
government support to national tobacco cultivation
exports boomed: from 5 bn cigarettes in 2003 to
99
29
-4%
-6%
Poland Unemployment rate (%)
Legal
EU 27 Unemployment rate
(%) market
• Total turnover of the tobacco industry in 2009 was
Figure 11. Tobacco cultivation, 1981-2011
equal to € 5,180 mn.12 Poland ranked fourth in the EU
Source: Transcrime elaboration on FAO (2012) data
after Germany, UK and the Netherlands (Pantini et al.
140,000
45%
2012, 22).
120,000
40%
• Although per capita consumption of tobacco products
100,000
is declining,
in 2010 the top three tobacco companies
35%
altogether earned US$60.97 mn13 (Euromonitor
80,000
International
2012b).
30%
60,000
25%
• The value
of tobacco sales increased by 26.2% in the
40,000
period 2001-2012 because of the higher prices driven
20,000
20%
by increases in the taxation. This growth took place
0
Area (Ha)
1996
2001
2006
despite15%
the lower cigarette sales volumes (-31.2%
2011
97
tobacco farmers remained, with a ratio of
250
one full-time worker per plantation (Ciecierski,
200
Cherukupalli, and Weresa 2011b, ii).
0.75
150
0.50
100
• However, Polish farms have a low level of
Consequently, in addition to full-time50
0.00farmers, their families and seasonal workers take
0
97 to
98 the
99 00
01 02 03 Overall,
04 05 0675,100
07 08 09
10 11 were
12
part
cultivation.
people
60%
50% multinational companies lead the
•• The four main
40%
tobacco market
in Poland.
30%
20%Polska SA, Philip Morris International’s
• Philip Morris
(PMI) affiliate
10% in Poland. PMI is the largest tobacco
company in0%
the world. It has a market volume share of
Economy
Mid-Priced
in Lausanne, Switzerland.
PMI commercialises
Polish
VOLUME
RATIO (cigarette
volume/HRT
volume)
second
highest
in Europe
behind
Bulgaria
Euromonitor International).
15-19
••
The value of the Polish tobacco market is US$9
17.6%
• British American Tobacco Polska SA (BAT) is the
20.2%
University or higher
second largest tobacco company in the world. BAT
26.2%
Secondary
has its headquarter in the UK and sells its products in
31.7%
• In 2011, the value of the Polish tobacco market was
30-39
34.3%tobacco
US$8.92 bn. In the same year, the global
was worth US$780.70 bn. In volume terms,
40.0%
Poland has the nineteenth largest tobacco market in
world (Deloitte 2012; Euromonitor International
40.5%
Vocational
180 countries. In 2011, it had a market volume share
15.4%
10%
Female
20%
30%
Male
40%
Total
50%
39.1%
18.8%
Primary
of 13% of the global market and 27% of the Polish
23.0%
Students
one, holding second place.
BAT entered the Polish
Retired
17.0%
tobacco market in 1991
(sources: Company Annual
Unemployed
Report, Euromonitor International).
52.0%
27.0%
House persons
39.0%
Manual workers
32.0%
Other white collars
60+
Premium
in Poland (sources: Ash, Company Annual Report,
under cultivation of 1.19 ha (WHO 2009, 37).
2013a).
2012
and with a 37.9% volume share, it is market leader
• Tobacco farms are small, with an average area
20-29
2011
bestseller brands like L&M, Marlboro, Red & White,
(WHO 2009, 37; Pantini et al. 2012, 12-13).
0%
70%
al. 2012, 19).
2002 2003 2004 2005 2006 2007 2008 2009 2010
over 30% in 36
markets. The headquarters of PMI are
RATIO (cigarette
price/HRT
price)this value
involved in PRICE
the growing
process
in 2010;
50-59
the
countries, 80%
only Germany has higher figures (Pantini et
300
Volume Ratio
Price Ratio
of farmers had fallen to about 40,000. In 2006,
market
40-49
Total
90%
two and employed
6,548 people. Among the EU
Poland in the 1980s. By the late 1990s, the number
1.50
bn.
12
100%
industry. In
Poland, the industries numbered twenty-
•
350
1.75Approximately 70,000 farmers cultivated tobacco in
was the
Female
11
• In 2009, 251 enterprises formed the EU’s tobacco
400
0.25mechanisation.
10
in Poland.
and Weresa 2011b, ii).
2.00
1.00about
02 03 04 05 06 07 08 09
•• A large number of tobacco enterprises are active
the past two decades (Ciecierski, Cherukupalli,
1.2514,000
99 00 01
Male
Yield (Hg/Ha)
•• Employment in tobacco farming has declined over
30
98
since 2001) (Euromonitor International 2013b).
Education
1991
Occupation
1986
12. Euro/US$ European Central Bank exchange rate at
Manager
25.0%
31.12.2009.
13. PLN/US$ EuropeanSelf-employed
Central Bank exchange rate
35.0%
on.31.12.2010.
High
26.0%
Sellf-positioning
on the social
scale
1981
29.0%
Medium
36.0%
Low
0%
10%
20%
30%
40%
50%
60%
cigarette market share of 25% and a leading position
in the smoking tobacco market, IT was the third
largest operating company in Poland (Euromonitor
International 2012b, 20). It is headquartered in
Tarnowo Podgorne in Poznań County (sources: Ash,
TOBACCO CONSUMPTION
•• Smoking prevalence remains high.
• The proportion of daily smokers among adults
has been quite stable around 30%, in the last
Company Annual Report, Euromonitor International).
fifteen years (Figure 12). In the past two years, the
prevalence has increased (+10.8%) mainly due to
• JTI Polska Sp zoo is Japan Tobacco International’s
growth among women (+17.4%) (Euromonitor
(JTI) affiliate in Poland. In 2011, its market share in
International 2013a). In 2011, 1% of men and 2% of
Poland was 18.5% for ready-made cigarettes. Its best
women smoked on a less than daily base (Zadrożna
performing brands are LD and Camel (4.4% and 1.7%
2011, 10).
of the market respectively) (sources: Ash, Company
Annual Report, Euromonitor International).
22%
rate
for 2009 equal to 31.0% of the population. The
60
1,800
•• Independent small grocers constitute the key
18%
distribution channel in Poland (Euromonitor
16%
International 2012b, 32).
• Independent small grocers are the primary points of
10%
sale and they account for 43.4% of cigarettes sales
8%
(Euromonitor International 2013a).
6%
4%
55
key
45 partner countries (Brazil, China, India, Indonesia,
1,350
Russian Federation, South Africa) was 22.1%, and
0%
2003
2004
country
in sixth position out of forty (OECD 2011, 900
51).
30
2007
2008
2009
2010
2011
2012
of cigarettes volume sales (Euromonitor International
Poland GDP growth
(annual
account
for%)
15.8%
Institute, Medical University of Warsaw, and Centers
27 GDP
(annual %)
ofEU
sales
of growth
cigarettes,
5.3% of
• Tobacco specialists are the first distribution
channel for smoking tobacco (50.0%) (Euromonitor
for Disease Control and Prevention 2010, 40; TNS
80,000
Opinion & Social 2010, 30).
Figure 12. Smoking prevalence total and by gender, 1997-2012
45%
• Poland ranks second for the number of points of sale
100,000
40%
(140,000) among EU countries and it hosts 42.8% of
tobacco wholesalers in the entire EU (Pantini et al.
35%
30%
40,000
25%
20,000
20%
0
Area (Ha)
1986
1991
1996
2001
2006
2011
15%
97
400
1.75
350
1.50
300
98
99 00 01
Male
Yield (Hg/Ha)
2.00
31
POLAND
2012, 31).
60,000
1981
600
PerEU
capita
tobacco
expenditure
12th highest in the
(The
Maria
Skłodowska-Curie
smoking tobacco (Euromonitor International 2013a).
120,000
20
Commission’s estimate is 15.3. This value is the
Poland Unemployment
rate (%)
EU 27 Unemployment
rate (%)stores
• Supermarkets/hypermarkets
and discount
140,000
750
of 17.1
00 cigarettes
01 02 03per
04day,
05 while
06 07the
08European
09 10 11
2013a).
-6%
25
• According to the WHO, adults smoke an average
-4%
2006
1,200
35
Greece
had a higher rate than Poland, positioning1,050
the
preferred category of points of sale, with a 20% share
2005
40
only Turkey, Ireland, Chile, Russian Federation and
• Newsagent-tobacconists/kiosks are the second
2%
1,650
• In502009, the average of smokers in the OECD and1,500
14%
12%
country ranks 30th out of 147 countries (WHO 2012).
Tobacco Expenditure
20%
-2%
• The WHO estimated an age-standardised smoking
• Imperial Tobacco Polska SA (IT). In 2011, with a
100%
90%
80%
02 03 04 05 06 07 08 09
Female
10
11
Total
12
2.3%
%
.1%
Infrastructures
160
140
Health
29.5%
%
Legal market
120
Debt
100
Social Assistance
10.2%
1.8%
National Defence
Pensions and Retirement
1.3% 1.2%
Agriculture are decreasing.
Other
•• Consumption
volumes
2.3%
Transfers to local
2.5%
administrations
Health
11.5% consumers
Labor market
• In3.1%
2012,
spent PLN26.9 bn
to purchase
Infrastructures
Debt
3.8%
tobacco products (97% 29.5%
for cigarettes).
Volume sales
Culture and Media
11.5%
of tobacco products
contracted in the past
4.0%
Sport andhave
Tourism
Social Assistance
2.0%
ten
5.4%
80
180
60
• In 2012, menthol
160 cigarettes had a market share of
40
19.5%. The popularity
of these flavoured cigarettes
140
has constantly increased in the past 15 years together
20
120
with the share of the smoking population made up of
0
100
99women.
00 01 The
02 diffusion
03 04
80
is increasing as well (Figure 14). These cigarettes
years (-31.0%, 2002-2012). However,
increasing
National Defence
prices (cigarettes +118.7%,
Production
Exports
Poland's
access to the EU
60 20%
account
for around
of the market
volume
Agriculture
2001-2011)
have
Transfers to local
pushed up the value of the marketadministrations
(+65.7%, 20029.9%
11.5%
Labor
market
2012) (Figure 13) (Euromonitor International
2012a;
Euromonitor
10.2%
11.5%
40
(Euromonitor
International
Imports
Sales 2012b, 35; Euromonitor
20
0
Culture and Media
Figure 14. Slim and menthol99cigarette
00 01market
02 shares,
03 04comparison
05 06 07
with female smoking prevalence, 2002-2012
Sport and Tourism
• The decrease in tobacco sales is due to the price
growth caused by tax increases, growing awareness
of the health risks of tobacco consumption, and
45%
the expansion of the illicit market (Euromonitor
40%
35%
20%
45%
90,000
15%
40%
80,000
10%
35%
70,000
5%
30%
100,000
Volume (mn sticks including
40,000 HRT stick equivalent)
0%
12
02
03
04
Value (mn PLN)
97 98 99 27.2%
00 01 02 03 04 05 06 07 08 09 10
23.3%
11
12
40%
Value (mn PLN)
35%
•• Smoking prevalence is high but health awareness
26.5%
is increasing.
• Health concerns and healthy behaviours
have
27.2%
increased because
31.3%of higher consumer education
29.0%
Euromonitor International
2012b). Nevertheless,
0%
Northwest
cigarette
10%
20%
09
10
11
12
Slim and Superslim market share
26.5%
smoking continues to be popular and socially
East
Female
06
07
08
09
10
11
Slim and Superslim mark
4.8
2.8
pack of Marlboro, the premium best seller,
is PLN12.50 (US$4.02) (in 2012, it was PLN11.90,
+5.0%). The selling
40%price of Red & Whites, the leading
32.3
29.5
28.6 cigarettes, is PLN10.60; PLN0.80
brand of economy
25.5
24.4
35%
than in 2012 (Euromonitor International 2012a;
Łęczek and
30%2012).14
Himmel
25%
2.1
3.3
4
2.8
3.5
20%
50,000
200,000
International$ was 4.09. At
that time,
4.09 was200,000
the 54th
15%
28.6
highest price among
the 166
recorded
Daily
Less
than Daily by the WHO
25.5
(2011a).
versions of their preferred brands, considering them
10%
29.0%
the various types of cigarettes,
32.3
2
24.4
5%
ultra-low tar experienced the smallest sales decline in
Female
05
more than 3.3
in 2012. The selling price for a
0%
South
Total
04
• In 2010,
of the most
Up to sold brand
50,000 -expressed
Over in
Rural the price
Urban
Male
10%
20%
30%
40%
2011 0%
(-2%) (Euromonitor
International
2012b,
28).
03
Menthol market share
3.5
• Polish smokers choose lower tar and31.3%
lower nicotine
less harmful. Among
Central
02
Female share of smokers
25% 20-sticks
5%
30%
40%
50%
accepted (Zatonski
2003;
Ciecierski
2007, 2).
21.3%
Total
08
2.1
brand costs PLN12.20 (US$3.92, Int.$6.04),
10% more
and anti-smoking campaigns 23.3%
(Ciecierski 2007, 2;
Southwest
ral
0%
30% 5.2%
15%
North
uth
07
• In 2013, a 20-cigarettes pack of the most popular
20%
21.3%
ast
25% 06
05
5%
•• Cigarettes are expensive
in Poland.
est
Poland's access
10%
10,000
est
Sales
10
15%
20,000
0
Imports
20%
Menthol market share
30,000
rth
Exports
09
25%
11
Production
08
30%
Figure 13. Retail tobacco market, 1997-2012
60,000
97 98 32
99 00 01 02 03 04 05 06 07 08 09 10
50,000
07 super
08 slim
09 10
11 12
of05slim06and
cigarettes
0%
50%
Rural
Urban
Up to
50,000
50,000 200,000
Male
20
Daily
14.
exchange17.43
rate on
18 PLN/US$ European Central Bank16.05
31.03.2012 and 31.12.2009.
16
14
12
10
13.46
13.43
11.23
Less than Daily
18.26
Ov
200
(PLN)
Incidence of tobacco
products (%)
1.60
140,000
2.20 1: The Five 1.20
Chapter
Drivers
1.50
1.10
1.50
2.00
120,000
100,000
Table 2. Sales of tobacco by category: volume 2005-2012
80,000
Source: Transcrime elaboration on Euromonitor International (2012a; 2013a) data
2005
2006
60,000
2008
2007
2009
2010
2011
2012
59,205,400
56,393,400
54,398,800
50,946,900
40,000
73,787,000
72,469,000
69,907,000
6.8
8.2
9.3
Cigars (mn units)
63,096,600
20,000
10.3 0
1981
HRT (tonnes)
1,275.8
1,051.3
915.0
2001
• 2.55% of the per capita GDP
is needed
to purchase
June
October
January
Month
100 20-packs of Marlboro (105th position out of 168
January
22%
the EU, Poland ranks sixth out of 27 EU Member
Specific Tax
States for the affordability of a pack of Marlboro
Month
22%
22%
22%
January
January
July
January
March
80.87
91.00
91.00
33.7%
37.9%
37.9%
products lead to substitution among the products
themselves (Chaloupka et al. 2000). In fact, cigarette
from manufactured cigarettes to HRT (Figure 15)
(WHO 2010).
68.38
75.12
100
50
2010
2011
2012
2013
PRICE RATIO (cigarette price/HRT price)
VOLUME RATIO (cigarette volume/HRT volume)
January January January
January
• Nonetheless, because also HRT is subject to rising
22%
99.16
taxation,
the22%
market penetration
products
22%
23%
23% of illicit
23%
has increased (Euromonitor International 2012b, 60).
138.50
146.83
158.36
170.97
188.0
• The major tobacco companies are adapting to the
15-19
41.3%
17.6%the range and quality of
downtrading
by expanding
31.4%
31.4%
31.4%
31.4%
31.4%
their
20-29
HRT products. According to experts, the retail
31.7%
volume of HRT will rise to 3,700 tonnes by 2016
30-39
(Euromonitor
34.3%
40-49
Tobacco consumption
to customers looking for cheapand
products
such as the
sales indicator
50-59
ironic “Brezobotne – The Unemployed
40.5%
Cigarette”
(Ciecierski
2002). However, downtrading, in Poland,
60+
15.4%
0 points
• In 2012, a large number of consumers switched from
HRT to tobacco’s green leaves causing a contraction
of HRTofmarket
2) The manufacture
tobacco(Table 2). Green leaf was the cheapest
1 point
productsway
is subject
to licensing
of smoking
in Poland because it was not subject
is mainly among different products
illicit cigarettes
1) Banand
on smoking
in public places
0%
10%
20%
30%
40%
and not among cigarettes of different price bands
(Figure 16, p.34).
Female
Male
POLAND
tax increases have induced some
smokers to switch
Value
64.00
• Companies commercialise brands specifically40.0%
targeted
2009
22%
64.00
33
2009
22%
200
0
2008
22%
250
150
2008
• Differences in tax incidence among tobacco
1) The retail of tobacco products is
subject to licensing
22%
0.75
2007
(Table 2) (Euromonitor International 2012b, 60).
Tabela 2
January
0.25
25.0%
25.0%
26.7%
28.5%
31.3%
0.00
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
interest in HRT and, during 2012, in green leaves
% of price
January
25.0%
ready-made cigarettes. As a result, there is growing
Ad valorem Tax
May
25.0%
and heavy smokers, are no longer able to afford
1.00
22%
January
25.0%
price-sensitive consumers, like low-income people
Specific Tax
January
1.25
25.0%
alternative tobacco products (downtrading) as most
350
300
57.00
0.50
• Rising cigarette prices continue to fuel demand for
% of price
2006
52.00
(Table 2) (Euromonitor International 2012b).
VAT
2005
50.00
expensive products as a result of price increases
Unit of Measurement
2004
42.00
•• In recent years, consumers have shifted to less
Year
2004
% of price
2011
1,789.9
Yield (Hg/Ha)
37.50
(Eriksen, Mackay, and Ross 2012; PMI 2013).
Ad valorem Tax
2,898.5
2,753.6
1.50
countries)
(Eriksen, Mackay,
and Ross
2012).22%
Within
% of price
22%
22%
VAT
2006
400
1.75
2003
2002
Price Ratio
2000
15.3
2001
2.00
the one printed on the packaging (Euromonitor
2000
14.2
1996
to sell tobacco products at a price lower than that
Unit of Measurement
13.1
1991
Figure 15. Consumer switch to HRT in response to cigarette price
increases, 1997-2012 price and volumes relationship
higher than the suggested retail prices. It is forbidden
1986
1,421.9
2,068.9
Area (Ha)
• In Poland, retailers can sell tobacco products at prices
Year
11.6
Volume Ratio
50%
V
0.
Total
2) Ban on smoking in workplaces
0.
to any excise duty. It was sold as unprocessed
3) There is a mandatory system of
tobacco exploiting a tax loophole which
customer identification and
0.5 points
verification
applied2013
to the (KPMG
supply 2013, 155).
January
chain of tobacco products
4) There is a tracking and
tracing system for tobacco
products
0.5 points
was closed in
3) Ban on the sale of tobacco
products from vending machines
1
4) Prohibition of tobacco sales to minors
1
2.5
2.0
5) Ban on smoking in bars, cafés
20%
99
20,000
Sport and Tourism
20%
10,000
15%
15%
97
98
97 98 99 00 01 02 03 04 05 06 07 08 09
99 00 01 02 03 04 05 06 07 08 09 10 11 12
Male
Female
Male
Female
Total
10
Legal market
11
12
0
Total
00
01
02
10,000
03
04
05
06
07
08
09
10
11
12
0
Production
the EU
97 98 99 Exports
00 01 02 03 Poland's
04 05 access
06 07to 08
09 10
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Imports
Sales
11
12
Value (mn PLN)
Value (mn PLN)
Figure 16. Selling shares according to price bands, 2002-2012
volume time series
Figure 17. Daily smoking prevalence per area, 2009/2010
Source: Transcrime elaboration on GATS Poland (2010) data
Source: Transcrime elaboration on Euromonitor International (2012a; 2013a) data
100%
90%
40%
80%
70%
60%
50%
40%
30%
70%
Southwest
35%
60%
30%
Northwest
50%
25%
40%
20%
30%
15%
South
20%
20%
10%
0%
0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Economy
Mid-Priced
Premium
Volume (mn sticks
including HRT stick equivalent)
Value (mn PLN)
Economy
Mid-Priced
Premium
20.2%
Various socio-demographic
and economic
23.3%
20.2%
Secondary
variables play a significant
role26.2%
in determining the
Secondary
26.2%
Vocational
39.1%
26.5%
demand
for
tobacco.
Vocational
39.1%
Primary
18.8%
Primary
18.8%
21.3%
Students
23.0%
Place of residence (Figure
17). Smoking prevalence
Students
23.0%
Retired
17.0%
is higher in the South
Retired
17.0% (31.3%) and in the Central
31.3%
Unemployed
52.0%
area
of
the
country
(29.0%). The eastern
part records
Unemployed
52.0%
House persons
27.0%
the lowest smoking
(21.3%) (The Maria
29.0% prevalence
House persons
27.0%
Manual workers
39.0%
Skłodowska-Curie
Institute,
Medical
Manual workers
39.0% University
Other white collars
32.0%
of Warsaw,
and
Disease
20%
30% Centers
40%for
50% Control and
Other10%
white collars
32.0%
Manager
25.0%
Prevention
2010).
Manager
25.0%
Total
Female
Self-employed Male
35.0%
Self-employed
35.0%
High
26.0%
Smoking
prevalence is26.0%
higher in the cities (28.6% of
High
Medium
29.0%
daily smokers) than in rural
areas (24.4%) (Figure
Medium
29.0%
Low
36.0%
18).
50,000-200,000
Low In particular, the cities with
36.0%
Education
Education
Occupation
Sellf-positioning
on the social
scale
Sellf-positioning
on the social
scale
0%
0%
20%
30%
40%
50%
inhabitants
have
the 10%
highest
prevalence
of
daily
0%
10%
20%
30%
40%
50%
60%
0%
35%
100%
30%
90%
25%
80%
70%
20%
60%
15%
50%
10%
40%
5%
30%
20%
0%
10%
0%
3.5
90%
70%
1,200
60%
1,000
50%
800
40%
600
600
30%
4002008 2009 2010 2011 2012 2013
2004 2005 2006 2007
400
20%
200
200
10%
0
01 02 03 04 05 06 07 08 090% 10
0
01 02 03 04 05 06 07 08 09 10 11
Recorded crimes
100%
90%
80%
80%
1,400
70%
60%
50%
40%
30%
20%
10%
11
0%
Crime detection rate
4.8
2.8
70%
60%
50%
28.6
24.4
40%
32.3
25.5
29.5
30%
20%
10%
Rural
0%
Up to
50,000 Over
50,000
200,000
200,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2004 2005 2006
2009
Daily2007 2008Less
than2010
Daily 2011 2012 2013
Urban
and quantity (18.31 sticks per day against 15.51) (The
Warsaw, and Centers for Disease Control and 18.26
17.43
2010, 86). These differences
are more
16.05
16 evident in rural areas (32.1% vs. 16.8%) than in cities
5,000
9.29
13.46
13.43
vs. 23.5%) (The
Maria Skłodowska-Curie10.00
4,475
14 (34.4%
5,000
9.29
4,500
11.23 University of Warsaw, 4,475
Institute,
Medical
and
Centers
12 4,500
9.00
4,000
Disease Control and Prevention 2010, 83). 8.00
10 for
4,000
6.38
3,500
Men’s prevalence is 6.38
the third highest among OECD
8 3,500
7.00
3,000
15
2,517
countries,
(fourteenth
for
women)
(OECD
2012a).
6 3,000
6.00
2,517
2,500
2,045
4 2,500
5.00
2,045
2,000
3.30
1,610
2 2,000
4.00
15. The ranking1,610
has
been compiled by3.30
Transcrime on OECD 2.59
1,500
2.59
0
1,500
Health
Data 2012,
taking the latest available year from 20063.00
to
1,000
2006
2007
2008
2009
2010
2011
20101,000
into account.
2.00
500
500
1.00
0
2008
2009
2010
2011
0
0.00
2008
2009
2010
2011
Number of Seizures
1,800
1,600
2.1
3.3
80%
18 Prevention
Prevention 2010).
50%
Maria Skłodowska-Curie Institute, Medical University
Crime detection rate, %
800
90%
200,000 inhabitants (4.8% of the population) (The
1,000
100%
20 of
of Warsaw, and Centers for Disease Control
and
100%
Recorded crime, thousand
1,200
10%
20%
30%
40%
20%
30%
40%
50%
06
07
08
09
10
11
12
Total
Female
Male
Total
Female Slim and
Male
Menthol market
share
Superslim market share
smoking is more widespread in cities with more than
2,000
1,400
0%
10%
04
05
0%
02 03
of both prevalence (33.5% vs. 21.0%) (WHO 2011a)
60%
1,600
29.0%
• Gender. Men smoke more than women in terms
smokers (32.3%). The phenomenon of occasional
1,800
29.0%
Central
Central
5%
•
2,000
31.3%
40%
•
Occupation
ntral
31.3%
South
••
outh
East
expected to continue increasing in volume and value
27.2%
East
21.3%
occasionally. The market for these products is
orth
34
21.3%
East
Figure 18. Comparison between urban and rural areas. Daily smoking
prevalence (%), 2009/2010
in the next few years (TNS Opinion & Social 2010).
west
26.5%
26.5%
• Poles smoke cigars, pipes and water-pipes mainly
west
23.3%
Northwest
10%
10%
23.3%
Southwest
Number of seizures
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Average seized quantity
Average seized quantity, thousand of packs
80%
27.2%
90%
27.2%
North
45%
North
Number of Seizures
100%
0.00
40,000
0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
20,000
25%
0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Chapter 1: The Five Drivers 20%
Economy
Mid-Priced
Premium
0 RATIO (cigarette volume/HRT volume)
VOLUME
1981
1986
1991
1996
2001
2006
15%
2011
while the female prevalence increased by 28.0%
350
50-59
250
The average age at which a person
starts smoking
40.0%
1.00
is nineteen, but the share of smokers beginning
0.75before
200
they turn eighteen is more
than 50% (The
40.5%
150
100
0.50Maria Skłodowska-Curie Institute, Medical University
60+
15.4% and Centers for Disease Control and
of Warsaw,
0%
80%
23.0%
70%
17.0%
Retired
60%
52.0%
Unemployed
50%
27.0%
House persons
40%
39.0%
Manual workers
30%
32.0%
Other white collars
20%
25.0%
Manager
50
0.25
10%
20% 2010; 30%
50% 2012b).
Prevention
European40%
Commission
18.8%
Students
34.3%
1.25
Total
39.1%
90%
Primary
Occupation
Price Ratio
40-49
12
26.2%
100%
Vocational
49 (40.0%) and between 50 and 59 (40.5%) is300
higher than in the rest of the population (Figure 19).
11
20.2%
Secondary
10%
35.0%
0%
26.0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Medium
29.0%
Economy
Mid-Priced
Premium
Low
36.0%
Self-employed
0
0.00Males start to smoke earlier than females and people
Female
97 98 99 00Male
01 02 03 04 Total
05 06 07 08 09 10 11 12
in bigger towns earlier than people in villages (The
Sellf-positioning
on the social
scale
1.50and
30-39
Education
400
31.7%
•1.75Age. Prevalence among
Poles aged between 40
10
Female
Volume Ratio
20-29
02 03 04 05 06 07 08 09
Source: Transcrime elaboration on GATS Poland (2010) and TNS (2010) data
2012, the male prevalence has been stable (+1.4%),
2.00
99 00 01
Figure 20. Smoking prevalence by educational level, occupation and
social status, 2010
prevalence are tailing off. Between 2006 and
(Euromonitor
17.6% International 2013a).
98
Male
Area (Ha)
Yield (Hg/Ha)
• Time
series show that
the gender differences
in
15-19
97
High
of Warsaw, and Centers for Disease Control and
0%
10%
20%
30%
40%
50%
60%
Prevention 2010).
Figure 19. Smoking prevalence by age
In conclusion, the tobacco market is an
1,800
its
exports.
34.3%
40-49
40.0%
1.0
50-59
40.5%
0.5
60+
0.0
1,200past few years, cigarette
the
Male
50%
70%
consumption23.0%
has60%
Retired
17.0%
1,000
50%
declined
in favour of less
expensive products
as
a 800
result of large taxUnemployed
increases.
600
0
40%
27.0%
30%
House persons
Manager
01
02
03
04
05 06
Self-employed
Total
Recorded crimes
• Social groups. Income and social status strongly
07
08
09
10
26.0%
29.0%
High
Medium
36.0%
Low
0%
influence Polish smoking rates. Less educated and
52.0%
39.0%
20%
32.0%
10%
25.0%
0%
11
35.0%
Manual workers
Other white collars
200
0%
10%
20%
30%
40%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Female
Primary
18.8%
1,400
in
to the East. Over
400
15.4%
39.1%
Vocational
1,600
Poland,
especially when
compared with those80%
Students
35
10%
20%
30%
40%
50%
POLAND
less affluent people smoke more than better educated
and wealthier people (Figure 20) (Euromonitor
Ukraine
Borders
2.5
Lithuania
Germany
Internal territory 2.0
Belarus
Territorial waters
1.5
Russia
Czech Republic
1.0
Airports
Slovakia
0.5
0
0.0
10
20
30
40
50
60
70
2011
2010
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
60%
0
2,000
100%
1,800
90%
1,600
80%
1,400
70%
1,200
60%
1,000
50%
800
40%
600
30%
400
5
200
0
20%
10
2011
01 02
15
03
20
2010
04
05
25
06
30
07
08
35
09
10
10%
11
0%
30-39
Prices of cigarettes are high in
31.7%
100%
26.2%
90%
Secondary
20-29
1.5
Education
17.6%
Sellf-positioning
on the social
scale
2.0
University
or higher
2,000
important
sector
of the
Polish economy 20.2%
and
Occupation
15-19
2.5
36
THE FIVE
DRIVERS:
REGULATION
T
obacco control in Poland is medium. There is a medium-low level of supply chain control, a
medium-high level of control on tobacco consumption and a medium level of control on sales,
advertising and promotion. Agreements between OLAF and the main stakeholders are crucial in
regulating the industry. Tax incidence on tobacco products is among the highest in the world. The
country has a low per capita level of expenditure on tobacco control policies.
37
135
43
63,097
2009 59,205
2010 56,393
2011
24
69,907
2007
58
49
2008
2009
41
5.5
5.3
5.0
4.6
41
2010
2011
58.0*
0.1
2011
Opioids
0.6
Source:
50,947
51,102
2009 2010
2011
2012
57,703 61,997
2007
2008 2009 2010
176.6
Last
available data (2013):
Cannabis
4.09
86.4
93.8
86.4 %
2011
2012
High %
High
Government expenditure on
tobacco control not including
the control on the ITTP per
1,000 inhabitants (US$)
93.8
Low %
Low
86.4
3.02
2008
Int.$, PPP 176.6
2010
Tax per 1,000
PPP
2008 sticks/Int.$,
2010
(2010)
84.6% – Int.$, PPP 255.5 (European Commission)
Government Action
2006
2010
US$ 10.9
58
10.9
10.9
(last available year)2008
2010
5.3
5.0
4.6
2008
2009
Tobacco Consumption and
Sale Control*
Composite indicator measuring
the presence of specific policy
measures in the country
41
5.5
41
58.0*
2011
1.3
1.4
1.2
1.3
2012
Rank
Low
2.7
1.1
2/5 points
0.1 0.2
2005 2006 2007 2008 2009 2010
(2013)
2
1.1
0.6
0.1
2011
Opioids
2012
Cocaine
Cannabis
1
4
4/5 points
3
(2013)
2
1
3/5 points
Tobacco Marketing and
Promotion*
2010
Value
Tobacco Supply Control*
41
1.5
High
49
Source: WHO–Global Tobacco Epidemic
38
106,291
141.7
WHO
2012
Cocaine
54,399
HRT
2007 2008
Tax per 1,000 sticks in Int.$,
PPP
1.1 of the most sold brand
0.1 0.2
95,358
80,854
2012
Tax as % of the final retail
price of the most sold brand
2.7
Regulation
Cigarettes
41
Rank
Taxation
Value
2008
3
(2013)
2
1
* The indicator should not be interpreted as if a higher value is always better than a lower value. The objective is rather to synthetically assess
the intensity of policy measures in a specific field.
•• Poland has a weakly regulated tobacco market.
•• Important requirements regard bans on products.
• In 2010, Poland ranked 19th among 31 European
• In 2004, with Poland’s accession to the EU, the
countries on the Tobacco Control Scale (TCS).
Government banned the selling of cigarettes with tar
It had lost 5 positions since 2007, reflecting a lack
levels higher than 10mg (Euromonitor International
of activity in the period (Joossens and Raw 2011,
2012b, 5).
8).16 This occurred despite the fact that in 2007 the
government launched the “National Tobacco Control
• The European Commission is working on
Action Plan” for the period 2007-2015 (WHO 2009,
legislation to ban menthol, other flavoured
51).
cigarettes and slim cigarettes. According to the EC,
young people, notably young women, find these
• The World Health Organisation has stressed some
products particularly attractive. If approved, the
weaknesses in Poland’s regulations and policies
proposal is expected to be adopted in 2014, and
concerning smoke-free environments and warning
would come into effect in 2015 (Nikolas 2012; Polskie
labels (WHO 2011b, 100).17
Radio 2013; Mardosz 2013).
• However, when considering Central and Eastern
• Poland manufacturers produce as much as 40% of all
Europe, Poland has one of the most stringent tobacco
EU menthol cigarettes. This ban could have a major
control environments (Ciecierski 2007).
negative impact on the tobacco industry and the
government’s budget (Mardosz 2013). For this reason,
•• The Polish regulation must comply with EU and
international requirements and standards.
a spokesman of the Health Ministry has declared that
Poland will not support the draft directive on tobacco
(Polskie Radio 2013; Londynek 2013).
• Since 15 September 2006, Poland has been a Party
to the WHO Framework Convention on Tobacco
•• Taxation is high.
39
Control, an international treaty establishing a number
• For a number of years, Poland has pursued a tobacco
Member State of the EU, Poland must implement
control tax policy with yearly excise duty rises
EU legislation (Ciecierski, Cherukupalli, and Weresa
exceeding inflation (WHO 2009, 36). Increased
2011a, 16). Since the EU’s competence in the
taxation has been associated with falling rates of
field of health is limited, most EU provisions focus
smoking (Ciecierski 2007).
on the tobacco market and the development of a
common market among the 27 EU Member States.
• Duty on cigarettes has increased to 84.61%
These measures affect taxation,18 manufacture and
of the final price on 1 January 2013 (European
distribution and advertising, thus also influencing
Commission 2013). According to the Ministry of
health issues and tobacco control (Transcrime 2011a).
Finance, the average increase in the retail price of a
19
20
pack of twenty cigarettes is PLN0.60 (Polskie Radio
dla Zagranicy 2012). It follows that the amount of total
taxes per 1,000 sticks in International $-PPP is 255.5
(PLN188.0). In 2010, it was 176.6 (29th worldwide)
(Table 3, p.40) (WHO 2012; European Commission
2013).
19. Directive 2001/37/EC regulates manufacture and distribution
in the EU. In addition, Council Recommendation 2003/54/EC of
2 December 2002 invites EU Member States to further restrict
or prohibit the sale of tobacco products to minors (Transcrime
2011a, 6).
20. The EU regulation concerning advertising is laid down by:
Directive 2010/13/EU – for audiovisual media services, including
television advertising; Directive 2003/33/EC – for other types of
advertising (Transcrime 2011a, 6).
POLAND
16. The TCS was developed to assess the level of national
regulations in regard to the six tobacco control policies identified
by the World Bank, comprising higher taxation of tobacco
products, bans in public and work places, bans on advertising
and promotion, consumer awareness, warning labels, and
quitting help (World Bank 2011).
17. The WHO report is based on the MPOWER package of
measures developed by the WHO. MPOWER is an acronym
of the six policy measures which include: monitor tobacco use
and prevention policies; protect people from tobacco smoke;
offer help to quit tobacco use; warn about the dangers of
tobacco; enforce bans on tobacco advertising, promotion and
sponsorship, and raise taxes on tobacco (WHO 2008).
18. With respect to taxation, Directives 2008/118/EC and
2007/74/EC provide a general framework on taxation; Directives
92/79/EEC, 92/80/EEC, 95/59/EC specifically concern tobacco
products (Transcrime 2011a, 6).
19. Directive 2001/37/EC regulates manufacture and distribution
in the EU. In addition, Council Recommendation 2003/54/EC of
2 December 2002 invites EU Member States to further restrict
or prohibit the sale of tobacco products to minors (Transcrime
2011a, 6).
of obligations for countries (WHO 2011c). As a
HRT (tonnes)
1,275.8
1,051.3
915.0
1,421.9
Regulation
2,068.9
2,898.5
2,753.6
1,789.9
Table 3. Poland’s taxation on finished cigarette variations, June 2000-January 2013
Source: Transcrime elaboration on Ciecierski et al. (2011a) and European Commission – Directorate General Taxation and Customs Union Tax policy data
Year
Unit of Measurement
Month
VAT
Specific Tax
Ad valorem Tax
Year
% of price
% of price
Unit of Measurement
Month
VAT
Specific Tax
Ad valorem Tax
40
% of price
% of price
2000
2000
2001
2002
2003
2004
2004
2005
2006
June
October
January
January
January
January
May
January
January
22%
22%
22%
22%
22%
22%
22%
22%
22%
37.50
42.00
50.00
52.00
57.00
64.00
64.00
68.38
75.12
25.0%
25.0%
25.0%
25.0%
25.0%
25.0%
26.7%
28.5%
31.3%
2007
2008
2008
2009
2009
2010
2011
2012
2013
January
January
July
January
March
January
January
January
January
22%
22%
22%
22%
22%
22%
23%
23%
23%
80.87
91.00
91.00
99.16
138.50
146.83
158.36
170.97
188.0
33.7%
37.9%
37.9%
41.3%
31.4%
31.4%
31.4%
31.4%
31.4%
• In 2010, Polish tax incidence accounted for 86.4% of
Tabela
2 retail price of the most sold brand (second
the final
• On January 2013, the Polish government amended
the Act of 6 December 2008 on excise duty (Journal
place after Bulgaria out of 181 countries analysed
of Laws of 2011, no.108) and introduced duties on the
by the WHO) (Figure 22, p.41) (WHO 2011d; WHO
consumption of green leaves (see box Green
leaf).
Tobacco consumption
Supply chain control
indicator
21
Value
and sales indicator
2011c, 100). Today Polish taxes as shares of
cigarette prices are the fifth highest among EU
GREEN LEAF
member states (European Commission 2013).
0 points
• Tax incidence of cigarettes has grown by 19.0%
since Poland joined the EU in 2004, but it has
2) The manufacture of tobacco
decreased
13.3%
since the
products isby
subject
to licensing
point
peak of1 March
2009,
when the tax incidence was 97.62% (Figure 21, p.41
•
and
Table
3) (European
Commission
2013).
3)
There
is a mandatory
system
of
0.5 points
verification applied to the supply
chain
tobacco products
The
EUofrequires
a minimum of €90 of taxes per
2012, KPMG estimated green leaf to account
forsmoking in workplaces
2) Ban on
the equivalent of over six bn cigarettes. According
to industry sources, in 2012, green leaf accounted
1,000
0.5 points
this minimum
tax by 31
December 2017 (Ciecierski, Cherukupalli, and Weresa
2011a).
5) Absence of free-trade zones
for tobacco products
shifted to green leaf because of its lower price. For
Ban onthe
the sale of tobacco
for the 7% of the entire tobacco market. 3)
Before
cigarettes by January 2014. Poland and other recent
EU
members
impose
tracing
systemmust
for tobacco
products
1) Ban on smoking in public places
During 2012, a relevant share of consumers of HRT
amendment of the law, the product was sold as
unprocessed tobacco without paying any excise
duty. It was possible to legally purchase 4)green
leaf
Prohibition of tobacco sales to m
online and from corner shops (PMPL 2012; KPMG
2013, 155).
and restaurants
0 points
21. The most recent data from the EU Commission show
that all taxes applied to cigarettes, including valued added
tax, represent 84.61% of the weighted average price (WAP)
Tabela 3
(European Commission 2013). According to Article 2 of Council
Directive 92/79/EEC “The weighted average retail selling price
shall be calculated by reference to the total value of all cigarettes
released for consumption, based on the retail selling price
including all taxes, divided by the total quantity of cigarettes
released for consumption” (European Commission 2013, 5).
Poland occupies the second position among EU Member States
Workplaces
with highest tax percentage of the WAP.
Bars and Pubs
Tabela 4
Smokers
Non-Smokers
Men
Women
Men
Women
14%
6%
14%
7%
18%
10%
20%
15%
20%
0%
Total
30%
10%
Female
40%
20%
Male
Total
0%
50%
30%
Female
40%
Rural
50%
Up to
50,000 2005
50,000
200,000
Rural
Urban
Urban
0%
Daily
Cigarettes (mn
sticks)
Male
Less
than Daily
73,787,000
Daily
8.2
Figure 22. Revenues from excise duties on tobacco products, PLN
mn, 2006-2011
HRT (tonnes)
1,275.8
1,051.3
Source: Transcrime elaboration on the European Commission – Directorate General Taxation
and Customs Union Tax policy data
Source: Transcrime elaboration on Ministry of Finance (2012a) data
20
90%
16
80%
13.46
14
70%
11.23 14
12
60%
8
40%
30%
June
October
January
January
22%
22%
22%
22%
2007 0 2008
2009
37.50
PLN per 1,000
cigarettes
2006
2007
2010
42.00
2008
2011
50.00
2009
52.00
2010
25.0%
25.0%
2008
2009
July
January
8
6
4 price
% of
2
0
2006
Specific Tax
The provisions
of
the
Act
Ad•
valorem
Tax
% of
price
Year
share of revenues from excise duties.
tobacco taxation increased by 35.7% between 2006
8.00
•• Government investments in tobacco control
500
000
1,610
500
000
500
0
2008
Number of Seizures
000
7.00
policies are exiguous.
6.38
3,500
6.00
7.00
Price of 20-cigarettes pack (PLN)
8
6
4
2
1997
1998
1999
0
2000
1997
2001
1998
4%
80.87
91.00
2002
1999
2003
2000
Price
2004
2001
41
91.00
99.16
Western Balkans 2010
5%
•• Poland has a medium-low
level of supply chain
Western Balkans 2
Eastern 37.9%
Balkans 201037.9%
% of price
33.7%
41.3%
Ad valorem Tax
control (2 points out of 5, Table 4).Eastern Borders 2010
38% 35%
60% 58%
38% 35%
Eastern Balkans 2
Eastern Borders 2
Western Balkans
2011
60% 58%
Table 4. Regulation on supply chain control in Poland
Tabela
2
Source: Transcrime
elaboration
Western Balkans 2
Eastern Balkans 2011
Eastern Balkans 2
Eastern Borders 2011
Eastern Borders 2
Value
0 points
2) The manufacture of tobacco
products is subject to licensing
1 point
28%
3) There is a mandatory system of
verification applied to the supply
chain of tobacco products
28%
24%
0.5 points
24%
POLAND
10
5%
22. PLN/US$
14 European Central Bank exchange rate at
31.12.2009.
23. The figure
12 included “funding at national level (for federal
countries the sum of all funding by governments of the different
regions, but not of the local communities) in 2009 for mass
10
communication campaigns, tobacco control projects, educational
programs, support for non-governmental organizations. Tobacco
8
control spending
from sources other than the government, such
as the private sector, is not included in our figure. Funding for
6
tobacco dependence
treatment (including reimbursement of
medications and quit-lines) and enforcement of legislation are
not included”
4 (Joossens and Raw 2011, 6).
24. The ranking has been compiled by Transcrime on WHO
Country Reports
2010 data.
2
12
Specific Tax
Joossens
andseized
Rawquantity
2011, 6).
Average
Number of seizures
0
8.00
22%
Chief Sanitary Inspector are actually much lower
4%
2,517
3,000
6.00
2,517
5.00
• 2,045
Joossens and Raw remark that
state funding
2,500
5.00
4.00
2,045
3.30control
for tobacco
remains
very low (2011,
2,000
4.00
3.30
2.59
1,610
9). According
to government 3.00
data, the tobacco
2.59
1,500
3.00
2.00
control budget for Poland amounted
to PLN1 mn
1,000
2.00
22
1.00
(approximately US$350 thousand),
corresponding
500
1.00
0.00person.23 Poland’s
to approximately US$0.011 per
20090
2010
2011
0.00
expenditure
56th in the2011
world24 (WHO
2008per person
2009 is the2010
2011a;
Number of seizures
14
9.00
consequences of
tobacco smoking.
Transfers
to the 22%
22%
% of price
22%
4,000
6.38
500
4,475
tobacco products to fund the January
implementation
January
(WHO 2009, 51).
10.00
9.00
and 2011 (Figure 22)
(Ministry of Finance 2012a, 9).
4,475
4,500
000
VAT
10.00
9.29
use 0.5% of budgetary revenue from the excise duty
of programmes to reduce the health-threatening
revenues from excise duties. The revenues from
5,000
and Tobacco
Products
specify that2007
Poland 2008
should
Unit
of Measurement
Monthon
• Revenues from tobacco accounts for 32% of total
9.29
on Protection
25.0% of Health
25.0%
2
against the Consequences of the Use of Tobacco
•• Taxes on tobacco products account for a high
500
11.23
2000
2002
VAT2
2004 2005 2006 0%
2007 2008 2009 2010 2011 2012 2013
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
13.43
2001
4
10%
18
16.05
2000
Month
6
20%
17.43
13.43
13.46
12
Unit of Measurement
10
10
Year
50%
16
915.0
16.05
18
63
18.26
17.43
20
18
Ov
200,
9.3
Figure 21. Tax incidence on cigarettes, Weighted Average Price,
2004-2013
100%
2007
50,000 200,000
72,469,000
69,907,000
Less than Daily
6.8
Cigars (mn units)
000
Over
2006
200,000
Up
to
50,000
20%
tracing system for tobacco
products
20%
0.5 points
16%
12%
5) Absence of free-trade zones
for tobacco products
16%
12%
0 points
8%
ITTP penetration
10%
ITTP penetration
0%
8%
Note: the indicator should not be interpreted
4% as if a higher score
is always better than a lower score. Its purpose is rather to
4%
Tabela
synthesise3the intensity of policy measures in a specific field.
2005
2006
2007
2002
2003
2004
ITTP penetration
Price
2008
2005
2009
2006
2010
2007
ITTP penetration
2011
2008
2012
2009
0%
2010
2011
2012
0%
Smokers
ce
22%
22%
22%
22%
22%
22%
0 cigarettes
37.50
42.00
50.00
52.00
57.00
ce
25.0%
25.0%
25.0%
25.0%
25.0%
surement
January
22%
0 cigarettes
80.87
ce
33.7%
ucts is
co
nsing
em of
nd
42
supply
s
o
es
22%
22%
64.00
Regulation
64.00
68.38
75.12
25.0%
26.7%
31.3%
• The retail sale of tobacco products does
2007
ce
or
22%
2008
2008
2009
2009
2010
2011
not require a licence in Poland. However, all
entrepreneurs
must enrol
on theMarch
National January
Court
January
July
January
Register (Law no.168 of 2007 and Law no.155 of
January
2007) or on the Central Register of Business Activity
22%
22%
22%
22%
22%
91.00
91.00
99.16
138.50
146.83
41.3%
31.4%
31.4%
2013
January
January
regulated in Poland (4 points out of 5, Table 5).
• Smoking bans and restrictions are widespread. In
November 2010, the Polish government introduced a
158.36
170.97
Article 855 of Law no.100 of 1931 that regulates the
37.9%
2012
23%
infringement of criminal or civil legislation according to
37.9%
•• Tobacco consumption and sales are medium-high
23%
(Law no.173 of 2004). Despite the licence, the activity
can be limited, sanctioned or prohibited due to
28.5%
31.4%
selling of tobacco products (point 1 in Table 4, p.41).
• The manufacture of tobacco products is subject
to licensing. Law no.251 of 2007 and Law no.59 of
23%
ban on smoking in all of the eight categories of public
places identified by the WHO. Effectiveness of the
188.0
smoking ban seems to vary according to the different
free smoking areas (Table 6, p.43) (points 1 and 2 in
31.4%
31.4%
Table 5).25
Table 5. Regulation of tobacco consumption and sales in Poland
2009 regulate the manufacture of tobacco products.
Laws require manufacturers to enrol on PKD Polska
Value
Klasyfikacja Działalności, the register of regulated
Tobacco consumption
and sales indicator
Value
activities (point 2 in Table 4, p.41).
0 points
• No Polish law requires mandatory customer
0.5 points
0.5 points
identification and verification for the tobacco
products’ supply chain. However, agreements
1 point
between the main tobacco manufacturers and OLAF
(European Anti-Fraud Office) have introduced such
measures. These agreements bind the industry to
0.5 points
support measures such as “know your customer”,
1 point
1 point
and restaurants
1 point
“know your payments”, and volume controls/
monitoring (point 3 in Table 4, p.41) (European
0.5 points
Commission 2004; European Commission 2007;
European Commission 2010a; European Commission
2010b).
0 points
• Polish law does not require any tracking and
tracing system for tobacco products. However,
the EC has signed legally binding and enforceable
agreements with the main tobacco manufacturers
to combat the ITTP. For
this reason, Non-Smokers
the main Polish
Smokers
tobacco industries have a track and tracing system
(point 4 in Table 4, p.41) (European Commission
Men
Women
Men
Women
2004; European Commission 2007; European
Commission
Workplaces 2010a; European Commission 2010b).
14%
6%
14%
7%
• Poland has 14 designated free trade zones
Bars and Pubs
18%
10%
20%
15%
(Ministerstwo Gospodarki 2012; Worldwide Tax 2012).
None of them is on the list of problematic FTZ
Restaurants
7%
3%
5%
6%
14%
16%
16%
15%
3%
1%
3%
2%
Cultural
Facilities
2%
1%
3%
1%
Educational
Institutions
6%
3%
9%
5%
5%
4%
2%
4%
Note: the indicator should not be interpreted as if a higher score
is
always better
Tabela
4 than a lower score. Its purpose is rather to
synthesise the intensity of policy measures in a specific field.
• The law allows for the establishment of special
smoking rooms in all of the above-mentioned
places, with the exception of healthcare facilities and
educational institutions (Euromonitor International
2012b, 6). Moreover, institutions such as the WHO
and the Chief Sanitary Inspectorate underline the lack
of enforcement of the law (WHO 2011a; Zadrożna
2011).
(henceforth FTZ) (point 5 in Table 4, p.41) (BASCAP
2012).
Discos and
Clubs
Shopping Centres
Healthcare Facilities
25. The places assessed are healthcare facilities, educational
facilities other than universities, government facilities, indoor
offices and workplaces not considered in any other category,
restaurants or facilities that serve mostly food, pubs and bars
or facilities that serve mostly beverages (not applicable where
alcohol serving is illegal) and public transport (WHO 2011e, 100).
s
g
Tobacco consumption
and sales indicator
Value
• There is a ban on the sale of tobacco products
0 points
•• Regulation of tobacco marketing and promotion is
from vending machines. Article 6 of Law for the
medium in Poland (3 points out of 5, Table 7).
Protection of Public Health against the Effects of
• The sale of tobacco products is restricted to people
aged eighteen years and above. Article 6 Law for
Tobacco marketing and
promotion indicator
1 point
the Protection of Public Health against the Effects of
Tobacco Use of 1995 (point 4 in Table 5, p.42).
• Smoking bans also apply to restaurants, bars and
0.5 points
pubs. The owners and operators of bars, cafés and
restaurants with two or more separate rooms can
designate one of them as a smoking room (point 5 in
0 points
Table 5, p.42) (Euromonitor International 2012b, 6).
Table 6. Perception of smoking incidence in free smoking areas,
February 2011 Survey
Source: Transcrime elaboration on TNS (2011)
Smokers
Non-Smokers
Women
Men
Women
14%
6%
14%
7%
Bars and Pubs
18%
10%
20%
15%
Restaurants
7%
3%
5%
6%
Discos and
Clubs
14%
16%
16%
15%
3%
1%
3%
2%
Workplaces
Shopping Centres
Cultural
Facilities
Educational
Institutions
Healthcare Facilities
1) Ban on tobacco sponsorship
and advertising in radio, TV,
broadcasted programmes
and print media
2) Ban on billboards and
outdoor advertising
and restaurants
0.5 points
Value
1 point
1 point
1 point
1 point
1 point
3) Ban on the display of
tobacco products at
points of sale
0 points
4) Ban on free distribution
of tobacco samples
1 point
5) Mandatory pictorial
health warnings
0 points
Tabela 4
Note: the indicator should not be interpreted as if a higher score is
always better than a lower score. Its purpose is rather to synthesise
Tabela
6 of policy measures in a specific field.
the intensity
• Nearly all forms of tobacco advertising and
sponsorship are prohibited (Article 8 of Law for
the Protection of Public Health against the Effects of
Tobacco Use of 1995), including billboards, TV and
43
Men
T
0.5 points
0.5 points
Table 7. Regulation on tobacco marketing and promotion in Poland
Tobacco Use of 1995 (point 3 in Table 5, p.42).
f
ply
Value
No. of people involved in OC
radio and printed media advertising (WHO 2011d). The
tobacco product advertising ban does not extend to
No. of OC groups
2%
1%
3%
international newspapers and magazines (WHO 2011a)
1%
6%
3%
9%
5%
5%
4%
2%
4%
(points 1 and 2 in table Table 7).
Polish groups
• There is no ban on the display of tobacco products
International groups
at points of sale. Law for the Protection of Public
Health against the Effects of Tobacco Use bans only
Russian-speaking groups
Bus Stops
Public Transport
Sport Facilities
4%
3%
2%
2%
41%
38%
43%
40%
6%
6%
4%
3%
13%
7%
12%
4%
(point 3 in table Table 7).
Tabela 7
POLAND
Public Office
the display of imitations of tobacco products packages
Tabela 5
Tobacco (tonnes)
Total tobacco (tonnes)
Amphetamine
Cocaine (kg)
Heroin (kg)
Hashish
Marijuana
(kg)
Customs
Service
Ecstasy
Regulation
• Article 2 and Article 8 Section 9 of Law for the
Protection of Public Health against the Effects of
Tobacco Use of 1995 prohibit the free distribution of
tobacco products. The promotion of tobacco products
is banned. The Law explicitly mentions the free
distribution of tobacco products in its definition of the
promotion of tobacco products (point 4 in table Table 7,
p.43).
• Tobacco product packaging does not carry
pictorial health warnings (WHO 2011a, 4;
Euromonitor International 2012b, 3). Poland has
ratified the EU Directive 2001/37/EC, so that packages
of tobacco products show verbal health warnings (point
5 in table Table 7, p.43) (WHO 2011a, 4; Euromonitor
In conclusion, Poland has a medium regulation
of the tobacco market, with particularly high
tax incidence of tobacco products. There is
a medium-low level of control on the supply
chain; there is a medium level of control
44
on tobacco consumption and sales, and a
medium-high one on marketing and promotion.
Agreements between OLAF and the major
tobacco companies are crucial for regulating the
sector. Polish free trade zones function well.
THE FIVE
DRIVERS:
CRIME
ENVIRONMENT
P
oland is a safe country with low levels of crime. Corruption and informal economy are
generally moderate. Drug use is low with respect to the overall population, higher among students.
A growing number of organised crime groups are active in the country.
45
5
3.02
93.8
4.09
3.02 2005
2005 2006 2007 2008 2009 2010
2010
86.4
783
744
716
744
683
2004 2005 2006 2007 2008 2009 2010
Crime Environment
744
716
2008
2010
19.3
2006
18.0
14.0
10.9
9.7
9.8
8.3
Corruption
7.2
Source: Transparency
2010 International
41
1.5
1.3
1.4
1.2
56,393
1.3
2009 2010
41
2006 5.3 20095.5
5.0
4.6
2008
2009
2010
58.0*
2011
43
2009
2010
Cigarettes
2011
Low
HRT
4.6
Rank
2008
2010
2012
1.3
2007
1.1
1.4
1.3
1.2
2008 0.6
2009 2010
0.1 0.2
Homicide rate per
100,000 inhabitants
2005 2006 2007 2008 2009 2010
2009
106,291
1.1
2011
2012
0.1
2011
2010
58.0*
Value
176.6
141.7
2012
2011
Rank 93.8
High
86.4
1.1
2008
2.7
2010
High
1.1
0.6
2012
0.1 0.2
Opioids
Cocaine
Cannabis
93.8
2005 2006 200786.4
2008 2009 2010
4.09
Opioids
Tax %
Tax pe
0.1
(last available
year)
2011
3.02
Cocaine
2012
Cannabis
783
744
716
744
683
Low
2008
2010
Organized
Crime Index
2006
2010
52.4
49
41
Crime Index
Source: Van Dijk (2008),
“The World of Crime”
41
41
43
24
Cigarettes
2008
2009
2010
2011
HRT
(last available year)
5.5
5.3
5.0
4.6
2008
2010
238
High
135
2007
58
46 10.9 Composite
Organized
10.9
2008
2009
2010
58.0*
2011
Value
2012
176.6
Rank
Low
141.7
93.8
1.5
Drugs
1.4
1.3
1.2
2.7
1.3
1.1
Annual prevalence of
opioids (18–64), cocaine
and cannabis (18–64) use
Source:
2005 2006
2007 2008 2009 2010
UNODC–World Drug Report
1.1
0.6
0.1 0.2
Opioids
2012
Cocaine
2008
27.7
27.5
Cannabis
27.3 26.9
26.4 26.0
0.31
Indicator of the presence
of market–based
activities that escape the
official estimates of GDP
00s late-2000s
Source: Schneider, Buehn,
Montenegro (2010), “New
Estimates for the Shadow
Economies all over the World”
High
2010
cocaine: 47 out of 99 countries
cannabis: 113 out of 139 countries
26.0
Low
Low
Low
opioids cocaine cannabis
High
(2007)
2002 2003 2004 2005 2006 2007
Low
264.0 263.7 259.6 257.5 263.3 258.7
250.4
2.17
High
opioids: 108 out of 132 countries
0.1
2011
opioids 0.1
cocaine 0.6
cannabis 1.1
86.4
High
Shadow Economy
20
2.7
57,703 61,997
51,102
1.5
Source: UNODC
5.5
5.3
5.0
80,854
50,947
2007
(2012)
2012
1.1
2011
2007
49
41 out of 176
countries
2004 2005 2006 2007 2008 2009 2010
41
41
41
95,358
54,399
Homicides
2007 2008
58.0*
10.9
2008
63,097 59,205
41
24
2008
2010
58
10.9
Value
69,907
2006
31
58
49
Corruption
2004 2005 Perception
2006 2007 2008 2009Index
2010 2011
2008
238
26.0 25.9 25.9
25.6 25.7 25.9 26.4
135
2010
34
9.7
10.9
2010
2008
* Corruption perception index ranged from 0 to 10 until 2011. Since 2012, it ranges from 0 to 100. Highly corrupted countries occupy low
positions in this rank.
University
or higher
• Crime rates are
only
marginally related20.2%
to
CRIME
TRENDS
15-19
Education
Vocational
the bottom 20% of the
population is just 0.2% higher
levels in Poland are low, with significant
31.7%
than that for the top
decreases since 2000 (U.S. Department of State
30-39
2011).
• Poland is the third safest country
23.0%
DRUG CONSUMPTION AND MARKETS
17.0%
(OECD 2012f). All violent crimes, including
•• Drug use is
40.5%
have shown
an overall decrease since 2003
15.4%
20%
30%
40%
50%
House persons in
medium-low
Poland.
27.0%
39.0%
Manual workers
• Cannabis is the most common drug in
Other white collars
Poland32.0%
Manager
although its prevalence
is low. In 2010, the25.0%
35.0%
consumption rateSelf-employed
among adults was 1.1% and ranked
Sellf-positioning
on the social
scale
(UNODC
2012a).
0%
10%
52.0%
Unemployed
among40.0%
OECD
assault, robbery, sexual assault, kidnapping and
60+homicide
39.1%
2012f). 18.8%
Retired
40-49
50-59members
Primary
20%
(OECD
Students
34.3%
Occupation
20-29
•• Crime
26.2%for
economic status inSecondary
Poland, and the assault rate
17.6%
26.0%
Poland 113th out of 139 High
countries.27 Prevalence
among
Female
Male
• Homicide has
recorded a decrease
of Total
6% per year
young adults is much Medium
higher: 18.0% of students29.0%
used
since 2001 (Figure 23). The homicide rate in 2010
Low
cannabis during 2010 with
an increase of 9.6% with 36.0%
was 1.14 per 100,000 inhabitants (UNODC 2011).
Poland ranks 158th out of 187 countries for homicide
rate (UNODC 2011).
0% 2012,
10% 36).
20%
respect to 2008 (Reitox Polish
30%
40%
50%
60%
26
• Cocaine consumption is medium in Poland (47th
Figure 23. Homicide rate per 100,000 inhabitants, 2001-2010
country out of 99). 0.6% of adults reported having
Source: Transcrime elaboration on UNODC Homicide Statistics (2012a)
consumed this substance during 2011 (up from 0.2%
2,000 2012b).
in 2010) (UNODC
100%
1,800
1,600
diffusion
90%
is low. Poland, with a prevalence
80%
1,400 ranks 108 out of 132 countries for
of 0.1% in 2011,
opioids use
1.5
th
1,200
(UNODC
70%
47
2012b).
60%
1,000
50%
• Use of pharmaceuticals
for nonmedical purposes
800
1.0
40%
is singularly 600
high in Poland. Surveys by CINN28 and
30%
KBPN show400
that these psychoactive substances are
29
0.5
20%
more widespread
200 than any other illegal drug (Reitox
0.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
unlawful entry with intent and other theft, show a
03
04
05
06
07
08
09
10
(Table 8, p.48).
• Fear of crime is higher than in most developed
• Despite important fluctuations, drug seizures
Ukraine
increased between 2006 and 2010 (UNODC 2012b).
walking alone at night, below the OECD average of
Seizures give Lithuania
indications on the extent of drug
67%; and 88% of the population consider that they
trafficking. However, they may simply reflect changes
Germany
and peaceful place. While men are at
in law enforcement efforts and the willingness to
greater risk of being victims of assaults and violent
0%
POLAND
countries
(OECD 2012g): 63% of Poles feel safe
Borders
11
a hot spot for the production of synthetic drugs
increased since 2008 (UNODC 2012a).
Belarus
report crimes, not
in illicit activities (NationMaster
crimes, women report higher insecurity due to the
2012).
Territorial waters
fear of sexual attacks (OECD 2012g; Ministry of the
Interior 2012).
Russia
Czech Republic
Airports
0
02
•• Drug seizures are increasing and Poland remains
general decrease since 2001; only burglary has
Internal
liveterritory
in a safe
01
females) (UNODC 2012b,
13).crimes
Recorded
• Property crimes, including motor vehicle theft,
10%
Polish 2012, 37).
0 Young people have particularly high
prevalence rates (11% among males; 24% among
• Heroin
2.0
2.5
10
20
30
40
50
60
70
26. In this ranking, countries with highest homicide rates occupy
2011
2010
the top positions.
27. The ranking has been compiled by Transcrime on UNODC
WDR 2012, taking the
latest available year into account.
Slovakia
28. CINN – Centrum Informacji o Narkotykach i Narkomanii –
5 Addiction.
10
15
20
25
Information Centre for Drugs0 and Drug
29. KBPN – Krajowe Biuro ds. Przeciwdziałania Narkomanii –
2011
2010
National Bureau for Drug Prevention.
30
35
ities
13%
7%
12%
4%
Crime Environment
Table 8. Drug seizures in Poland, 2006-2011
Source: Transcrime elaboration on UNODC (2012b) and Centralnego Biura Śledcze (2010; 2012) data
Amphetamine
(kg)
Cocaine (kg)
Heroin (kg)
Hashish
(kg)
Marijuana (kg)
Ecstasy
(unit)
2011
393.9*
75.5*
6.4*
78.2*
1,211.1*
76,090*
2010
534.3
111.0
24.8
85.4
1,501.1
269,841
2009
421.7
117.5
7.7
17.1
883.4
218,626
2008
342.2
28.7
79.0
114.7
478.4
436,000
2007
423.7
161.0
178.0
33.1
353.0
610,565
2006
332.3
22.0
154.8
34.6
400.8
145,389
Note: *Data report seizures conducted exclusively by the local CBŚ KGP.
Ryc 25
• Seizures of cannabis have increased in recent
years (UNODC 2012b). In 2010, authorities
2010 (UNODC 2012b). However, because of the
intercepted a record quantity of marijuana equal to
high variation across the years it is not possible to
1,501 kg, +70.0% with respect to 2009 (Reitox Polish
determine a clear trend.
2012, 9). Polish cannabis seizures are the eighteenth
482007
2008
2009
2010
2011
4,858
5,118
5,615
6,017
highest in Europe.30
3,692
• According to UNODC, the cultivation of cannabis
348
19
to 534.3 kg in 2010 (+60.8% with respect to 2006).
cultivations often managed by Vietnamese groups
In 2010, authorities seized 269,841 units of ecstasy
(Europol 2011b, 17; UNODC 2012b, 48).
(+85.6% with respect to 2006). These data confirm the
595
385
448
501
551
32
38
36
39
It lies on the northern sub-route of the Balkan Route
5
10
7
centrality of Poland in the manufacturing of ATSs
(mostly amphetamine and ecstasy) (UNODC 2012b,
80; Europol 2011b, 16).
4
(Interpol 2012a). Since the 1980s, the Balkan Route
2007
716
detected twelve laboratories for synthetic drugs and
2012b). Furthermore, also the Silk Route, the
56 professionally organised cannabis plantations
second most important route for heroin, passes
(13 and 61 in 2010 respectively) (Centralnego Biura
through Poland (Interpol 2012b).
Śledczego 2012).
2008
2009
2010
2011
2010. Poland seizures of heroin in 2010 were the 27th
744
783
744
683
•• Unemployment is a key driver of involvement in
crime.
among 42 European countries (Reitox Polish 2012, 9;
UNODC 2012b).
716.0
• In 2011, the Central Bureau of Investigation KGP
cultivations and Western Europe markets (UNODC
• Heroin seizures decreased by 84% between 2006 and
595.0
European seizures of amphetamine (UNODC 2012b,
48); authorities reported the appearance of indoor
547
has been the primary link between Afghan poppy
595
Poland, Spain, Turkey and the UK) account for 90% of
54). In Poland, seizures of amphetamine amounted
500
• Poland is on the main routes for heroin trafficking.
3
• Seven countries (France, Germany, the Netherlands,
herb increased in 2009-2010 (UNODC 2012b,
425
326
2006
• Cocaine seizures increased fourfold from 2006 to
24.2
43.4
134.7
237.7
768.2
826.4
878.7
920.7
• In 2009, 30% of the people arrested for drug
trafficking were unemployed, compared with a national
unemployment rate of 8.2% that year (UNODC 2012b,
88). Moreover, Police identified Roma groups from
Poland trafficking unemployed individuals to the UK,
472
539
573 by Transcrime
509
30. The ranking has been compiled
on UNODC
WDR 2012, taking 2010 data into account.
69
111
115
44
66
56
where they engage in welfare benefit fraud (Europol
2011b, 27).
2006
332.3
22.0
154.8
34.6
0 points
Ryc 25
Table 9. Central Investigative Office of the Polish Police’s prosecution, 2006-2011
Source: Transcrime elaboration on Centralnego Biura Śledcze (2013) data
2006
2007
2008
2009
2010
2011
2,644
3,692
4,858
5,118
5,615
6,017
No. of OC groups
246
348
425
500
547
595
Polish groups
217
326
385
448
501
551
International groups
28
19
32
38
36
39
1
3
5
10
7
4
•• The purchasing of counterfeit products is
ORGANISED CRIME AND CORRUPTION
Tabela 7
widespread.
•• Poland has a medium-high presence of organised
• Annual sales of counterfeit products are around
PLN30 bn and 43% of Poles2005
have purchased
a2007
2006
counterfeit product in their lives. 28% of Poles
do not consider the sale of counterfeit products
536
595
716
unethical, but the social perception of the negative
consequences of counterfeiting is increasing (Szoszuk
Tobacco (tonnes)
and Barchanski 2009; Nowak 2012).
536.0
595.0
716.0
regards
consumer
products
and
425to business-to472
is expanding
539
business goods. Counterfeit goods are both produced
Border
Guard
in Poland
56 from the69Far East111
and imported, mostly
(Szoszuk and Barchanski 2009; Nowak 2012).
Police
55
2010
2011
• Poland ranks medium-high on the composite
744
organized crime index, scoring 52.4 and occupying
783
744
683
43.4
134.7
237.7
65th place among 156 countries (Van Dijk 2008).31
24.2
49
• Organised crime had its heyday in the late 1990s,
in particular luxury goods like handbags; nevertheless,
Customs
Service
the phenomenon
2009
44
66
• The phenomenon also concerns the tobacco market.
In 2011, cigarettes were by far the most frequently
seized products in volume terms among counterfeits
(Ministry of the Interior 2012, 167).
Tabela 8
768.2
but it is still active (U.S. Department of State 2011, 4;
826.4
878.7
920.7
Europol 2011b, 17). This is confirmed by the fact that
prosecutions against members of Organised Crime
573
509
groups (henceforth OC) have constantly increased in
recent years (Table 9) (Centralnego Biura Śledczego
2013).
115
56 the dominant groups consist of
• Among foreigners,
Russians, Vietnamese, Ukrainians, Belarusians,
Lithuanians (Centralnego Biura Śledczego 2012).
• Polish OC groups operate across borders in
drug trafficking, cyber-crime, vehicle thefts, food
counterfeiting and human trafficking. Law enforcement
human trafficking and connected to Poland also in the
Anti-ITTP action indicator
USScores
(U.S. Department of State 2011, 4; Europol 2011b,
17).
1) National Action Plan
against the ITTP
2) Cooperation agreements
between national public
bodies and tobacco
companies to prevent
and control the ITTP
1 point
31. Countries with large amounts of organised crime occupy high
0.5 points
positions
in this ranking.
POLAND
agencies have detected various groups active in
Total
tobacco (tonnes)mainly
• Counterfeiting
crime activity, corruption is medium-low.
2008
Crime Environment
• Poland ranks in a medium-low position on the
Corruption Perceptions Index. It is 41st out of
176 countries (score of 58) and, since 2008, it has
been improving (Transparency International 2012).
However, in 2011 Police detected 3,675 cases of
active bribery, +24.1% with respect to 2010 (Ministry
of the Interior 2012, 221).
• The Polish shadow economy is medium but
decreasing (Schneider, Buehn, and Montenegro
2010). Poland ranked 46th out of 162 countries in a
study measuring shadow economies in 1999-2007
(Schneider, Buehn, and Montenegro 2010).
In conclusion, crime levels are low in Poland
and the country has a medium-low level
of corruption and of informal economy.
Nevertheless, drug trafficking is evolving with
respect to several substances, and there are
a number of organised crime groups in the
country.
50
THE FIVE
DRIVERS:
ENFORCEMENT
T
he effectiveness of Polish law enforcement is increasing. Seizures of illicit tobacco products
are growing because of the increasing involvement of several agencies, European cooperation
agreements and the use of modern anti-smuggling equipment. Penalties for smuggling may be too
low to effectively discourage smuggling.
51
26.9
.35
2.16
2.17
Enforcement
2002 2003 2004 2005 2006 2007
2000s late-2000s
2002 2003 2004 2005 2006 2007
2000s late-2000s
2005
2010
6
2.17
6
2.17
34
26.4 26.0
264.0 263.7 259.6 257.5 263.3 258.7
250.4
0.31
2004 2005 2006 2007 2008 2009 2010
Police
264.0 263.7 259.6 257.5 263.3 258.7
250.4
Police personnel
rate per 100,000
inhabitants
31
264.0 263.7 259.6 257.5 263.3 258.7
250.4
25.6 25.7 25.9 26.4 26.0 25.9 25.9
2010
High
Source: UNODC
05
250.4
2004 2005 2006 2007 2008 2009 2010
2004 2005 2006 2007 2008 2009 2010
2004 2005 2006 2007 2008 2009 2010
05
2010
2006
2009
Low
25.6 25.7 25.9 26.4 26.0 25.9 25.9
31
Judiciary
106,291
95,358
31
1,102
80,854
Professional judges
rate per 100,000
inhabitants
57,703 61,997
6
2009
06
2007
Source: UNODC
2009 2009 2010
2008
2011
2
86.4
57,703 61,997
80,854
95,358
2004 2005 2006 2007 2008 2009 2010
2012
Low
106,291
80,854
57,703 61,997
2008 2009
Tobacco Products
Seizures
2010 2011 2012
52
2008 2009 2010
2006
8
8
2010
86.4
49
41
41
41
5.5
2007
2007
43
24
141.7
135
2008
2009
2010
24 93.843
86.4
Cigarettes
HRT
2008
2009
2010
0.6
2012
Source:
0.1
Cocaine
Cannabis
2012
ids
Cocaine
2011
7.5 years
of imprisonment
2011
HRT
2010
176.6
141.7
Composite indicator
measuring the presence of
0.6 specific policy measures
1.1
0.1
in the country
2011
0.2
ids
2011
238
1.1
0.2
238
135
176.6
2008
Anti–ITTP Action*
2.7
(2011)
43
24
Cigarettes
41
Cig. 683 Kg
HRT 238 Kg
2007
2008783 2009
2010
2011
744
744
716
Cigarettes
HRT 683
783
744
744
716
683
58.0*
1.1
2009 2010 2011
2012
5.50.6 58.0*
5.3
5.0
Value
Rank
0.1 0.2
0.1
2009 2010 2011
2012
2011
2012
Value
Rank
Opioids
Cocaine
Cannabis
2.7
238
58.0*
Likely maximum penalty
for an hypothetical
serious
case of ITTP
41
41
41
683
135
Rank
2.7
5.3
5.0
41
5.5
8
8
744
Penalty
for ITTP
2011
2012
2010 Value
49
783
744
Quantity
2011 2012 of seized tobacco
in Kg per 100,000
inhabitants
41
5.3
5.0
.6
06
2010
2008 2009 2010
06
716
Source: Polish Government
58 86.4
49
High
2004 2005 2006 2007 2008 2009 2010
106,291
95,358
93.8
2
25.9
25.6 25.7 25.9 26.4 26.0 25.9 25.9
Transcrime elaboration
176.6
93.8
141.7 86.4
93.8
2008
86.4
2010
2008
2010
Tax per 1,000
sticks/Int.$,
PPP
2
2/5 points
(2013)
1
Tax per 1,000 sticks/Int.$,
PPP
Cannabis
* The indicator should not be interpreted as if a higher value is always better than a lower value. The objective is rather to synthetically assess
the intensity of policy measures in a specific field.
Total
29.0%
Medium
36.0%
Low
0%
LAW ENFORCEMENT IN POLAND
other countries and ranks Poland 50 out of 81. The
was 261.6 (UNODC 2012c).
1.5
• Policja – Rzeczypospolitiej Polskiej is the backbone
1.0
of the police system. Policja is a centralised force,
which depends directly on the Ministry of Internal
0.5
Affairs (Zgromadzenie Narodowe 2002).
0.0
th
police rate has slightly decreased since 2003, when it
• In addition to the police, the national statute law
40%
50%
60%
2,000
100%
1,800
90%
1,600
80%
1,400
70%
1,200
60%
1,000
50%
800
40%
600
30%
400
20%
200
10%
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
30%
Source: Transcrime elaboration on Ministry of Interior (2012) data
in 2010 was 250.4. This is lower than the average of
2.0
20%
Figure 24. Detected crimes, total number and rate, 2001-2011
• The police personnel rate per 100,000 inhabitants
2.5
10%
01
foresees:
02
03
04
05
06
07
Recorded crimes
08
09
10
Male
Sellf-positio
on the so
scale
Female
0%
11
• Straż Miejska – Municipal police;
• Biuro Ochrony Rządu – Government protection
bureau;
detection.
• Straż Graniczna – Border protection;
• Straż Ochrony Kolei – Railway protection guard;
• Służba Więzienna – Prison service (Zgromadzenie
Borders
•• There are regional differences in crime/crime
• The ratio between recorded crimes and population
Ukraine
is higher in the West and lower in the East (Figure
25,
p.54) (Ministry of the Interior 2012, 10). A
Lithuania
Narodowe 2002).
difference in the crime rate, the detection rate, or a
Internal territory
• The rate of judges per 100,000 inhabitants in
2010 was 25.9. Poland ranks eleventh out of the 73
slightly increased since 2003, when the rate was 24.8
Belarus
• Poland’s prison population has slightly increased
Russia
in the past decade. In 2012, the total number
Czech
ofRepublic
inmates
(UNODC 2012c).
countries surveyed by UN. The number of judges has
Territorial waters
53
Germany
combination of the two may explain this discrepancy.
per 100,000 inhabitants was 222,
corresponding to 85,419 detained persons. It was 208
Airports
• According to the Ministry of Interior, the 2011 overall
0
Slovakia
in 2001 (ICPS 2012). More than half of the countries
crime detection rate was 68.7%. Since 2001, the
0
5
10
15
20
25
30
in the world
have
a prison
population
rate
below
15035
overall2011
detection2010
rate has increased by 14.9% (Figure
per 100,000 inhabitants
2011). In 2010,
2011 (Walmsley
2010
10
20
30
40
50
60
70
24) (Ministry of the Interior 2012, 8).
Poland with a rate of 215.2 ranked 33rd out of 103
countries.32
20%
18%
Every day
10%
12%
9.2
7.5
8%
3%
Less often
0%
20%
15%
20%
25%
30%
35%
2.2
2%
32%
10%
7.1
4%
14%
Never
7.4
6.1
6%
Once a month
5%
15.5
12%
7%
Once a week
0%
17.2
14%
2%
Twice a week
Every two weeks
16%
POLAND
Every other day
9%
40%
Primary
Vocational
Secondary
32. The ranking has been compiled with data from the United
Nations Survey on Crime Trends and the Operations of Criminal
Smuggled cigarettes
Cheap cigarettes
Justice Systems (CTS), taking
the latest available year
from
2004 to 2010 into account.
Higher
Enforcement
Figure 25. Recorded crime per 100,000 persons, 2011
Pomeranian
Warmian-Masurian
West Pomeranian
Podlachian
Kuyavian-Pomeranian
Masovian
Greater Poland
Lubusz
Lódz
Lublin
Lower Silesian
Swietokrzyskie
Opole
Silesian
Lesser Poland
Subcarpathian
Crime detection rate 2011
1800 - 2400
54
2401 - 2950
THE FIGHT AGAINST THE ITTP IN
2951 - 3350
POLAND
3351 - 4070
•• The Customs Service is mainly responsible for the
• Policja – Rzeczypospolitiej Polskiej – Police
concentrates mainly on the detection and closing
down of illegal manufacturing facilities and storage
places of illicit cigarettes (WHO 2009, 34).
fight against the ITTP (WHO 2009, 33).
• SC – Służba Celna – Customs Service manages the
legality of imports and exports. With EU accession,
Poland’s eastern borders became EU external
borders, with the consequence that the importance of
the Customs Service increased (Lisicki 2008; Ministry
of Finance 2012b).
• The Customs Service is responsible for the fight
against the ITTP on the external borders of the
EU and within Poland. For this purpose, specially
equipped mobile control units inspect roads, markets
and trade fairs, rail transport vehicles, business
buildings and private land (see box Anti ITTP new
equipment) (WHO 2009, 34).
• The mounting scale of the ITTP and the increase in
illegal cigarette manufacturing have led to greater
involvement by other law enforcement agencies
in addition to the Custom Service (WHO 2009, 33;
Niemczyk 2013).
ANTI ITTP NEW EQUIPMENT
In 2010, the government spent PLN133 mn on
modern smuggling detection equipment, new
electronic communications and control centres
(Lentowicz 2010). In 2011, the first European X-ray
scanner became operative in Medyka along the
Polish-Ukrainian border. It provides high quality
images facilitating the control of trains and cargoes
(PRKiI S.A. 2013). A second stationary scanner will
be installed on the border with the Russian exclave
of Kaliningrad (Lentowicz 2010).
In the area around Budzisko, in the border region
between Poland and Lithuania, customs officers
are equipped with mobile X-ray and licence plate
reading systems (WHO 2009, 35; Lentowicz
2010; B&S Europe 2012). The authorities are also
considering the recruitment of additional customs
staff and the training of more sniffer dogs (Ministry
of Finance 2012c).
ip
,
Value
Amphetamine
(kg)
Cocaine (kg)
Heroin (kg)
Hashish
(kg)
393.9*
75.5*
6.4*
78.2*
1 point
2011
• CA – Departament Kontroli Celno-Akcyzowej i
Kontroli Gier – Customs-Excise Control and
• KGZ – Krajowa Grupa Zadaniowa ds. Wyrobów
Tytoniowych – National Task Force on Combating
2010
1 point
Gambling Control Department supervises the
controls conducted by the Customs Service and
534.3
Finance 2012c).
2008
• SG – Straż Graniczna – Border Guard has a double
1 point
task
2007
cross-border crimes such as illegal immigration,
0 points
trafficking
117.5
7.7
17.1
342.2
28.7
79.0
114.7
178.0
33.1
423.7
161.0
“Interministerial Working Group for countering
cigarette-smuggling”. Experts from the Police, the
2006
332.3
22.0
154.8
34.6
Customs Service, the Border Guard Service and tax
in human beings and smuggling (Europol
2013).
421.7
• Moreover, the government has set up an
since it patrols borders and territorial waters and
traffic on the borders. The Border Guard investigates
85.4
trafficking (Pawlak-Żalikowska 2010; Ministry of
0 points
treasury crimes (Ministry of Finance 2012a).
24.8
smuggled cigarettes and on goods used to mask
2009
audits proceedings and official inspections related to
111.0
Tobacco Smuggling collects information on
authorities cooperate to optimise their operations
through the exchange of information and the
Ryc 25
coordination of search and control operations (WHO
• PC – Departament Polityki Celnej – Customs Policy
2009, 34).
Department cooperates with the EC and the Council
•• Polish law enforcement cooperates with
of the EU to shape common customs policies. It
coordinates activities related to legislative work and
2006
law (Ministry of Finance 2012e).
2,644
international agencies.
2007
2008
3,692
4,858
implementation of community and domestic Customs
2011
5,118
5,615
6,017
European and international law enforcement agencies
No. of OC groups
246
348
responsible for inspections of the
Customs Union’s
425
external borders (RILO 2010). They monitor bazaars,
Polish groups
326
markets, postal-courier services217
and roads. They
is developed through Europol, Interpol, World
595
Customs500
Organization 547
(WCO), Schengen
and special
Action plans to fight against smuggling of cigarettes
385 and
devote particular attention to roads leading into
448 along the EU
501 Eastern border.
551 According
alcohol
36
39
particular,38has created important
opportunities
to act
against the ITTP (RILO 2010; European Commission
3
5
10
2011; Europol
2013).33
7
4
Tabela 7
Table 10. Seizures of smuggled cigarettes and raw tobacco, 2005-2011
Source: Transcrime elaboration on Ministry of Finance (2012b) and Ministry of Interior (2012) data
2006
2007
2008
2009
2010
2011
536
595
716
744
783
744
683
24.2
43.4
134.7
237.7
768.2
826.4
878.7
920.7
509
Tobacco (tonnes)
Total tobacco (tonnes)
536.0
595.0
716.0
Customs Service
425
472
539
573
Border Guard
56
69
111
115
Police
55
44
66
56
33. Interview with Mr. Wolfgang Schmitz on 25th March 2013
Tabela 8
POLAND
2005
32
2012c).
1
55
to the German Customs Criminal Office, Schengen, in
28 (Ministry of Finance
19
and Scandinavia
2010
• Cooperation of Polish law enforcement agencies with
• IC – Izba Celna – Customs Chambers are
International
groups
Western Europe
2009
60%
50%
Enforcement
40%
21.3%
East
31.3%
South
30%
20%
• Poland has taken part in several Joint Customs
0%
Operations
(henceforth
under2011
the 2012
coordination
2002 2003 2004
2005 2006
2007 2008 JCO)
2009 2010
0%
of the European
Anti-Fraud Office
(OLAF). Operation
Mid-Priced
Premium
Total
Education
Secondary
improved
26.2%
(see box Interception
techniques), as
39.1%
evidenced by the ever larger number
of seizures
Vocational
18.8% 2009, 36; Warsaw Business
(Table 10, p.55) (WHO
Primary
23.0%
Students
Journal 2011).
Occupation
27.0%
OPERATION BARREL
House persons
Manual workers
travel history. We have systems that log licence
Sellf-positioning
on the social
scale
behaviour. And we also look out for changes
to
100%
and the smuggling
of synthetic drugs on trains
25.0%
the EU’s eastern border
35.0% between Ukraine
26.0%
29.0%
JCOs target smuggling and
customs fraud in
Medium
(EUbusiness
90%
70%
•• Size of seizures is decreasing.
• In recent years, the Customs Service has reported
40%
more individual disclosures than previously, while
20%
is particularly evident in regard to disclosures made
10%
in road transport, bazaars and markets (Figure 26)
0%
(Ministry
of the Interior 2012, 181).
2004 2005 2006 2007 2008 2009 2010
8.2% less than in 2010, when interception amounted
to 744 mn sticks (Table 10, p.55) (Ministry of the
Interior 2012, 181).
containers arriving in EU ports with cargo from third
countries). JCOs improve cooperation between
countries in tackling smuggling and customs fraud.
Twenty-four EU Member States participated in
5,000
100%
1,800
90%
4,500
80%
4,000
Customs Service and OLAF. The European
Customs Union (TAXUD), Europol, Frontex and the
1,200
60%
World Customs Organization supported this JCO.
1,000
50%
The operation took place from 18 to 27 October 2011
800
40%
and resulted in the interception of 1.2 mn
cigarettes
600
30%
(European Commission 2012a).
400
200
01
03
04
05
06
07
08
09
10
9.29
6.38
3,500
3,000
2,000
2.59
1,500
Russia
3.00
10%
500
1.00
0
0.00
11
2.00
2008
Crime detection
rate that Poland
Service
reported
2009
Number of seizures
14
12
the detection rate in these parts of the country
e of 20-cigarettes pack (PLN)
Belarus
4.00
3.30
1,610
not on the borders, Government’s goal is to increase
Germany
5.00
1,000
the supply of illegal cigarettes in the regions that are
(Niemczyk 2013).
6.00
2,045
• Law enforcement agencies seize approximately 1% of
Lithuania
9.00
7.00
2,517
2,500
intercepts 3-5% of the ITTP (Niwserwis 2011, 6).
Ukraine
10.00
8.00
than 10% of smuggled tobacco products per year.
Recorded
crimesCustoms
The British
4,475
20%
• The Customs Service estimates that it0%detects more
02
Number of Seizures
70%
Commission’s Directorate General for Taxation and
1,400
0
Figure 26. Customs Service’s disclosures of cigarettes in bazaars
and markets, 2008-2011
the operation under the coordination of the Polish
1,600
2011 2012 2013
• In 2011, the authorities seized 683 mn cigarettes,
0%routes
10%(e.g.
20%
30% trains
40% from
50% Asia,
60% ship
trade
incoming
2,000
2010).
80%
Low
36.0% problematic
high-risk
areas or along identified
56
a vehicle’s construction”, Kuzia explained
intercepting smaller amounts of cigarettes. This trend
39.0%
Operation Barrel was the first
32.0%JCO to target the
and
High Poland.
plates. We are good psychologists, spotting nervous
30%
Other white collars
crossing
Self-employed
Male
50%
52.0%
Unemployed
ITTP
Manager
50%
60%
17.0%
Retired
Female
40%
it is based on risk analysis, for example, a person’s
•• Detections of smuggled tobacco are increasing.
20.2% in combating the ITTP has
agencies
30%
said watch commander Mariusz Kuzia. “Above all
Operation Barrel) (Kasperkevic 2012; OLAF 2013).
enforcement
20%
“We stop around five or ten per cent of vehicles”,
Barrel is an example of these actions (see box
• Year by year, the effectiveness of the Polish law
10%
INTERCEPTION TECHNIQUES
10
8
6
4
2010
2011
Economy
29.0%
Central
10%
Sellf-po
on the
sc
31.7%
12
60+
and
10
40.5%
2011. In 2009, the tobacco market underwent
15.4%
major reforms intended to reduce public interventions
1.5
0%
8
10%
20%
30%
and the distortion of competition (Ministry of the
6
Female
Interior 2012,
182).
1.0
Male
50%
0
(Figure
in terms
of value,
76.7% 2011
in
2006 26, p.56);
2007 76.3%
2008
2009
2010
terms of volume (2011 data) (Ministry of the Interior
184).2005
In 2011,
the seizures
of
2001 2002 2012,
2003 2004
200638%
2007of2008
2009 2010
27.0%
90%
1,600
Manual workers
• In 2011, the value of seizures on Polish
Other white collars
1,400
Manager
39.0%
80%
32.0%
territory
70%
25.0%
decreased by 46.0%. Interceptions at airports
1,200
60%
35.0%
Self-employed
increased by 20% in the same year, but they are still
1,000
High
50%
26.0%
800
cigarettes
600
Medium
40%
29.0%
30%36.0%
Low
400
0% of the
10% ITTP
20%
• In 2010 and in 2011, detection
30%
200
20%
40%
0
0%
Belarusian
to the
and08on09
the 10
German
01 borders
02 03 04
05 East
06 07
11
ones (Figure 27). Poland reported the highest number
suggests a partial substitution between Ukraine
Figure
2.0 27. Detections of smuggled cigarettes on the EU’s external
borders, 2010 (inner ring) – 2011 (outer ring)
38% 35%
1,800
(Ministry of the
90%
Lithuania
Germany
60% 58%
80%
70%
1,200
60%
1,000
50%
800
40%
600
30%
400
20%
57
200
Belarus
0
Russia
10%
01
03
04
05
06
07
08
Recorded crimes
Czech Republic
Airports
02
09
10
10
20
30
40
50
60
0
70
Figure 28. Value of seizures by place of detection, mn of PLN
2011
5
10
2011
2010
15
20
25
30
35
2010
Ukraine
•• Law enforcement agencies have closed down a
Borders
significant number
Lithuaniaof illicit tobacco factories.
20%
28%
Germany
Internal territory
Every day
• The Police18%
closed17.2
down more than forty illegal
9%
7%
16%
12%
Airports
3%
12%
0
Once a month
10
14%
Never
2006
2007
30
2010
20%
0%
2008
40
50
5% 10% 15% 20% 25%
2009
2010
2011
2012
7.5
raided the largest
illicit cigarette factory
ever 7.4
8%
Slovakia
60
70
0
5
10
15
20
25
bound for Western
countries,
together
with
50 tonnes
4%
of tobacco 2%
in a warehouse near Warsaw
(Euromonitor
2011
2010
International
0%2013c, 44).
4%
Primary
40%
Vocational
Smuggled cigarettes
20%
ITTP penetration
18%
Every day
Every other day
Twice a week
30%
9%
16%
14%
2%
7%
7.1
6.1
discovered.6%Agents found more than five mn cigarettes
32%
30%
0% 35%
Russia
Czech Republic
10%
• In 2011, Poland's
Central Bureau
9.2of Investigation
8%
2011
Less often
2005
20
12%
ITTP penetration
Twice a week
Every two weeks
14% of 2013 (WHO 2009, 34; Policja 2013).
three months
20%
POLAND
Every other day
2%
Territorial waters
Once a week
15.5
16% facilities
manufacturing
Belarus between 2005 and the first
24%
0%
Slovakia
0
11
Eastern
2001 2002 2003 2004 2005 2006 2007
2008Balkans
2009 2011
2010
Territorial waters
100%
Ukraine
Internal territory 0.5
0.0
(-17.4%) and2,000
Lithuania (+51.1%) as source countries
4%
5%
Figure 29. Value of seizures
by detection border, mn of PLN
1,400
1.5
1.0
Recorded crimes
1,600
Source: Transcrime elaboration on JCO Focal Points Land (2010; 2011) data
60%
concentrated on Poland’s Ukrainian, Lithuanian and
border to the West (Figure 29). The trend of seizures
smuggling incidents (Frontex 2012).
50%
10%
along the EU’s borders occurred along its eastern
2.5of
Borders
1,800
184).
• 2Most seizures occur on the external borders
52.0%
of
tobacco seizuresUnemployed
in recent years (Table 10, p.55)
2,000
100%
marginal (Figure 28) (Ministry of the Interior 2012,
Total
4
0.5
0.0
40%
23.0%
House persons
(Ministry of the Interior
2012, 181).
of raw tobacco
increased by 210.4%
13.43
between 2009
and 2010 and by 76.5% between 2010
11.23
2.0
18.8%
16
• Seizures
13.46
50-59
14
30%
• The Customs Service’sRetired
activities account17.0%
for 70-80%
2.5
20%
40-49
18
10%
Vocational
Primary
34.3%
18.26
17.43
have boomed.
16.05
40.0%
•• Seizures of raw tobacco
Secondary
20.2%
36.0%
26.2%
40%
50%
60%
39.1%
Students
30-39
20
0%
Occupation
20-29
Education
17.6%
Low
Sellf-positioning
on the social
scale
15-19
29.0%
Medium
12%
17.2
15.5
Secondary
Cheap cigarettes
30
2.2
Higher
35
Enforcement
•• Prosecutions against criminals involved in the
• The anti-ITTP fight expanded to the internet. Law
ITTP are increasing.
enforcement agencies monitor the web to identify
traffickers. Once they have detected a meaningful
• In 2011, authorities initiated 1,753 prosecutions for
number of suspects they operate to dismantle their
ITTP-related crimes (+6% on 2010). These cases
networks (Niemczyk 2013). At the end of 2008,
involved 1,704 defendants; 1,092 persons were
the number of cigarettes that an individual can
convicted (Ministry of the Interior 2012, 180).
import into Poland was reduced from 200 to 40
(EUbusiness 2010). Customs law states that air and
•• Poland introduced some reforms to discourage the
ITTP.
• In 2007, the government extended penalties to all
actors involved in the ITTP. The purpose was to
induce retailers to buy cigarettes only from legitimate
wholesalers. The acquisition, storage, transport
tobacco products into Poland:
• 200 cigarettes or
• 100 cigarillos (cigars of a maximum weight of three
g each) or
• 50 cigars or
and transfer of cigarettes without excise stamps are
• 250 g of smoking tobacco.
crimes in Poland (see box Hypothetical case). The
The law allows land and train travellers to bring
previous legislation did not penalise retailers caught
smaller quantities into the country:
selling smuggled cigarettes if they could prove that
• 40 cigarettes or
they were unaware of the illicit source of the products
(Euromonitor International 2012b, 11; Drewnowska
and Lentowicz 2011b).
58
sea travellers can bring the following amounts of
• Custom Services undertook a series of anticorruption
• 20 cigarillos or
• 10 cigars or
• 50 g of smoking tobacco (Ministry of Finance
2012f).
actions such as changing the whole crew of patrols at
some border crossings (Niemczyk 2013).
HYPOTHETICAL CASE
A criminal organisation composed of eleven members used a house in the periphery of a large city as an illicit
factory for the production and distribution of tobacco products. For at least sixteen months, with a clear division
of tasks and functions among them, the members of the organisation illegally manufactured tobacco products
(cigarettes and hand-rolling tobacco); packed them in packaging bearing false trademarks of legitimate brands
(produced by the same organisation); distributed the products to various wholesalers and retailers; sold the illicit
products through a network of bars and street sellers. No tax or duty was ever paid on these products. The law
enforcement agencies seized a total of ten tons of illegal tobacco products stocked inside the house. All the
members of the organisation had previous records for fraud, forgery and illicit trade in tobacco products. The
members could not justify their incomes through any form of employment, suggesting that the illicit business was
their sole source of income.
Under Polish law, there are several offences applicable to the above case. They relate to the following areas:
1.Criminal organisation
2.Manufacturing tobacco products without registration
3.IP infringement
4.Tax offences
5.Health protection against consequences of using tobacco
1. Criminal organisation
Pursuant to Article 258 § 1 of the Polish Criminal Code, any member of an OC group intent on committing criminal
or penal fiscal offences may be imprisoned for between three months and five years (up to seven years and six
months of imprisonment if the offence is committed by a recidivist).
More severe penalties apply to the leaders of OC groups. According to Article 258 § 3 of the Polish Criminal Code,
penalties for leaders range from one to ten years of imprisonment (up to fifteen years if the offence is committed by
a recidivist).
The Polish Criminal Code does not clearly define the notion of OC group or association. According to Polish
jurisprudence:
•the organisation must have at least three members,
•the members must operate with the intention of committing offences,
•there must be an organisational structure among the members,
•there must be a leader of the group.
Considering that the members of the criminal organisation as described in the scenario had criminal records, it is
likely that the penalties would be increased due to their recidivism.
2. Manufacturing tobacco products without registration
Polish law states that the manufacturing of tobacco products requires enrolment on the register of manufacturers of
tobacco products (see Regulation, p.37).
Article 12a, sec. 1 of the Act on Production of Ethyl Alcohol and Tobacco Products sanctions the manufacturing of
tobacco products without registration with a fine, limitation of liberty (public work) or imprisonment for up to one
59
year. Owing to the significant value of the goods manufactured, the penalty could be increased (imprisonment for
Moreover, according to Article 14 of the Act on Production of Ethyl Alcohol and Tobacco Products, if the offence is a
regular source of income for a perpetrator, the latter may be imprisoned for up to three years. The machinery and
key components used in the illicit manufacture may be forfeited.
Since the perpetrators described acted as members of a criminal organisation and had previous records, the court
may increase the penalties by up to 1.5 times the maximum statutory limits.
3. IP infringement
In compliance with Article 305 sec. 1 and 3 of the Industrial Property Law, the counterfeiter may be subject to
imprisonment for up to two years (up to five years, if the offence concerned products of a significant value or
became a regular source of income). Fines for counterfeiting may reach PLN1,080,000 (about US$330,815).34
Since the perpetrators described acted as members of a criminal organisation and had previous records, the court
could increase the penalties by up to 1.5 times the maximum statutory limits.
components are obligatorily forfeited and destroyed.
4. Tax offences
Tax evasion incurs imprisonment for up to five years (up to ten years if the offence results in a significant loss of
revenues for the Treasury), or a fine of up to PLN14,400,000 (about US$4.4 mn)35 or both (Article 54 § 1 of the
Penal Fiscal Code).
34. PLN/US$ European Central Bank exchange rate at 31.03. 2013.
POLAND
Article 306 of the Industrial Property Law states that the machines used for counterfeiting as well as key
up to two years).
Enforcement
According to Article 69a § 1 of the Penal Fiscal Code, the storage and manufacturing of tobacco products with
infringement of the trading conditions for excise goods is subject to imprisonment for up to two years (up to four
years if the offence results in the Treasury’s significant loss of revenues), or a fine of up to PLN 14,400,000 (about
US$4.4 mn)36 or both.
Pursuant to Article 31 § 6 of the Penal Fiscal Code, the destruction of tobacco products subject to penal fiscal
offences is mandatory.
5. Health protection against the consequences of using tobacco
Article 12 of the Act on Health Protection Against Consequences Of Using Tobacco And Tobacco Products states
that manufacturing tobacco products not meeting legal quality standards is subject to a fine of up to PLN 200,000
(about US$61,262) and/or limitation of liberty (public work).37
Penalty imposed on the perpetrator for criminal and tax offences
Pursuant to Article 8 § 1 of the Penal Fiscal Code, in the case of criminal and tax offences the court shall apply both
the provisions of criminal law and the those of penal fiscal law.
When sentencing the perpetrator for each offence, the court shall decide whether to apply the most severe penalty
among those available (Article 8 § 2 of the Penal Fiscal Code). This regulation does not exclude the application of
punitive measures (e.g., forfeiture) or a cumulative fine (comprising all applicable fines for the offences committed).
Sentencing for several criminal acts (cumulative penalty)
In case of multiple offences, the court imposes an aggregate penalty for all the offences. The aggregate penalty
must remain within the limit for the most serious offence and cannot exceed 15 years of imprisonment (Article 86 of
60
the Criminal Code). This does not prevent the court from imposing other sanctions (e.g., forfeiture, obligation to pay
damages).
If the offender has committed two or more similar offences within a short period of time (“serial offences”), the court,
at its own discretion, can impose one “penalty” for all the similar offences, but the upper limit of the penalty can be
increased by half (Article 91 of the Criminal Code).
In the scenario, the court is likely to impose an aggregate offence for all the offences. Considering that the criminals
committed serial offences and they have previous criminal record for similar offences, they may face a maximum
penalty of 7 years and six months of imprisonment and a judicial fine whose evaluation depends mainly on the
Treasury’s loss of revenues due to the criminal activity. It can theoretically reach US$4.4 mn.
According to Article 33 § 2 of the Criminal Code, the court may impose an additional penalty of a fine alongside the
penalty of imprisonment if the perpetrator committed the offence for financial purposes, or financially benefited from
the offence. The fine is calculated in daily rates (up to 540 daily rates), and a daily rate shall not be higher than PLN
2,000 (US$613)38 (Article 33 § 1 and 3 of the Criminal Code).
37. Articles 8b, 9 and 10 of the Act on Health Protection Against Consequences Of Using Tobacco And Tobacco Products state
that tobacco manufacturers must fulfil quality standards and place health warnings on packaging.
38. PLN/US$ European Central Bank exchange rate at 31.03.2013.
cks)
nnes)
2005
2006
2007
2008
2009 Chapter
2010
2011
1: The Five
Drivers
536
595
716
744
783
744
•• Anti ITTP action in Poland is medium-low, with 2
points out of 5 (Table 11).
24.2
43.4
134.7
595.0
716.0
826.4
878.7
••536.0
Poland is
implementing
its768.2
second national
action
683
Table 12. Measures against the ITTP in Poland (2008-2011)
237.7
Source: Transcrime elaboration on KPMG (2012)
920.7
2008
2009
2010
2011
8.2
11.8
10.6
10.6*
-
10.0
12.5
15.0
plan against the ITTP.
425
472
539
573
• The Ministry of Finance estimated that Poland lost
56
111
115
PLN3.3
bn69in 2009 because
of the ITTP. In the same
year the Government consequently launched the first
National
Action
Plan66against the ITTP: the “Customs
55
44
56
Service Strategy for the fight against smuggling and
ITTP for the years 2009-2011” (henceforth Strategy
2009-2011) (Ministry of Finance 2012c).39
509
Actual Market Share
Projected Market Share
Note:* 2011 value is estimated on the basis of the first ten
months
• Strategy 2009-2011 was based on three strategic
objectives:
• reduction of the supply of illicit tobacco products on
Table 11. Measures against the ITTP in Poland
the domestic market,
• prevention of the smuggling of tobacco products
from Poland to the EU,
Anti-ITTP action indicator
Scores
Estimate
• achievement of public support for
the implementa-
2001
15.5
16.0
-
-
EU Flows Model
-
61 -
KPMG
-
-
tion of the Strategy (Ministry of Finance
2012c, 4).
Euromonitor
International
1) National Action Plan
against the ITTP
1 point
•• 2009-2011 anti-ITTP Strategy has been effective:
Empty Pack Survey
• The actual market penetration of illicit products
remained below the level projected by the experts
(Table 12) (Ministry of Finance 2012c, 5; Niemczyk
2) Cooperation agreements
between national public
bodies and tobacco
companies to prevent
and control the ITTP
2013).
0.5 points
• More effective patrolling of the Polish borders
caused a decrease in the number
of Russian
Seizure
estimate and
(Poland)a,c
Ukrainian packs of cigarettes disclosed in the EU
Seizure
estimate
during 2009 and 2010 (Ministry of
Finance
2012c,
5).
3) National public awareness
campaign against the various
forms of the ITTP
0 points
(UK)b,c
• The large number of applicationsJoossens
filed byetcitizens
al.
through the National Customs Service Phone Intervention testifies to increasing public
awareness of
Gembicki
the Strategy (Ministry of Finance 2012c, 6).
4) Legal duty for tobacco
manufacturers not to
facilitate smuggling
-
-
-
-
• Analysis of the results of StrategyTabela
2009-2011
11
0.5 points
prompted a second campaign. The Strategy for
2012-2015 pursues the first two objectives of the
in order to reduce the “grey area” of exchanges in
5) Official estimates of the
size of the ITTP
0 points
tobacco products (Ministry of Finance 2012c, 15).
-
-
-
-
POLAND
previous strategy. However, it introduces modifications
2000
Belarus
Note: the indicator should not be interpreted as if a higher score
Tabela
9 than a lower score. Its purpose is rather to
is always better
Ukraine
synthesise the intensity of policy measures in a specific field.
Russia
39. Strategię działania SłuŜby Celnej w zakresie zwalczania
przemytu i nielegalnego obrotu wyrobami tytoniowymi na lata
2009-2011.
Moldova
Other co
Tabela 12
Enforcement
• The strategy foresees a series of activities and
•• In Poland, there is no specific legal duty
intermediate objectives necessary to achieve the two
for tobacco manufacturers not to facilitate
main targets:
smuggling. However, the four major tobacco
• improving controls with the use of X-ray equipment,
companies have signed agreements with the EC,
• monitoring the southern borders,
• introducing constant practices for the confiscation of
property from people involved in smuggling,
• improving cooperation with the customs of other EU
countries,
represented by OLAF. The Parties aim to eliminate
the ITTP on the EU’s territory and to assist the law
enforcement agencies (WHO 2009, 35; Sieber 2010,
90). Moreover, Polish law prohibits everyone, and
therefore also tobacco manufacturers, from smuggling
and supporting smuggling (Point 4 of Table 11, p.61).
• implementing risk analyses,
• strengthening the control of postal and courier services,
• increasing controls in bazaars and markets,
• implementing e-commerce control,
• and many others (Ministry of Finance 2012c).
•• There are no official yearly estimates of the ITTP
in Poland (Ciecierski 2007; Euromonitor International
2012c, 11). However, the Ministry of Finance provides
some rough estimates of the tax loss caused by the
ITTP (see The Products, p.72) (Point 5 of Table 11,
p.61) (Ministry of Finance 2012c).
•• In Poland, there are no specific agreements
62
between national public bodies and tobacco
In conclusion, the effectiveness of Polish law
companies to prevent and control the ITTP.
enforcement is increasing. Nevertheless, anti-
However, Poland has entered into agreements
ITTP action is medium low. There is neither a
between the EC, represented by OLAF, and major
national public-awareness campaign against
tobacco companies. The Parties aim to eliminate
illicit tobacco products nor official data on
the ITTP on the EU’s territory and to assist law
the ITTP. Further, penalties for smuggling may
enforcement agencies (WHO 2009, 35; Sieber 2010,
be insufficient to discourage involvement in
90). Manufacturers have undertaken to supply only
the ITTP. However, seizures of tobacco are
quantities required by the legitimate market, ensure
increasing also due to European cooperation
that they sell to legitimate clients, and implement a
agreements and the deployment of cutting-edge
tracking system (Point 2 of Table 11, p.61) (European
equipment.
Commission 2004; European Commission 2007;
European Commission 2010a; European Commission
2010b).
•• Currently there are no nation-wide publicly-funded
awareness campaigns against the ITTP.
• There is no evidence at present of any nationwide
information campaign. The Polish authorities
promoted an awareness campaign on the ITTP within
Strategy 2009-2011. The promoters used posters,
leaflets, brochures, etc. and shared communication
efforts with social actors like ecclesial communities.
Experts labelled the campaign as unsuccessful
(Niemczyk 2013). Strategy 2012-2015 does not
foresee similar initiatives, but other actions are in the
planning phase (Point 3 of Table 11, p.61) (Ministry of
Finance 2012c; Niemczyk 2013).
63
POLAND
THE FOUR
COMPONENTS
This chapter analyses the four components of the
• For a number of years, the Polish government has
ITTP. The components are the various elements of the
raised excise duty at a rate exceeding inflation
illicit tobacco market, and their analysis highlights the
(see Legal market, p.27) (WHO 2009, 36). Price
complexity, diversity and dynamism of the ITTP.
increases have generated a downtrading trend
THE DEMAND
•• Price is the key driver of the purchase of illicit
toward cheaper and illicit products (see Legal market,
p.27) (Euromonitor International 2012b, 11, 27).
• Euromonitor International data on the penetration of
tobacco products in Poland (Message House
the illicit market evidence a link between increasing
Agencja PR 2006, 60).
prices and the expansion of the ITTP (Figure
30, p.66) (Euromonitor International 2012b, 11;
Euromonitor International 2012a). Several observers
confirm this relationship (WHO 2009, 35; Drewnowska
and Lentowicz 2011b; Tyszka 2012).
65
1.00
0
2008
2009
2010
Number of seizures
Ave
500
0.00
The four components
2011
Figure 30. Price of cigarettes and ITTP penetration in Poland, 1997-2012
14
28%
12
24%
10
20%
8
16%
6
12%
4
8%
2
4%
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
Price
2006
2007
2008
60%
30%
Share of non-domestic packs, %
House Agencja 25%
PR 2006, 60) and their availability
50%
• According to surveys:
is increasing due to the high returns on the ITTP
40%
• price is extremely important in the choice of a ciga-
R² = 0.4003
rette brand for 79% of Poles (65% in EU) (European
30%
15%
menthol cigarettes
10% indicates that 80% of interviewees
• 45.8%20%
of Poles would purchase better-priced smug-
have noticed street vendors. 9% of the sample see
gled cigarettes (Ciecierski 2002, 31),
5% day (Figure 31, p.67) (Coelho
street retailers every
10%
• most consumers of illicit tobacco purchase it
only because
of the lower price (Message House
0%
1,000
1,500
Agencja PR 2006, 60).
2,000
2,500 3,000
3,500
and Arink 2013, 30). Around 23% of the respondents
4,000 4,500
• Times-series analyses indicate that the price elasticity
of demand for tobacco products is around -0.115 in
Poland; hence a 1% increase in prices would cause
a 0.1% decline in legal sales. Short-run elasticity is
heavier (-0.4) (Ciecierski, Cherukupalli,
3.29 and Weresa
3.16
2011a). These studies do
2.91not consider displacement
2.0
1.5
1.0
0.5
0.0
2011
Euromonitor
International
months. Within the EU only
Lithuania
(36%) and
Greece (25%) had
Seizure estimate (UK)
cigarettes on
the streets. 1% does it usually (Figure
100%
31, p.67) (Coelho
and Arink 2013, 30).
90%
2.31
2.44
26.4
70%
50%
1.28 1.29
smokers,
people with lower education, and inhabitants
40%
rural areas, the share of people quitting because of
20%
the population (The Maria Skłodowska-Curie Institute,
10%
Medical University of Warsaw, and Centers for
2009
2010
Disease Control and Prevention 2010).
Euromonitor International-KPMG
Gembicki
2011
53.6
30%
tobacco’s unaffordability is higher than in the rest of
2008
(Joossens et al.
EU Flows Model
Seizure estimate (Poland
2009,
cigarettes, 45% of the respondents have ever bought
stop smoking1.55
after health concerns. Among young
2007
11
• According to the survey on consumers of menthol
60%
2006
KPMG
higher
rates
Empty Pack Survey
21).
• High prices of cigarettes are the second reason to
0.85of
07 08 09 10
80%
to the illegal market.
2.18
0%
to a survey conducted
had01noted
the04selling
97 in982008
99 00
02 03
05 06
of smuggled tobacco products in the previous six
Recorded crimes per 100,000 persons
•• Higher prices
reduce Region
tobacco consumption.
Subcarpathian
2009
2010
2.5
20%Lentowicz 2011b).
(Drewnowska and
• A survey conducted in 2013 among consumers of
Commission 2012b),
3.0
0%
• Illicit cigarettes are easy to reach (Message
Lisicki 2009, 9; Euromonitor International 2012b, 11).
3.5
2012
its demand.
them valid alternatives (Joossens et al. 2009, 36;
500
2011
•• The high availability of illicit tobacco influences
retail selling prices, and most consumers consider
0
2010
ITTP penetration
• Illicit products price are around 65% lower than
66
2009
ITTP penetration
Source: Transcrime elaboration on Euromonitor International (2013a) and European Commission (2013) data
0%
Legal non-domestics
12.1
7.9
Counterfeited
Illicit whites
Smuggled
0
orts
10
20
30
40
50
60
0
70
0
10
20
30
2011
2011
50
40
60
Chapter 2: The four components
2010
70
0
10
15
20
25
30
35
ce a week
wo weeks
18%
12%
3%
14%
3%
e a month
32%
20%
Less often
0%
Never
5%
20%
10%
32%
15% 20%
17.2
14%
15.5
12%
14%
10%
12%
8%
10%
9.2
6%
9.2
7.5
6.1
8%
4% 7.5
6%
2%
4%
0%
30%
35%
40%
0%
Primary
7.4
7.1
6.1
Vocational2.2
Primary
2%
25%
7.4
Vocational
2.2
Secondary
Smuggled cigarettes
Secondary
Higher
5%manufactured
10% 15% cigarettes
20% 25% per
30%
40%
day,35%
with at
least three of them
Smuggled cigarettes
being menthol cigarettes.
• After the abolition of subsidies to tobacco farmers in
Cheap cigarettes
18
grew (Drewnowska and Lentowicz 2011b; Ministry of
16
the Interior 2012, 171).
tobacco products.
• Young people find illicit tobacco attractive
because they are particularly price sensitive.
14
12
Cheap cigarettes
•• Prohibitions may affect the demand for illicit
2010, also the availability of untaxed raw tobacco
•• Education influences the demand for tobacco.
In addition, illicit tobacco allows them to evade the
prohibition on the sale of cigarettes to minors (Stop18
10
• Consumers of illicit cigarettes are almost eight
8
2012, 16). To be noted is that more than half of Polish
smokers start before eighteen (see Legal market,
school certificates (17.2%) than among people with
p.27), and that cannabis prevalence among young
4
university or higher degrees (2.2%) (Figure 32) (The
Poles is high (see Crime environment, p.45). This
2
implies that access to illicit channels is common.
0
of Warsaw, and Centers for Disease Control and
1997
1998
1999
2000
2001
2002
2003
2004
2005
tobacco among less educated smokers characterises
1999
2000
2001
2002
2003
2004
2005Euromonitor
2006 International
2007
2008
most European countries (Joossens et al. 2012).
2006
2007
2008
2009
2010
2011
2012
• According
to a recent experiment conducted among
smokers of menthol cigarettes, a ban on menthol
KPMG 2010
2009
2011
2012
cigarettes would increase their preference for
street vendors by 250% (from 15% to 51%) (Coelho
KPMG
• Among price-concerned consumers, purchasers
and Arink 2013, 33).
of illicit cigarettes are more numerous than
80%
.4
8.2
70%
60%
16.8 23.4
Control17.1and Prevention
2010).
7.5
14.0
58.7
58.8
58.7
49.1
1
6.5
07
2008
Ukraine
23.5
19.3
23.5
47.0
48.5
36.8
10%
0%
47.0
2.1
6.5
2007
2008
13.0
Belarus
2009
Russia
22.1
Ukraine
2010
Moldova
13.0
36.8
2009
Russia
2011
30%
19.3
12.7
50%
30%
58.8
12.7
17.9 Centers for Disease
18.3
Warsaw,
and
14.0
1.5
40%
.1
30%
1.5
35%
16.8
32) (The Maria Skłodowska-Curie
Institute,
Medical
7.5
17.1
8.2
8.7 18.4
3.2University
5.1 of
20%
35%
8.7
16.3
17.9
3.2
highly
educated
people
this5.1does not18.3occur (Figure
25.3
22.1
48.5
2010
Moldova
2012
Other countries
2011
2012
Other countries
25%
20%
15%
67
2.5
2.0
1.5
1.0
20%
0.0
15%
10%
0%
5%
Central
South
East
Illicit purchasers
Central
South
Illicit purchasers
East
Northwest Southwest
Smoking prevalence
Northwest Southwest
Smoking prevalence
North
0.85
0.5
5%
10%
0%
25%
3.0
POLAND
18.4
consumers of economic legal brands. Only among
Smoking prevalence
90%
Smoking prevalence
100%
3.5
times more frequent among people with elementary
6
Prevention 2010). A higher consumption of illicit
16.3
High
Note: data refer to smokers who consume at least six
0%
1998
15.5
16%
16%
7%
Less often
14%
Never
2010
35
30
2010
20%
2%
Once a week
7%
Every two weeks
12%
Once a month
2011
25
20
17.2
Source: Transcrime elaboration on18%
GATS (2010)
data
2%
Every other day
9%
Twice a week
ce a week
15
Figure 32. People purchasing cheap and smuggled cigarettes
20%
according to their education, 2009-2010
9%
Every day
other day
10
2011
Source: Transcrime elaboration on Coelho and Arink (2013) data
Every day
5
2010
Figure 31. How often do you see illicit street vendors?
.3
5
Slovakia
North
200
The four components
THE SUPPLY
•• The high profitability of the ITTP stimulates the
•• Proximity to the main producing countries of illicit
• The ITTP offers high profits (see box How profitable
whites favours the supply.
• The Russian Federation and Ukraine are the
supply.
is the ITTP?, p.70). Diverting tobacco products into
the illicit market, where sales are tax free, generates
considerable margins for illicit traders (Joossens and
main source countries of illicit tobacco in Europe.
Raw 2012, 232). Taxes account for a large share of
According to Joossens et al., sharing a land or sea
the final retail price of tobacco, making it a highly
border with Ukraine, Russia, Moldova or Belarus is
profitable product to smuggle (Merriman, Yurekli, and
a main determinant of the level of ITTP in a country,
Chaloupka 2000).
as confirmed by the high levels of ITTP in Latvia,
Romania, Bulgaria and Poland (2011; 2012).
• For Russian or Ukrainian smugglers, the Polish
• In Poland, the amount of total taxes per 1,000
sticks in International$-PPP is 225.5. In 2010, when
the amount was the 29th highest in the world, it was
market is highly profitable and it is less risky than
176.6. The Russian Federation was 140th in the world,
Western Europe (WHO 2009, 35).
Ukraine 88th and Belarus 139th (WHO 2012; European
• Lax enforcement against the ITTP in eastern
Commission 2013). The higher the taxes, the higher
are the incentives for large-scale smuggling.
countries may facilitate smuggling. Most seizures of
Ukrainian illicit cigarettes, for example, take place
68
• The share of taxes out of the retail-selling price
outside Ukraine in neighbouring Romania, Poland,
provides incentives for the ITTP at the national level.
and Hungary (Kaplan 2009, 31).
For this reason, they are mostly relevant for illicit
•• Price differentials on excise goods between the
two sides of the EU borders foster the ITTP.
• Prices of cigarettes are lower in extra-EU
manufacturing and wholesale/retail distribution of
illicit tobacco products within the national borders.
In 2013, in Poland tax incidence accounts for the
84.6% of the WAP (Weighted Average Price) and
86.5% of the most sold brand (see Regulation,
countries than in the Member States. Polish prices
p.37) (European Commission 2013). In addition to
are among the lowest in EU, but they are higher than
tax evasion, lower prices of tobacco products
in eastern neighbouring countries (Figure 33, p.69)
in eastern neighbouring countries increase the
(Eriksen, Mackay, and Ross 2012; Frontex 2012, 21;
attractiveness of bootlegging (Figure 33, p.69)
Ministry of the Interior 2012, 170-171).
(Komenda Główna Policji 2010; Ministry of the Interior
2012).
•• Poland is both a destination and a source country
for the ITTP.
• In Western and Northern European markets, the
prices of cigarettes are significantly higher than in
• Due to its position, Poland is a transit country
Poland. Smuggling illicit products from Poland to
for illicit cigarettes bound for the Western EU
these countries may significantly increase the returns
markets (see The modus operandi and geographical
on the ITTP (Figure 33, p.69) (Shleynov et al. 2008;
distribution, p.78) (Ministry of Finance 2012c; Tokarski
Lentowicz 2010; Ministry of the Interior 2012).
2012). Poland is in the world top ten departure
countries of seized cigarettes (Eriksen, Mackay, and
Ross 2012, 59). The disparities between tax levels
expressed in monetary terms on cigarettes create
these illicit opportunities (Lentowicz 2010).
Figure 33. Marlboro and cheapest brand prices in Europe, July 2012, US$
Marlboro
price inelaboration
US$ peron20
cigarettes
Source:
Transcrime
GMBH
PMG datain
July 2012
From US$ 4.01 to US$ 7.00
Less than US$ 2.00
Marlboro price in US$ per 20 cigarettes in July 2012
From US$ 7.01 to US$ 10.00
Less than US$ 2.00
More than US$ 10.00
From US$ 7.01 to US$ 10.00
FIN
7.12
FIN
7.12
More than US$ 10.00NO R
16.06
SW E
NO R
EST
SW E
7.45
EST
LVA
R US
DNK
7.45
IR L
12.01
GRB
IR L
12.01
BEL
GRB
12.28
FRA
8.18
FRA
8.18
POL
3.84
POL
DEU
6.94
DEU
6.94
NLD
12.28
7.49
6.94 NLD
L7.49
UX
BEL 6.07
6.94 L UX
4.43
ITA
ESP
PRT
ESP
5.54
2.12
BLR
1.19
UKR
1.56
UKR
HUN
HRV BIH
SR B
1.99
3.38
BIH
SR B
3.38
4.49
HUN
SVK
3.64
3.64
4.49 2.36
ALB
2.16
5.94
1.56
ROU
3.38
ROU
BG R
2.36ALB1.99MK D
2.16
2.56
5.94
BLR
1.19
3.55
SVN
AUT
ITA
PRT
LTU
HRV4.58
4.49
SVN
R US
2.12
LVA
4.13
SVK
6.60
5.54
R US
4.58
4.49
5.94
6.60
3.55
C ZE
AUT
4.43
5.94
8.67
C HE
8.67
LTU
2.12
3.84
C ZE
6.07C HE
2.12
4.22
4.13
8.25
DNK
R US
4.22
8.25
16.06
MK D
GRC
2.56
BG R
3.38
4.88
GRC
4.88
C YP
MLT
5.94
5.54
C YP
MLT
5.94
5.54
69
Cheapest brand price in US$ per 20 cigarettes in July 2012
Less than US$ 2.00
From US$ 7.01 to US$ 10.00
More than US$ 10.00
From US$ 7.01 to US$ 10.00
More than US$ 10.00
FIN
FIN
5.05
NO R
12.06
NO R
12.06
GRB
9.99
GRB
9.99
IR L
10.49
FRA
7.52
FRA
SW E
6.52
SW E
6.52
NLD
6.35
BEL
5.55 NLD
L UX
6.35
BEL 4.75
5.55
L UX
4.75C HE
6.03
C HE
6.03
POL
2.89
POL
DEU
5.45
DEU
5.45
ITA
5.67
ITA
5.67
C ZE
2.97
C ZE
AUT
2.97
4.75
SVN
AUT
3.69
4.75
SVN
3.69
R US
0.67
R US
0.67
LTU
2.64
LTU
2.64
2.89
HRV
3.69
SVK
3.32
SVK
3.32
HRV BIH
3.69 1.48
HUN
2.85
HUN
2.85
SR B
1.06
SR B
BIH
1.48ALB1.06 MK D
1.04
0.78
MK D
ALB
1.04
0.78
GRC
3.83
ESP
4.68
ESP
4.68
EST
3.03
EST
LVA
3.03
2.92
LVA
2.92
R US
0.67
R US
0.67
BLR
0.33
BLR
0.33
UKR
0.37
UKR
0.37
ROU
2.73
POLAND
7.52
PRT
4.62
PRT
4.62
5.05
DNK
6.48
DNK
6.48
IR L
10.49
Less than US$ 2.00
Cheapest brand price in US$ per 20 cigarettes in July 2012
ROU
2.73
BG R
2.73
BG R
2.73
GRC
3.83
MLT
4.62
MLT
4.62
C YP
3.89
C YP
3.89
Note: Prices for the UK and Ireland refer to recommended retail prices. Prices for Cyprus, Estonia, Latvia, Lithuania, Malta, Romania,
Slovenia and Sweden refer to maximum retail price. Norway is a free pricing market.
ic
2
ia
The four components
0
5
10
15
2011
20
25
30
0
35
the return on investment for OC is 375%, according to
15.5
14%
Sanctions for tobacco smuggling are more lenient
than they are for drugs, thus increasing the relative
attractiveness of the ITTP (Lisicki 2009, 9; Lentowicz
12%
2010).
10%
9.2
7.5
8%
7.4
• For bootleggers, the returns
are not7.1as high as they
6.1
6%
are for OC groups. However, in areas where wages
4%
are low and unemployment is widespread,
the ITTP
2.2
2%
2001
2002
2003
2004
2005
Primary
EUbusiness
2010).
Vocational
Secondary
Smuggled cigarettes
ITTP penetration
60%
50%
40%
R² = 0.4003
30%
20%
10%
0%
Higher
500
2,500 3,000
3,500
4,000 4,500
supply of illicit tobacco.
3.5
• the legal price of tobacco products in destina-
2011
3.29
100%
3.16
• In Poland, the consumption of illicit tobacco
2.44 is higher where recorded
estimated by means
of EPS
2.31
2.5
2.18
crimes per
inhabitant are lower (Figure 34).41 This
2.0
correlation suggests that the supply of illicit tobacco
1.55
may be independent from other criminal activities.
1.5
smugglers, their costs, and variations in retail prices.
According to Lentowicz, a pack of cigarettes that1.0
2010
2.91
3.0
• the differential in legal and illegal prices.
2009
•• Level of law enforcement may influence the
bacco products,
according to the level of organisation of the
2,000
Note: the graph depicts 2009, 2010 and 2011 regional data.
Subcarpathian regional data have an autonomous evolution.
• the price at which smugglers purchase to-
Given these factors, the final figures may differ
1,500
Subcarpathian Region
consider:
tion markets,
1,000
Estimates of the profitability of tobacco smuggling
70
0
Cheap cigarettes
HOW PROFITABLE IS THE ITTP?
1.28 1.29
0.85
crosses the Ukrainian-Polish border increase its
Alternatively, it may be higher where law enforcement
is less effective.
2010
or in another EU country. He estimates that
2011
2012
0.0
smugglers could gain a return of US$668,100 by
transferring a container filled with 100,000 packs
of cigarettes from Poland to the UK (2010).40 Other
journalists estimate that returns on tobacco bought
•• Two categories are active in the Polish ITTP:
2006
2007
2008
• large-scale
2009
2010 (Ciecierski
2011
organised
groups
2007, 3;
WHO 2009, 33; Frontex 2012, 20),
Gembicki
• individual or “ant” smugglers (WHO 2009, 33; Frontex 2012, 20).
in Kaliningrad are slightly lower (EUbusiness 2010).
Shleynov et al. report that traffickers could purchase
a container of Jin Ling for US$102,500 in 2008.
They hypothesise that smugglers could price
their cigarettes at around half of the price of legal
brands in destination countries. It follows that the
expected returns would be US$1.6 mn in Germany
or Sweden, and up to US$3.0 mn in the UK or in
Norway (2008).
South
Illicit purchasers
31.12.2010.
East
Northwest Southwest
Smoking prevalence
North
90%
80%
70%
60%
50%
40%
30%
20%
0.5
value four times; even more if it arrives in Germany
entral
2007
may guarantee acceptable earnings (Andrusz 2008;
0%
2009
2006
Source: Transcrime elaboration on Ministry of Interior (2012) and ALMARES (2012) data
the tobacco industry’s estimates (EUbusiness 2010).
17.2
2000
Figure 34. Share of non-domestic packs and recorded crime rate
(2009-2011)
18%
1999
Price
smuggling (Lisicki 2009, 9; Lentowicz 2010). Overall,
16%
1998
2010
• For OC, the ITTP can be more profitable than drug
20%
1997
41. EPSs give estimations of the penetration of the illicit market
and of its evolution over time in Poland’s main cities. There are
several reasons for treating EPSs with caution:
• they assess non-domestic products, which include legitimately
purchased cigarettes (e.g. travellers),
• figures are based on packs of cigarettes and exclude other
products such as HRT or cigars,
• they do not identify domestic contraband cigarettes,
• the sample is collected at the street level and does not
consider homes and workplaces.
Notwithstanding these limitations, EPSs may provide data useful
for analysing the illicit cigarettes market and in particular its
variations over time. Moreover, they provide estimates at the city
level, which are hardly available from other sources.
10%
0%
L
• However, smuggling channels mirror other illicit
•• A large number of people with low job
markets. As, for example, drug trafficking it does not
opportunities earn their livings as individual
have a hierarchical supply chain, but consists of fluid
smugglers. These are the Polish “ants”.
networks (Pearsons and Hobbs 2001, 12).
• Unemployed persons, retirees, and students
•• The importance of OC groups is increasing.
constitute the population of bootleggers and crossborder shoppers (see box Profile of an “ant”)
• According to experts and police officers, individual
smuggling is still of significant magnitude but its
(Ciecierski 2002). Their average age is twenty-seven
(Lisicki 2009, 8).
importance is decreasing, and now OC groups tend to
control the ITTP in Poland (Message House Agencja
PR 2006; WHO 2009, 33; EUbusiness 2010).
• Ants operate primarily in border areas of the East,
where economic conditions are worse (Society and
economy, p.21) (Andrusz 2008; WHO 2009, 33).
• OC groups are active in cigarette counterfeiting and in
Customs estimate that in Warmian-Masurian alone
large-scale smuggling (Europol 2011b; Drewnowska
more than 10,000 individuals are involved in “ant
and Lentowicz 2011b). Individual smugglers bring
smuggling” (WHO 2009, 33). Sociologists who are
relatively small volumes of cigarettes into Poland, and
studying the phenomenon report that most smugglers
they do so in a variety of ways (WHO 2009, 33).
register as unemployed to obtain national health care,
but they have little motivation to take on badly paid
• It happens that OC groups make use of violence to
legal jobs (Andrusz 2008).
run their businesses (Niemczyk 2013).
• The high differential in retail prices with neighbouring
•• Large-scale smuggling often involves
international OC groups.
countries and a large degree of tolerance by the
public incentivise individual smuggling (Lisicki 2009, 8;
WHO 2009, 33; Lentowicz 2010).
• In addition to Poles, the authorities have ascertained
• Individual smugglers from Ukraine participate in the
groups engage in the ITTP (Ciecierski 2007, 3; DNA
ITTP in Poland. They are on average thirty years
2010, 156; Europol 2011b; Junek 2011; Ministry of the
old. They come mainly from Lwów, Iwonofrankowsk,
Interior 2012, 170-171). Vietnamese organisations,
Mościska, Odessa, Czerniowce, Kiev and use trains
instead, purchase the illicit cigarettes once they are in
to transport their loads (Lisicki 2009, 10).
Germany or in the Czech Republic and manage their
retail (von Lampe 2001).
• Foreign OC groups establish their manufacturing
facilities of illicit cigarettes in Poland because of:
• Poland’s EU membership,
• the availability of a skilled labour force from abandoned Bulgarian tobacco factories,
2012, 170-171).
• Wholesale brokers have a major role in the Polish
ITTP. They trade in various brands, and secure the
transit of cigarettes, also by paying the necessary
bribes, from the sellers to the retail networks. These
players may have large financial resources and a
legitimate appearance enabling them to purchase
large quantities also from legal distributors or
producers (von Lampe 2001).
Dariusz is a 34 year old smuggler from Bezledy in
Warmian-Masurian. During an interview, he claimed:
“I don’t have any option. I live in an area where
unemployment is around 40% and I have a wife and
two kids. 10 years ago, I had an accident, which left
me with a disabled hand. If smuggling didn’t pay off,
I wouldn’t be doing it”.
During his latest botched attempt, Dariusz was
caught carrying 40 packs of cigarettes and faced a
fine of PLN200 (US$64) (EUbusiness 2010).
POLAND
• active criminal networks (Ministry of the Interior
PROFILE OF AN “ANT”
that Lithuanian, Ukrainian, and Russian speaking
71
6.00
2,517
5.00
2,045
4.00
3.30
1,610
2.59
THE PRODUCTS
3.00
2.00
1.00
2008
2009
Number of seizures
owing to the different methodologies used.
• All methods to estimate illicit trade have their
0.00
limitations. Often, studies provide limited information
(Ciecierski 2007; Euromonitor International 2012c,
on the methodology adopted (Joossens 2011, 1;
Niemczyk 2013).
• It is difficult to estimate the magnitude of tobacco
28% and illegal nature.
smuggling because of its hidden
assessment they provide a rough estimate of the level
Furthermore, some of the illicit cigarettes circulating
of the ITTP (Niemczyk 2013).
24%
in Poland are bound for Western Europe and thus
complicate the calculation (Ciecierski 2007; WHO
•• Different unofficial estimates are available.
the penetration of the ITTP (Ciecierski 2007;
16%
•• The ITTP is larger in Poland than in most other
Euromonitor International 2012c, 11). Existing
6
• multiple sources, as Euromonitor International’s
8%
• Euromonitor International estimates the penetration
estimate,42
2
of the ITTP in 80 countries. Poland
has the fourteenth
4%
• the analysis of the EPS43 and of other sources, as
highest level of ITTP penetration in the world and
KPMG’s estimate,44
1997
1998
1999
2001
200245
• the 2000
EU Flows
Model,
2003
2004
Price
2005
2006
2007
(Table 13, p.73 and Figure 35).46
• The government adopted estimates by KPMG as
20%
10%
0%
2010
2011
2012
30%
25%
2012c, 5).
40%
30%
2009
Ireland.47
Source: Transcrime elaboration on Gembicki (2011), Euromonitor International (2013b),
ALMARES (2012) and KPMG (2013) data
actions for the period 2009-2011 (Ministry of Finance
50%
0%
the fourth in Europe behind Latvia,
Lithuania and
Figure 35. Estimates of the ITTP, 1997-2012, percentage of the legal
market
benchmark to evaluate the efficacy of its anti-ITTP
60%
2008
ITTP penetration
• seizures volumes, as Niemczyk & Partners’ estimate
72
12%
European countries.
estimates are based on:
4
20%
2009).
However, there is no agreed method to measure
8
•• The estimates may provide conflicting results
10% of the smuggled cigarettes. Moving from this
0
60% 58%
• Law enforcement agencies assume to seize around
2
38% 35%
estimates
2010 on the
2011 prevalence of illicit tobacco
11).
The four components
•• Polish authorities do not provide official, yearly
4
0
7.00
ITTP penetration
6.38
5%
Average seized quantity, thousand of
8.00
20%
42. Euromonitor International’s sources include
the trade press,
R² = 0.4003
customs offices, interviews with manufacturers and retailers, as
well as local knowledge of the market – for example how porous
borders are, how high unit prices are, whether a market is a
conduit for cigarettes versus actual consumption.
43. Niemczyk & Partners estimates the penetration of the ITTP
from data on seizures, evaluations of illicit products interception
rates and researches conducted in open air markets (Niwserwis
2011,
6; Niemczyk 2013).
0
500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
44. KPMG conducts an annual study for PMI and OLAF as a
part of
the EUcrimes
agreements.
KPMG
analyses different sources,
Recorded
per 100,000
persons
including tobacco sales data, consumer surveys and EPSs and
2009
2010
2011
divides non-domestic packs between: legal non-domestic and
counterfeit and contraband “c&c”.
The proportion of the packs classified as c&c provides the
estimate of the ITTP penetration (KPMG 2012).
45. Flow model estimates rely on the analysis of imported,
exported, produced and consumed volumes. The sum
of production and imports should be equal to the sum of
3.29 Gaps in the equation indicate the
consumption and exports.
3.16
misappropriation of certain volumes and their diversion towards
2.91
the illicit one. This methodology does not consider extra EU flows
and flows of illicit whites.
2.44 It is therefore necessary to treat its
2.31
results
2.18 with caution.
46. See footnote 38.
1.55
1.28 1.29
15%
10%
5%
0%
97 98 99 00 01 02 03 04 05 06 07 08 09 10
11
EU Flows Model
KPMG
Seizure estimate (Poland)
Empty Pack Survey
100%
90%
26.4
80%47. The ranking has been compiled by Transcrime on
Euromonitor International data, data on Poland refers to year
2011.
70%
60%
50%
40%
30%
20%
53.6
12
0.0
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
01
02
03
04
05
06
07
08
Recorded crimes
09
10
0%
11
Table 13. ITTP estimates. Percentage of the total market, 2000-2012
Source: Transcrime elaboration on Gembicki (2011), Euromonitor International (2013b), ALMARES (2012), Joossens et al. (2012) and KPMG (2013) data
EstimateBorders
2000
2001
2002
2003
2004
2005
2006
2007
Ukraine
2008
2009
2010
2011
2012
Lithuania
Euromonitor
International
Internal territory
15.5
16.0
15.3
15.7
16.0
15.9
16.5
17.4
19.2
Germany
20.6
21.7
22.7
24.1
-
-
-
-
-
-
4.9
6.6
Belarus
9.1
13.2
11.4
12.8
14.5
-
-
-
-
-
-
6.6
8.0
Russia
9.7
13.4
11.6
13.9
-
11.8
10.6
12.9
13.0
10
11.7
Empty Pack Survey
Territorial waters
EU Flows Model
Czech Republic
KPMG Airports
-
Seizure estimate 0
(Poland)a,c
10
20
-
-
2011
30
-
40
-
50
60
-
-
70
-
5.7
7.1
8.2
Slovakia
-
-
-
0
13.6
5
11.7
2011
2010
15
-
20
25
-
30
35
2010
Seizure estimate
(UK)b,c
-
-
-
-
-
-
-
-
23.9
20.9
20.9
-
-
Joossens et al.
-
-
-
-
-
-
-
11.0
-
-
-
-
-
Gembicki
-
-
-
-
-
-
-
-
12.0
-
-
20%
- 18%
- 17.2
Note: Euromonitor
International estimates
refer to the cigarette market only. a This estimate is based16%
on the assumption
that seizures
Every day
9%
15.5
are equal to 10% of the actual ITTP. Polish Customs Service provides this figure (Niwserwis 2011, 6). b This estimate is based on the
14%
Every that
otherseizures
day
2%
assumption
are equal to 5% of the actual ITTP. UK Border Agency provides this figure (Niwserwis
2011, 6). c In the first
Tabela
11
12%
quarter ofTwice
2008,
Customs
Service
went
on
strike;
this
influenced
2008
seizures.
a week
7%
10%
•• Penetration
by the ITTP changes
across time
Once a week
12%
Every two weeks
period 2000-2006. The market share of illicit products
3%
rose from 15.5% in 2000 to 15.9% in 2005 (+2.6%).
2009
decreased by 16.9%, falling from 92.7 bn units to
5%
10%
15%
20%
25%
30%
35%
2.58
3.42
77.0 bn units (Figure 36). Ukraine
Therefore, illicit market
2011
This was
despite the fact that it decreased by 0.7%
2%
in volume terms (Euromonitor International 2012a).
oftenin 1998 to 14.1 bn units in 2000 (+6.0%).
32%
13.3 bnLess
units
Belarus
0.11
0.38
At the same
time, the volume
of legal 20%
purchases
Never
4%
2010
1.04
1.39
2.66 to
According
Ciecierski,0%
the penetration
of the
ITTP
Primary
Vocational
was steady over the period 2004-2006 at 11.0%
40%
4.71
2.96
(Figure1.70
35,
1.35
1.08
1.01
0.26
0.32
0.54
0.66
0.55
1.32
p.72) (2007).
Smuggled cigarettes
penetration grew by 24.0% between 1998 and 2000
RussiaInternational
1.23
1.07
(Figure 35, p.72) (Euromonitor
2012a).
Figure 36. Volume of the illicit market,
1997-2012, bn units
Moldova
-
-
Source: Transcrime elaboration on Euromonitor International (2013b) and KPMG (2013) data
Other countries
18
1.33
0.95
16
12
10
8
6
4
2
0
1997
1998
1999
6.1
Secondary
Cheap cigarette
POLAND
Tabela 12
14
7.4
6%
a month
14%
2007
2008
• The Once
consumption
of illicit cigarettes
expanded
from
0%
7.5
8%
along an upward trend.
73
9.2
• The penetration of the ITTP was stable over the
2000
2001
2002
2003
2004
2005
2006
KPMG
2007
2008
2009
2010
2011
2012
28%
14
Smuggled cigarettes
Cheap cigarettes
24%
2009
2010
The four components
8
16%
• All the available sources indicate an increase in the
Figure 37. Tax loss caused by the ITTP, 2006-2011, PLN bn
ITTP between 2006 and 2011:
6
Source: Transcrime elaboration on Euromonitor International
12%(2012a), KPMG (2012) and
European Commission – Directorate General Taxation and Customs Union Tax policy data
• +37.6% from 16.5% to 22.7% by Euromonitor
4
3.5
8%
International’s estimate (2012a),
KPMG (2012),
EPSs
2005 by2006
Price
(2012),
• +110.6% from 6.6% to 13.9%, EU Flows Model
(KPMG 2012).
60%
2008
2009
50%•
2010
2011
R² = 0.4003
2012; Euromonitor International 2013b). KPMG
30%
considers the level of the ITTP to be stable since 2011
(Table 11, p.61) (KPMG 2013).
Smoking prevalence
•• The ITTP causes important revenue losses.
0%
500 and
1,000experts
1,500 2,000
2,500institutions
3,000 3,500 estimate
4,000 4,500
•0 OLAF
of other
that,
in 2010,
EU governments lost between US$9.3 and
15%
0%
2012
1.0
0.85
0.5
30%
2006
2007
2008
2009
2010
2011
25%
Gembicki
20%
Note: The Euromonitor International-KPMG estimate is based
on market value data by Euromonitor International and illicit
15%
penetration data by KPMG. PLN 2.9 bn of tax losses are
equivalent to 0.47% of total Polish public expenditure in 2011.
•• There
are various illicit tobacco products in
5%
Poland:
0% whites,
• illicit
97 98 99
00 01 02 03 04 05 06 07 08 09 10
11
• smuggled cigarettes,
EU Flows Model
KPMG
Seizure estimate (Poland)
US$13.4 bn in taxes because of the ITTP (EUbusiness
• counterfeit cigarettes,
2010; Lentowicz 2010; Drewnowska and Lentowicz
• unbranded
loose tobacco (Euromonitor
International
Empty Pack Survey
10%
2011
10%
30% 10%
20%
74
2010
2.44
1.55
The ITTP also grew during 2012. This is confirmed by
third quarter of 2012, higher than in 2011. (ALMARES
3.16
1.28 1.29
0.0
2012
2009
1.5
the increasing share of non-domestic cigarettes in the
40%
35% 20%
25%
20072.0 2008
ITTP penetration
• +126.3% from 5.7% to 12.9% by KPMG’s estimate
2007
2.31
2.18
• +101.5%
from 6.6%
13.3%,
adjusted
1998
1999
2000
2001 to
2002
2003
2004
1997
4%
2.5
(2012),
3.29
2.91
3.0
• +161.2% from 4.9% to 12.8%, EPSs by ALMARES
2
0
2009
2010
2011
2011a; Ministry of Finance 2012c, 3).48
2012b, 2; ALMARES 2012; Tokarski 2012).
5%
0%
• Experts and the media assert that, in Poland, tobacco
Centralsmuggling
South
East
Northwest
Southwest
causes
more
than
PLN3.0 North
bn (US$1 bn) of
tax losses
per
Illicit
purchasers
year
(Onet
2011; Gembicki 2011, 10;
Smoking
3.29prevalence
3.16
90%
70%
50%
interventions, the illicit trade penetration could reach
40%
22% by 2014,with estimated losses for the national
30%
budget of PLN3.3 bn per year (Ministry of Finance
20%
2012c, 3).
10%
2008
26.4
60%
• According
to the Polish Ministry of Finance, with no
1.55
2007
100%
80%
2.18
0.85
Source: Transcrime elaboration on KPMG (2012) and ALMARES (2012) data
sales data, illicit market penetration, and average
49
2.44figures (Figure 37).
taxation show
similar
2.31
1.28 1.29
Figure 38. Polish illicit market by type of product, 2011
Tokarski 2012). Rough estimates based on tobacco
2.91
2006
2011
20%
10
ITTP penetration
12
2009
2010
2011
0%
Legal non-domestics
Gembicki
31.12.2010.
49. PLN/US$ European Central Bank exchange rate at
31.12.2012.
53.6
12.1
7.9
Counterfeited
Illicit whites
Smuggled
12
•• Illicit whites are the most widespread illicit
tobacco product (Figure 38, p.74).
50
• Viceroy packs by BAT are the most common among
non-domestic cigarettes (16.4% of non-domestic
cigarettes in the last EPS). Around 10% of all BAT
• In 2011 and in 2012 illicit whites accounted for
cigarettes come from abroad. The incidence of non-
approximately 54% of non-domestic cigarettes
domestic packs is also high for Classic by IT (10.8%
(ALMARES 2012). 2012 EPS reports the spread
according to the last EPS) and for Marlboro by PMI
of Fest, Minsk, Premier, Kiss, NZ, Austin, Magnat,
(5.2%). Brand fluctuations between consecutive EPSs
Queen. KPMG catalogues these brands as emerging
may be significant (ALMARES 2012).
illicit whites (2012, 48; ALMARES 2012).
• According to the last EPS, Neman Grodno Tobacco
Factory (NGTF) is the principal manufacturer of the
illicit whites consumed in Poland. NGTF produces
40% of the Polish non-domestic cigarettes, and its
diffusion is increasing. Its brand, Premier, is the
second most widespread brand (11.1%) among
non-domestic ones and the first among illicit whites
brands. NGTF also commercialises Fest (8.3% of
non-domestic cigarettes), Minsk, NZ, Queen, Magnat
(ALMARES 2012, 13-15).
• NGTF is a Belarusian public company leader in its
national market. It manufacturers its own brands as
well as cigarettes for BAT, JTI and IT (Euromonitor
International 2012c).
Jin Ling is the main European brand of illicit
whites. It started to flow from the Russian exclave
of Kaliningrad into Poland in 2005; in 2011 it
occupied 3.0% of the Polish black market with a
decrease of 50% with respect to 2009 (Europol
2011b, 32; KPMG 2012, 49).
Baltic Tobacco Factory (BTF) is the company
behind the production of these tax-free cigarettes.
BTF bought its facilities in the Russian Federation
and Ukraine from subsidiaries of JTI Group; its
manufacturing now takes place in Russia, Ukraine,
Moldova, and most of all in Kaliningrad, a wellknown hot spot for smuggling and OC.
From Kaliningrad, smugglers move billions of Jin
Ling cigarettes directly to Poland, or transport
indicated Jin Ling (see box Jin Ling) as accounting for
them by sea and inland routes to other European
3.0% of non-domestic cigarettes. Jin Ling is a famous
markets. There are criminal networks trafficking this
brand of illicit whites whose diffusion fluctuates in time
product in at least twelve countries — Germany,
(ALMARES 2012).
the UK, Poland, Latvia, Romania, Greece, Turkey,
•• Smuggled cigarettes are the second component of
the Polish black market.
• Smuggling accounted for around a quarter of the
ITTP in both 2011 and 2012. This figure represents
approximately 3.6% of the entire Polish market, and
it comes from EPS data and estimates of the level of
Italy, Bulgaria, the Netherlands, Belgium and France
(Shleynov et al. 2008; Hauptzollamt Rosenheim
2012).
Packs of Jin Ling are clearly illegal because they
lack the mandatory health warnings. However, some
Jin Ling packs found in Europe bore “duty free”
stickers, or counterfeit Russian tax paid stamps,
apparently as a marketing tactic to confer prestige
and credibility on the product (Shleynov et al. 2008).
BTF imports tobacco from Argentina, Brazil, but
most of all from African countries like Malawi,
Zambia and Zimbabwe. The paper used in the
production instead comes from Sweden (Anon.
2008).
50. Illicit whites are legally manufactured in a country, but
normally they are smuggled into countries where they have no legal
market. Manufacturers usually pay taxes in the production country
while evading them in destination countries (Allen 2011b, 5).
POLAND
cross-border legal purchases (ALMARES 2012).
75
• The EPS conducted in the third quarter of 2012
JIN LING
The four components
•• The smuggling of raw tobacco and other tobacco
products is rising.
• Reorganisation of the tobacco market in 2009
facilitated uncontrolled access to raw tobacco.
This situation caused an increase in the number of
illegal tobacco factories (see Polish tobacco market,
p.29). Cost effectiveness is comparable to that of
counterfeiting, but the funds necessary to start and
operate are smaller (Ministry of the Interior 2012, 172).
• The mounting threat from counterfeiting and illicit
production is evidenced by the increasing number of
detected illegal manufacturing facilities (see The fight
against the ITTP in Poland, p.54) (WHO 2009, 34).
• According to experts, the demand for raw tobacco is
increasing because it is cheaper than illicit cigarettes
(WHO 2009; Tokarski 2012). The introduction of duties
on green leaf in January 2013 has caused a partial
shift of the commerce of this product on the internet
and in open air markets where it is possible to buy it
illegally evading taxes (Niemczyk 2013).
76
• The smuggling of cigars and cigarillos is also
expanding (WHO 2009).
•• Counterfeits are the third component of the ITTP.
• The latest available EPS indicates that the share of
counterfeits of the four main multinational companies is
2.2% of the entire market and 15.2% of non-domestic
packs. The diffusion of counterfeits is increasing
(ALMARES 2012).
• In recent years, criminals have mostly targeted IT and
PMI brands. The last EPS found that 8.0% of packs
by IT and 2.1% of packs by PMI were counterfeits
(ALMARES 2012).
• Data on the incidence of counterfeit packs of PMI in
2011 are available for all the EU countries, so that
comparisons may be made. In 2011, the penetration
of PMI counterfeits in Poland (1.0%) was below the
PRICE AND ORIGIN OF ILLEGAL TOBACCO
PRODUCTS
•• The consumption of illicit products allows large
savings.
• Illicit prices tend to vary in time, across the country
and according to the channels of distribution.
Smugglers tend to change their prices according
to increments in legal prices and to the level of
competition on the black market (Drewnowska and
Lentowicz 2011b; Niemczyk 2013).
• The low prices of illicit cigarettes make them
extremely convenient for consumers. Buying
smuggled cigarettes or illicit tobacco allows a
saving of around 65% of the price (Andrusz 2008;
Joossens et al. 2009, 13; Otto 2013). However, it has
been observed that, during 2011, the price of illicit
cigarettes passed from around 30 % to around 70 %
of the price of cigarettes on the legal market. In 2012,
prices of illicit products slightly decreased (Niemczyk
2013).
• A pack of cigarettes smuggled from Ukraine may
cost US$2.70 (Lentowicz 2010), while the price of Jin
Ling is around US$2.00 per pack (Sobczyk 2011).51
During an investigation conducted in January 2013,
experts from PMI observed that illicit packs of menthol
cigarettes cost between US$2.08 and US$2.30
(Coelho and Arink 2013). Considering these prices,
the saving would be around 35%; significantly less
then observed by other sources.
• On web forums such as oglaszamy24.pl or olx.pl,
people sell 20-cigarette packs for PLN4.5-PLN6.0
(US$1.38-1.84).52 Most of the cigarettes offered bear
the Red Marlboro logo. Prices may vary according to
purchased quantities and the bargaining process.
• It is possible to buy a kg of smoking tobacco on the
Internet, for PLN100 (US$30.6) saving 38.5% on the
legal price of PLN260 (US$79.6) (Tyszka 2012).
average of both the countries on the eastern borders
(2.0%) and the rest of Europe (4%) (KPMG 2012, 42;
ALMARES 2012).
31.12.2010.
52. PLN/US$ European Central Bank exchange rate at
31.03.2013.
2011
2011
2010
2010
2008
2009
2010
2011
20%
Actual Market Share
Every day
8.2
11.8
9%
THE DEVALUATION OF THE
2%
Every other day
BELARUSIAN
Projected
Market Share RUBLE
10.0
Twice a week
10.6
10.6*
18%
• Since 2009, also Moldova
has 17.2
become an important
12.5
15.0
14%
0.54 bn cigarettes illegally
entered from Moldova
15.5
source country of illicit 16%
tobacco products. More than
12% (Figure 39) (KPMG
in 2011 (7.5% of the total)
7%
In 2011, Belarus faced a harsh economic crisis.
9.2 of
2012, 208). According 10%
to 2012 data, the share
Oncecurrency
a week
12%63.6% between
National
devaluated by
7.5
8%
Moldovan cigarettes dropped
to 1.5% of non-domestic
May
and
December
2011.
The devaluation of the
Every
two
weeks
3%
cigarettes.
Belarusian Ruble increased the price gap between
Once a month
4%
2% Kazakhstan and China are
• Less frequently, Armenia,
32%
0% products (WHO 2009).
the sources of illicit tobacco
tobacco sales
volumes grew by 16% during
Never
20% 2011,
despite the stability of domestic demand.
0%
5%
10%
15%
20%
25%
Primary
30%
35%
According to Belarusian official figures, the
Estimate
value of cigarette exports was US$1.95
mn in
40%••
of illicit tobacco products.
15.5
•16.0In 2007,
Belarusian cigarettes accounted for 2.1% of
15.3
15.7
16.0
15.9
16.5
17.4
Crime estimates the value of cigarette exports
Empty Pack Survey
-
EU Flows Model
-
-
KPMG
-
-
-
-
-
-
18
higher (Euromonitor International 2012c).
14
••12 Russia, Ukraine and Belarus are the source
8
6
countries of illicit tobacco products
(Gumkowski,
Seizure estimate
a,c
(Poland)
Przewozniak, and Zatonski 2006;
Message
House Agencja PR 2006; Ciecierski
2007, 14-15;
Seizure estimate
(UK)11).
Euromonitor International 2012c,
b,c
1997
1998
1999
2000
2001
2002
2003
2004-
Gembicki
2012). EU accession and increase
in eastern border
-
2005
2006
2007
volumes increased more than twenty-three times
-
-
-
-
4.9
from 0.11 bn cigarettes to 2.66 bn. The severe
6.6
economic crisis that hit Belarus in 2011 amplified the
-
-
-
-
6.6
8.0
differential in prices between the two countries, thus
accelerating this process (see box The devaluation of
-
-
-
-
5.7
7.1
the Belarusian Ruble). Today more than 35% of Polish
illicit cigarettes come from Belarus (Figure 39 and
2008
2009
19.2
20.6
9.1
13.2
9.7
13.4
8.2
11.8
11.7
-
-
-
-
-
-
13.6
-
-
-
-
-
-
23.9
Table 14) (KPMG 2012, 208; ALMARES 2012, 11).
2006 and 2009 and then decreased by 63% between
-
-
-
-
-
11.0
2009 and 2011 (Table 14). Estimates indicate that
a volume of 1.70 bn cigarettes consumed in Poland
2005 - 2006
controls since 2004 have only marginallyEuromonitor
changedInternational
this
situation (Euromonitor International 2012b, 11).
2004
Cheap cigarette
-2007
2008
-
2009
-
2010-
2011 - 2012
-
illegally entered from Ukraine during 2011 (KPMG
77
-
-
2012,
KPMG208).
Tabela 11
Figure 39. Illicit cigarettes by country of origin, 2007-2012, %
Table 14. Illicit cigarettes by country of origin, 2007-2011, bn sticks
Source: Transcrime elaboration on KPMG (2012) and ALMARES (2012) data
Source: Transcrime elaboration on KPMG (2012) data
90%
25.3
16.3
80%
16.8
18.4
70%
60%
8.2
3.2
5.1
17.1
1.5
7.5
12.7
Belarus
58.7
47.0
23.5
Ukraine
58.8
49.1
Russia
48.5
20%
36.8
10%
2.1
6.5
2007
2008
13.0
2009
22.1
2010
Moldova
2011
Ukraine
Russia
Moldova
2012
Other countries
Note: 2012 data refer to non-domestic cigarettes, not to illicit
Tabela
cigarettes.
2008
2009
2010
2011
25%
0.11
0.38
1.04
1.39
2.66
2.58
15%
3.42
4.71
2.96
1.70
10%
1.23
1.07
1.35
1.08
1.01
5%
-
-
0.26
0.32
0.54
20%
0%
Other countries
Belarus
2007
30%
12
1.33
Central
South
East
Northwest Southwest
0.95
0.66
0.55
1.32
Illicit purchasers
Smoking prevalence
-
-
POLAND
19.3
50%
0%
35%
17.9
18.3
14.0
23.4
40%
30%
8.7
Smoking prevalence
100%
20.9
al.
•2 In 2011, they accounted for 74.3%Joossens
of the et
illicit
tobacco -
products circulating in Poland (Figure 39) (KPMG
2003
• Volumes from Ukraine increased by 182% between
4
0
2002
the black market. Between 2007 and 2011, smuggled
-
at US$490.0 mn – more than two hundred times
Secondary
Belarus has surged as the main Smuggled
countrycigarettes
of origin
2001
International
the Head Department of Combating
Economic
10
Vocational
2000
2010 and US$2.3 mn in January-July
2011, but
Euromonitor
16
6.1
6%
14%
Polish and Belarusian cigarettes, attracting crossLess often
border purchasers
and smugglers. Consequently,
7.4
North
The four components
MODUS OPERANDI AND
GEOGRAPHICAL DISTRIBUTION
•• Poland is a source of counterfeit cigarettes
THE MODUS OPERANDI
• Recently, the effectiveness of the fight against the
(Europol 2011b, 36).
ITTP has increased the risk of detection along the
borders (see Enforcement, p.51). For this reason, OC
•• The Polish Ministry of the Interior divides the
groups have moved cigarette production closer to final
national ITTP into three categories (see The
consumers (WHO 2009, 34; Europol 2011b).
products, p.72):
• smuggling of tobacco products,
• Counterfeiters use low-cost machinery from Asia
• counterfeiting of cigarettes and tax stamps,
or from manufacturers who left the market. The
• illegal manufacturing of HRT and unbranded
investment pays off even if only one container of
tobacco products (Ministry of the Interior 2012,
cigarettes is sold (Gounev and Bezlov 2010, 128).
171).
• Ukrainian, Lithuanian and Polish criminals cooperate
•• Smuggling is the main form of ITTP in Poland
in counterfeiting. The Police have observed the
(Ministry of the Interior 2012, 171).
recurrence of joint schemes based on the importation
of raw tobacco from Ukraine, of other materials
• The prominent role of smuggling is confirmed by the
from Lithuania, and manufacture in Poland (Europol
2011b).
EPSs (see The products, p.72), the large number of
seizures along the borders (see Enforcement, p.51),
and stakeholders’ analyses (ALMARES 2012; RILO
2010; Ministry of the Interior 2012).
78
Figure 40. Detections of illicit tobacco factories in Poland between 2005 and 2013
Source: Transcrime elaboration on Policja (2013), PMI (2013) and international news data
LITHUANIA
RUSSIA
Pomorskie
!
(
Warminsko-Mazurskie
Podlaskie
Zachodniopomorskie
!
(
!
(
Mazowieckie
Kujawsko-Pomorskie
!
(
!
(
BELARUS
!
(
!
(
!
(
!
!(
(
!
(
!
(
GERMANY
!
(
!
(
!
(
!
(
!
(
!
(
!
(
Illicit factories
Percentage of
non–domestic
packs from
EPS Q3 2012
< 5.0
5.0 – 15.0
15.0 – 25.0
> 25.0
Dolnoslaskie
!
(
Lubelskie
Lódzkie
!
(
!
(
!
(
!
(
Wielkopolskie
Lubuskie
!
(
!
(
Swietokrzyskie
Opolskie
!
(
Slaskie
!
(
!
(
!
(
!
(
!
!(
(
!
(
!
(
Podkarpackie
Malopolskie
CZECH REPUBLIC
SLOVAKIA
UKRAINE
• Police has never detected any illicit factory in any
• A second flow of illicit cigarettes from Greece and
of the regions along the eastern borders where,
Bulgaria concerns the south-eastern borders between
according to all the sources, the penetration of the
Poland and Slovakia (Ministry of the Interior 2012,
ITTP is higher (see The geographical distribution,
171-172).
p.83). Production takes place in central (in particular in
Mazowieckie), southern (Śląskie) and eastern regions
• The importance for the ITTP of the Balkan Route
(Lubuskie and Dolnośląskie) (Figure 40, p.78). The
has increased in recent years because of the spread
bootlegging afflicts more eastern regions than the rest
of illicit whites manufactured in Eastern Europe.
of the country (Andrusz 2008; WHO 2009, 33). Illicit
Genuine and counterfeit cigarettes also pass along
manufacturers probably prefer to install their factories
the Balkan Route and then through Poland (see Crime
where there is not an overstocked black market.
environment, p.45) (Europol 2011b, 32).
•• The increasing demand for HRT and the evolution
•• The ITTP in Poland is part of a larger network
of the legal framework of the Polish markets have
(Ciecierski 2007). Significant amounts of
led to the appearance of illicit manufacturers of
contraband tobacco are re-exported to Western
HRT.
Europe (Euromonitor International 2012b).
•• There are two types of smuggling in Poland:
• large-scale smuggling,
• individual or “ant” bootlegging (WHO 2009, 33).
•• Individual smugglers may cooperate with OC
groups.
• Ants carry cigarettes across the border and deliver
OC groups collect the goods and move them to local
markets and fairs around the country, or to the rest of
the EU (WHO 2009, 33; EUbusiness 2010).
• Warehouse owners often play an active role in the
ITTP and can establish long-term relations with the
other actors involved in the traffic (Gounev and Bezlov
2010, 128).
•• North-eastern borders are the main entries for
illicit tobacco.
• Smugglers bring cigarettes into the country mostly
Ukraine, Belarus and Russia (Gumkowski,
Przewozniak, and Zatonski 2006; Ministry of the
Interior 2012, 171-172). Interviewees identified
Bialystok, bordering on Belarus, and Przemysl and
Medyka, bordering on Ukraine, as locations where
large-scale cross border bootlegging takes place
(Gounev and Bezlov 2010, 129).
within the EU to move them to other Member States
(Locke 2010; Europol 2011b, 30).
• Trade and travel between Poland and Western Europe
have become easier since Poland joined the EU (in
2004) and signed the Schengen Agreement (in 2007).
79
This has increased Poland’s role as an exporter of
contraband cigarettes to Central and Western Europe
(Locke 2010; Euromonitor International 2012b, 11).
• Experts estimate that 60-70% of all cigarettes
smuggled into Poland are sold in the country,
while the rest move to other European countries,
particularly Germany, UK and Northern countries
where tobacco prices are much higher (WHO 2009,
33; Europol 2011b, 30; Gazeta 2011; Frontex 2012,
19; Euromonitor International 2012b). In 2011, 19.0%
of the illicit cigarettes in the UK came from Poland, in
Germany 46.0% (KPMG 2012).
• Several factors testify to the importance of contraband
to the EU:
• packs of Polish cigarettes collected in Western
Europe (KPMG 2012),
• seizures of smuggled cigarettes along Poland’s
south-western borders (Junek 2011),
• substantial seizures of cigarettes appreciated by
the British market, such as Superkings, Regal or
Dorchester (Junek 2011),
• international investigations as the one conducted by
Italian law enforcement agencies (DNA 2010, 166).
POLAND
across the north-eastern borders with Lithuania,
Poland’s borders and then exploit the weaker controls
them to designated places, usually illegal warehouses.
• Smugglers introduce cigarettes into the EU across
The four components
• According to Customs officers, since Poland intensified
its fight against the ITTP and tobacco seizures
increased (see Enforcement p.51), OC groups
have focused on other countries to bring smuggled
cigarettes into the EU (Warsaw Business Journal
2011).
•• The modi operandi of smugglers are diverse and
exploit a multiplicity of means of transport (Frontex
2012, 20).
• Road vehicles are the primary means of transport for
the ITTP. Smugglers use them to enter, move and
CIGARETTE TRANSPORTERS
“A vehicle is loaded up to the roof with cartons of
cigarettes in Ukraine and the driver travels at least
at 200 km per hour on the Polish motorway. This
way, hardly anyone will catch up with him”, said
a source involved in the fight against smuggling.
“Smugglers recruit drivers among former soldiers
of the Russian army. If they have a car crash
somewhere or if they risk being caught, they
abandon the car and run away”, he added (Junek
2011).
transfer the illicit tobacco products to other countries.
Border guards detected a BMW speeding near
In 2011, seizures on wheeled vehicles accounted for
Sulejow, in Central Poland. The driver did not stop
78% of the total (74% in 2009, 72% in 2010) (WHO
when requested and sought to escape along back
2009, 33; Ministry of the Interior 2012, 171-181).
roads. Bad weather conditions caused the driver
to lose control of the vehicle. The driver locked
• Minivans and lorries with hidden compartments in false
80
himself inside and did not react when asked to
floors, walls and double-walled fuel tanks are common.
leave the vehicle. Only by breaking the window and
However, smugglers may simply fill a car as much as
disabling the 35-year-old man could the customs
they can and try to cross the border (see box Cigarette
officers inspect the car. Officers found 8,670 packs
transporters) (RILO 2010; EUbusiness 2010; Junek
of smuggled cigarettes with a market value of over
2011). Police forces have also observed the use of off-
PLN65,000 (Lisicki 2009, 16).
road vehicles and tractors at green borders (Frontex
2012, 20).
• Road transport smuggling takes place both on
highways from Eastern Europe and Lithuania to
Poland and roads to Germany, Czech Republic, and
Slovakia (Figure 41, p.81) (Lisicki 2009, 10-11).
•• Both OC and individual smugglers exploit railways.
• OC exploits railway cargo traffic to hide and enter large
volumes of illicit products, while individual smugglers
secrete cigarettes in passenger carriages. In many
cases, the smuggler remains unknown because
Customs services find cigarettes in hidden places and
no passenger admits that the cigarettes belong to them
(Lisicki 2009, 10).
• Cargo traffic flows across the border crossing points
of Skandawa and Braniewo with Russia, Terespol,
Małaszewicze, Kuźnica and Siemianówka with
Belarus and Dorohusk, Medyka-Żurawica, Hrubieszów
and Werchrata with Ukraine. Individual smugglers
concentrate on short-distance international trains
crossing the borders at Braniewo, Czeremcha,
Dorohusk, Krościenko, Kuźnica, Przemyśl, and
Terespol (Figure 41, p.81) (Lisicki 2009, 10).
Police intercepted an Audi carrying 20 thousand
packs of cigarettes without Polish excise stamps.
The value of these cigarettes on the black market
would have been about PLN200,000. 42-year-old
Jacek W. and 33-year-old Daniel T. were arrested.
Both of them had already been punished for similar
offences. (Komenda Główna Policji 2012).
• Customs agencies have intercepted cigarettes
concealed within shipments of all kinds, from footballs
to horse food (Shleynov et al. 2008; EUbusiness 2010;
European Commission 2012a).
•• The modus operandi of ants.
• Ants cross borders several times a day to buy
lower-priced products in neighbouring countries
(see box The experience of Mlynarski, p.81). They
carry cigarettes in their luggage or on their bodies in
outer clothing. The goods are then resold in street
markets around Poland (Ciecierski 2002; Lisicki 2009).
• Medyka in the South-East is the principal pedestrian
border crossing for the ITTP (Figure 41, p.81).
Seizures indicate that individual smugglers traffic
mostly in LM, Prima and Classic (Lisicki 2009).
•• Smugglers make use of corruption to bring
THE EXPERIENCE OF MLYNARSKI
cigarettes into Poland.
Mlynarski, a 25-year-old unemployed builder
• The high profits deriving from the ITTP enable
crosses the Ukrainian border as many as four times
smugglers to corrupt customs and police officers
a night. Each time, he returns with at least one
to facilitate the entry and transfer of illicit tobacco
carton of 200 cigarettes, which he sells in the bars
products. In addition to public officials, smugglers
of his home town, Przemysl, 15 km from the EU’s
bribe warehouse owners, truckers and train drivers
eastern frontier (Andrusz 2008).
(Shleynov et al. 2008; Lentowicz 2010).
•• Large-scale traffickers also use sea transport.
•• Smuggling schemes based on the use of postalcourier services and Internet are emerging (WHO
• Smugglers target the ports of Gdynia and Szczecin
2009, 33).
on the Baltic Sea mainly to import Chinese cigarettes
• Disclosures of the postal smuggling of cigarettes
(Figure 41). Experts consider the impact of this kind of
smuggling to be marginal. Nevertheless, the two ports
numbered 207 in 2009 and 356 in 2010; in 2011, the
are hotspots for tobacco seizures (Figure 42, p.82)
number dropped to 181 because raw and unbranded
(WHO 2009; Ministry of the Interior 2012, 171-172).
tobacco replaced cigarettes. In 2009, four disclosures
of tobacco occurred. In 2010, 2,428 seizures of
• Traffickers use small boats to move tobacco products
tobacco were made in the postal service, and in 2011
along and across the River Bug, which marks the
the number grew to 6,131 (Ministry of the Interior
border between Poland, Ukraine and Belarus (Frontex
2012, 183).
2012, 20).
81
Figure 41. Border-smuggling hot spots
SWEDEN
LITHUANIA
Bezledy
Gdynia
Braniewo
RUSSIA
Goldap
Skandawa
BELARUS
Szczecin
Kuznica
E28 A6
Bialystok
Bobrowniki
Siemianowka
Czeremcha
E30 A2
Polowce
Malaszewicze Terespol
GERMANY
Slawatycze
E40 A4
Dorohusk
Hrubieszow
Werchrata
CZECH REPUBLIC
Zurawica
Smuggling border crossing points
Kroscienko
Critical areas
Ports
Cargo trains
Exit road transportations
Short distance trains
Entry road transportations
AUSTRIA
Przemysl
Hrebenne
Korczowa
Medyka
UKRAINE
SLOVAKIA
HUNGARY
Zosin
ROMANIA
POLAND
E36
Source: Transcrime elaboration on RILO (2010) data
The four components
• In the period 2009-2011, the ITTP on the Internet
• The purchase of illicit products from acquaintances is
expanded (Ministry of Finance 2012c, 12).
a common way to save on tobacco, and with low risks
(Message House Agencja PR 2006).
•• Open markets are the main points of sale for illicit
•• Smuggling, especially of cigarettes, is
tobacco products.
increasingly fragmented.
• Consumers purchase illicit cigarettes mostly from
street vendors (83.0%) and in open markets (42.4%)
THE ITTP IN THE OPEN MARKETS
(Ciecierski 2007, 19). In the East, consumers may
directly purchase cigarettes from the smugglers and
Smugglers who sell cigarettes in open markets today
from whorehouses. In central Poland, distribution of
tend to have a clear division of roles. A first person
illicit tobacco products mainly takes place in open air
takes the order; a second person reports the order
markets (Niemczyk 2013).
to those who hold the goods in storage spaces. To
reduce the risks, lookouts warn of controls, and the
people offering goods tend to carry only a single
• Actions by the Customs Service are increasing also in
areas far from the borders, forcing smugglers to take
pack or empty packs of cigarettes. They provide
precautions (see box The ITTP in the open markets)
larger amounts only after reaching agreement with
(Message House Agencja PR 2006; Niemczyk 2013).
the purchaser (Ministry of Finance 2012c, 8). On
However, experts consider control over these places
average, the consumers of illicit cigarettes buy three
to be low. Eventually, corruption might reduce controls’
times more packs per each purchase than do buyers
effectiveness (Message House Agencja PR 2006;
of legal cigarettes (Message House Agencja PR
Ciecierski 2007, 4-19; Niemczyk 2013).
2006, 60).
82
Figure 42. Cigarette seizure hotspots, 2008-2010
Source: Transcrime elaboration on RILO (2010) data
Gdynia
Olsztyn
Szczecin
Bialystok
Torun
Rzepin
Poznan
Warszawa
Biala Podlaska
Lódz
Wroclaw
Kielce
Opole
Katowice
Penetration of the ITTP
< 5.0%
5.0% - 10.0%
10.1% - 20.0%
> 20.0%
Number of seized cigarettes
130,000,000
2008
2009
2010
Kraków
Przemysl
• The EPS of the third quarter of 2012 found that the
• Smugglers tend to subdivide their loads so as not
to lose them entirely in the case of detection (RILO
north-eastern regions of the Podlaskie (35.6%),
2010). In 2011, the Customs Service reported more
Warminsko-Mazurskie (32.3%) and Lubelskie (28.1%)
individual disclosures than it did in 2009 and in 2010;
had the highest levels of non-domestic cigarettes
however, it intercepted a smaller amount of cigarettes.
(Figure 43) 53 (ALMARES 2012).
This trend is particularly evident in relation to seizures
• Warminsko-Mazurskie and Lubelskie have the highest
on road transport vehicles, in bazaars, and in open
markets (see Enforcement, p.51) (Ministry of the
penetrations of Jin Ling; 35.2% and 7.8% of
non-domestic cigarettes respectively (ALMARES
2012). These figures testify that cross-border
THE GEOGRAPHICAL DISTRIBUTION
purchasing may only partially explain cross-regional
differences in the level of non-domestic cigarettes.
•• The ITTP is much more widespread in the East of
• At certain times in the recent past, the share of illicit
the country.
cigarettes in these eastern regions has been even
• The available sources indicate strong and persistent
higher, approaching 50% of the regional tobacco
regional disparities and a greater diffusion of
market (Figure 43) (Message House Agencja PR
the ITTP in the eastern regions (Gumkowski,
2006; Biznes 2011; ALMARES 2012).
Przewozniak, and Zatonski 2006; Shleynov et al.
2008; WHO 2009; EUbusiness 2010; ALMARES
2012).
83
Source: Transcrime elaboration on ALMARES (2012) data
33 36
44 48 48
38
6 8 3 3 3
Mecklenburg-West Pomerania,
Brandeburg, Saxony Anhalt
9 10 12 11 12
52 55
Sleswick-Holsatia, Hamburg,
Bremen, Lower Saxony
44
Zachodniopomorskien
50 45
40 41
48 46
40
North Rhine-Westphalia
8 9 12 10 12
Baden-Württemberg
11 6 7 9
Thuringia, Saxony
Lubuskie
3 4 4 3 1
21 20
Wielkopolskie
27 24
31
13
24 23
22
13
1 2 2 3 3
Opolskie
7
14
Łódzkie
46 48
Mazowieckie
8 9 12
11
4
11
4 4
Świętokrzyskie
7 10 8 6 8
Małopolskie
40 44
Podlaskie
20 23
17
2 1 3 4 5
Śląskie
20 22 23
Warmińsko-Mazurskie
33 30 27
27
25
Lubelskie
29
15
12 9
5
Podkarpackie
Bavaria
EPS 2008 %
EPS 2009 %
EPS 2010 %
EPS 2011 %
EPS 2012 %
53. In these bordering regions of the East, the number of
cross-border purchasers is probably higher than in the rest of the
country, so that that the share of illicit cigarettes among
non-domestic cigarettes is lower.
POLAND
Heesse, Saaarland,
Rhineland-Palatinate
4 2 1 7 5
Dolnośląskie
10 12 10 10 11
4
Kujawsko-Pomorskie
Berlin
19 15 14 14
12
Pomorskie
3 1 2 2 3
38
23
15 13
Figure 43. Geographical distribution of non-domestic packs in Poland and Germany, 2008-2012
2
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2007 caused the removal of customs barriers
90%
25.3
80%
8.2
8.7
18.3the
decreased,
favouring
3.2
5.1
23.4
60%
•• Conversely, the penetration of the19.3ITTP is low in
47.0
58.8
30%
49.1
• Świętokrzyskie (3.8%), Pomorskie (3.2%),
20%
48.5
Zachodniopomorkskie (3.0%), Opolskie
(2.9%),
10%
Wielkopolskie (0.5%)
22.1 have the lowest shares of non-
36.8
2.1
0%
2007
Belarus
13.0
6.5
domestic
packs
2008
2009
(ALMARES 2012).
2010
2011
2012
• In Pomorskie,
Świętokrzyskie and Opolskie, police
Russia
Moldova
Other countries
Ukraine
25%
20%
15%
10%
5%
0%
Central
South
East
Illicit purchasers
Northwest Southwest
North
Smoking prevalence
never discovered any illicit tobacco manufacturing
facility (Figure 40, p.78). The scarce local production
contributes to explain the relatively low level of the
ITTP in these areas.
•• Shares of smokers purchasing illicit cigarettes
reflect differences in the levels of the ITTP.
84
30%
12.7
14.0
58.7
40%
2012
35%
17.9
increment
of the ITTP
the West and the South. 23.5
50%
2011
Source: Transcrime elaboration on GATS (2010) data
1.5 2013).
in this area
16.8 (RILO 2010, 15; Niemczyk
7.5
17.1
18.4
70%
2010
Figure 44. Share of smokers purchasing illicit cigarettes by area
between Lithuania and Poland. Control along this
16.3
border
2009
KPMG
• The entry into force of Schengen Agreement in
100%
2008
The four components
Smoking prevalence
0
• In the East (15.5%) and in the North (13.0%) the share
•• Consumption of illicit tobacco does not reflect the
differences in smoking prevalence.
• Regional data do not show a correlation between
smoking prevalence and the ITTP. In Eastern Poland,
where the smoking prevalence is the lowest, the
purchasing of illicit products is more widespread than
in the rest of the country. The opposite is the case
of people purchasing illicit tobacco is higher than in
in the South, where there is the highest smoking
the rest of the country. Again, the South (4.3%) and
prevalence and the lowest share of consumers of illicit
the South-West (4.6%) record the lowest shares of
products (Figure 44) (The Maria Skłodowska-Curie
smokers purchasing illicit tobacco (WHO 2011a, 116).
Institute, Medical University of Warsaw, and Centers
for Disease Control and Prevention 2010).
•• Proximity to the lucrative German market may
reduce the availability of illicit cigarettes in
Western Poland.
• The price differential between legal cigarettes in
Poland and Germany is high. In Germany, Marlboro
•• In general, the correlation between illicit smoking
and the most common economic indicators is
weak at regional level.
• Western Poland is on average better off than Eastern
cost 81% more than in Poland and the cheapest
Poland and has a lower level of the ITTP. However,
German brand costs 89% more than the cheapest
none of the most common economic indicators is
Polish brand (as of July 2012) (Figure 33, p.69) (Philip
a good predictor of the shares of non-domestic
Morris GMBH 2012).
cigarettes at regional level.
• Thus the return on smuggled cigarettes in Germany
may be significantly higher than in Poland (Message
House Agencja PR 2006, 55; Drewnowska and
Lentowicz 2011b; Ministry of the Interior 2012).
Consequently, smugglers prefer to supply the eastern
part of Germany instead of Western Poland, thus
partially explaining the strong regional difference of
ITTP in Poland (Figure 43, p.83) (Niemczyk 2013).
85
POLAND
FRAMING THE
COMPONENTS
IN THE
DRIVERS
This chapter analyses the interaction between the drivers
(discussed in Chapter 1) and the components of the ITTP
(Chapter 2). It draws on the information provided in the
previous analyses, and identifies the four key factors
of the ITTP (next subsection). These are fundamental
determinants of the illicit trade, and they affect all of
its components. Hereafter, four subsections analyse
how the five drivers affect the key factors and in turn
the components of the ITTP. Each subsection analyses
how the various elements of the drivers influence
THE FOUR KEY FACTORS OF THE ITTP
The analyses presented in the previous chapter
highlighted four key factors influencing the ITTP in
Poland: accessibility, availability, profitability, risk.
•• Accessibility: the price of illicit tobacco is a
crucial factor in determining the scope and
prevalence of the ITTP.
the demand, supply, products, modus operandi and
geographical distribution of the ITTP.
87
Framing the components in the drivers
• Any growth in the price differential between legal and
• The Polish tax level and structure provide incentives
illegal products increases the relative accessibility and
for both large-scale smugglers and local distributors,
attractiveness of illicit tobacco. In Poland, tobacco
encouraging the ITTP (see The supply, p.68). In
taxation above the inflation rate has caused large
Poland, the share of taxes in the retail price is the
price increases, especially after 2006 (WHO 2009, 36;
fifth highest in the EU. The amount of total taxes per
Gembicki 2011, 16; Euromonitor International 2012b,
1,000 sticks is lower than in other EU countries, but
11).
it is higher than in eastern neighbouring countries
(WHO 2012; European Commission 2013). In Poland,
•• Availability: the diffusion of illicit tobacco
products has a major impact on the ITTP.
the retail price of illicit tobacco is much lower than the
legal price (around 65% less) (Joossens et al. 2009;
Otto 2013). This creates very high margins for the
• The easier it is to find and buy illegal products,
the greater the likelihood of their diffusion in a
specific area. Poland has a high availability of illicit
ITTP (Melzer 2010; Transcrime 2012c).
tobacco products due to its proximity to the main
and the sanctions imposable affect the diffusion
exporter countries of illicit tobacco and to a significant
of the ITTP.
presence of illicit manufacturers within the country
(WHO 2009; Joossens 2011; Ministry of the Interior
2012).
• The available sanctions do not deter the ITTP
(Lisicki 2009, 9; Lentowicz 2010). In particular, the
penalties for smuggling are relatively low. The crime
• Poland’s position incentivises and facilitates the
88
of producing illegal tobacco products is punished
ITTP (Joossens 2011; 2012). Poland borders on
with imprisonment from one to three years. However,
countries with lower-priced illicit cigarettes to the East;
a serious case of large-scale counterfeiting and
to the West lie the EU markets, where smugglers can
distribution may incur a penalty of seven years and
obtain high returns by re-exporting the illicit products
six months of imprisonment (see Hypothetical case,
(Ministry of Finance 2012a).
p.58).
• The availability of illicit tobacco should be
• Increasing law enforcement actions against
considered in relation to the availability of genuine
the ITTP may yield important results in the
products. Prospected restrictions on access to legal
forthcoming years. The constant growth of
products (i.e. the ban on menthol and slim cigarettes)
tobacco seizures is indicative of this positive trend.
may increase the demand for illicit tobacco and
Measures envisaged in the Customs Service Strategy
therefore stimulate the ITTP (Coelho and Arink 2013,
for the fight against smuggling and ITTP for the
30).
years 2012-2015, such as reinforcement of border
controls, increasing international collaboration, and
activity due to the high income that it offers
compared with its operational costs.
• The ITTP provides very high incomes because
most illicit tobacco products pay no, or very limited,
taxes. At the same time, cigarettes are the commodity
with the highest fiscal value per weight (Joossens
1998, 149-150).
employment of cutting-edge equipment, may make
the ITTP riskier (Ministry of Finance 2012c).
Chapter 3: Framing the components in the drivers
Figure 45. The interaction between the demand for illicit tobacco and the five drivers
negative effect
society & economy
legal market
ACCESSIBILITY
illicit tobacco may enable
ACCESSIBILITY:
unemployed and lower-income
people, especially from Eastern
increases in the prices of
legal tobacco products may
Poland, to maintain their
smoking habits
stimulate the demand for
cheap and illicit tobacco
ACCESSIBILITY:
the wide price differential
between legal and illegal
products increases the relative
accessibility of illicit tobacco,
fuelling its demand
enforcement
AVAILABILITY:
RISK:
the increasing popularity of
HRT may open new markets
the lack of awareness
campaigns on the
for the ITTP
consequences of illicit tobacco
consumption prevents
reduction of the black market’s
clients
ACCESSIBILITY:
economic growth eases
the budget constraints of
households and may reduce
recourse to the ITTP
DEMAND FOR
ILLICIT TOBACCO
regulation
crime environment
ACCESSIBILITY:
high tax incidence on tobacco
products makes them less
accessible and may push
consumers towards illicit
products
the habit of consuming
smuggled and counterfeit
products regards the tobacco
market and contributes to
expanding the ITTP
AVAILABILITY:
AVAILABILITY:
the prohibition on the use
of vending machines to sell
tobacco products may create
an illicit demand when legal
retailers are closed
high and growing cannabis
prevalence among young Poles
may favour the expansion of
the ITTP by providing it with
distribution channels
There are multiple interactions between the drivers and
the demand for illicit tobacco (Figure 45). In particular,
the main factors affecting the demand are the
accessibility and the availability of illicit tobacco.
between the five drivers and the demand for illicit
• Any growth in the price differential between legal and
illegal products increases the relative accessibility
of illicit tobacco. In Poland, since EU accession,
tobacco taxation has risen above the inflation rate
and caused large price increases. This may induce
price-concerned consumers to purchase illicit tobacco
(WHO 2009, 36; Gembicki 2011, 16; Euromonitor
• Poland has a growing economy, but the wealth
level is still quite low and unemployment remains
a concern (see Society and Economy, p.21). In the
eastern regions, where these problems are more
severe, the purchase of illicit tobacco products may
enable smokers to maintain their desired level of
consumption.
POLAND
There follow some of the most important interactions
Society and economy
89
ACCESSIBILITY:
THE DEMAND FOR ILLICIT TOBACCO AND
THE DRIVERS
tobacco.
positive effect
• Rising cigarette prices cause downtrading because
• After accession to the EU in 2004, Poland increased
most price-sensitive consumers may find difficulties to
its tobacco taxation (European Commission 2013).
afford ready-made cigarettes. As a result, the demand
Heavy smokers and consumers in deprived
for HRT is increasing in both the licit and illicit markets
circumstances, especially in the eastern regions, find
(WHO 2009; Tokarski 2012).
these increases less acceptable and may turn to the
black market (Euromonitor International 2012b).
Legal market
Crime environment
• Significant increases in tobacco taxation have
resulted in higher retail prices. This has stimulated
• In Poland, there is widespread acceptance of
a certain downtrading of tobacco products (as
counterfeiting (Szoszuk and Barchanski 2009;
indicated by the growth in the consumption of
Nowak 2012) this may favour the ITTP. In 2011,
smoking tobacco) and made legal tobacco products
cigarettes were the most frequently seized item
less accessible. The ITTP has grown remarkably
among counterfeit products (Ministry of the Interior
after these increases in retail prices (Euromonitor
2012, 167).
• The increase in cannabis traffic and consumption
Regulation
among young people (see Crime environment, p.45)
may lead to an increase in the ITTP, since the two
• Regulation may positively or negatively affect the
traffics may share same distribution channels.
availability of legal/illegal products. Restrictions on
availability create opportunities for illicit products.
90
• The prohibition on vending machines may foster
Enforcement
• The lack of public awareness campaigns on the
the demand for illicit tobacco especially when legal
consequences of consuming illicit tobacco products
retailers are closed.
may prevent reduction of the black market (see
Enforcement, p.51).
• The planned ban of menthol and slim cigarettes
may accidentally increase the attractiveness of
the black market among the consumers of these
THE SUPPLY OF ILLICIT TOBACCO AND THE
DRIVERS
products (Coelho and Arink 2013).
Profitability, availability and risk are crucial for the
• The ban on selling tobacco to minors may involuntarily
supply. This suggests that actions tackling the supply
reinforce the segment of the illicit market composed
side of the ITTP should aim at reducing the availability
of young people without access to the legal market.
and the profitability of illicit tobacco and at increasing the
More than half of Polish smokers start to smoke
risks for suppliers (Figure 46, p.91).
before turning eighteen (see Legal market, p.27).
For these reasons, the illicit circuits may become
distribution channels for young smokers (Stop18
between the five drivers and the supply of illicit tobacco.
2012, 16).
• In 2012, green leaf became popular because of the
lack of excise duty on it. In 2013, the government
Society and economy
• Many smugglers come from eastern regions,
closed this loophole, but part of the demand for this
where scarce job opportunities and proximity
product shifted to the black market (KPMG 2013, 155;
to ample illicit markets provide incentives for
Niemczyk 2013).
participating in the ITTP (Andrusz 2008; WHO 2009,
33).
Figure 46. The interaction between the supply of illicit tobacco and the five drivers
negative effect
positive effect
legal market
enforcement
PROFITABILITY:
the low price of tobacco products
in neighbouring countries may
RISK:
the increasing detection rate
and prosecutions against OC
favour bootlegging
PROFITABILITY:
the strong devaluation of the
Belarusian Ruble may provide
incentives for the ITTP
society & economy
members may discourage
involvement in the ITTP
RISK:
the intensification of border
collaboration may increase the
risk of detection
AVAILABILITY:
the reforms of the tobacco
PROFITABILITY & RISK:
market result in a surplus of
raw tobacco and manufacturing
economic difficulties and
the social acceptance of
RISK:
low penalties for smuggling
make the ITTP attractive to
criminals
equipment which may flow into
illicit productions
smuggling provide incentives
for participating in the ITTP,
especially in eastern regions
RISK:
RISK:
regional differences in levels of
enforcement may contribute to
explaining the discrepancies in
the penetration of the ITTP
SUPPLY OF
ILLICIT TOBACCO
distribution via personal
networks decreases the risk of
detection for smugglers
regulation
crime environment
AVAILABILITY:
high taxation yields high profits
for the ITTP through tax
evasion
the presence of international
OC groups may facilitate the
organisation of large-scale
smuggling schemes
AVAILABILTY:
proximity to markets with a high
availability of illicit whites may
boost the ITTP
• The purchase of illicit products from
acquaintances is a common way to save on
tobacco, and with low risks (Message House
Legal market
• The lower prices of tobacco products in
eastern neighbouring countries heighten the
expand the ITTP.
attractiveness of bootlegging (Komenda Główna
Policji 2010; Ministry of the Interior 2012). Similarly,
• Some smugglers come from Ukraine. Ukrainians
the higher prices of cigarettes in Western
exploit the proximity, the price differential, and the
countries encourage smugglers to extend their
scarcity of controls (Lisicki 2009).
ITTP to the EU (Shleynov et al. 2008; Locke 2010;
Ministry of the Interior 2012).
POLAND
Agencja PR 2006). These practices may contribute to
91
PROFITABILITY:
• In 2011, Belarus strongly devaluated its currency,
thus increasing the price gap between Polish and
Belarusian products and attracting cross-border
Enforcement
• Polish law enforcement is becoming more
purchasers and smugglers (Euromonitor International
effective. The overall crime detection rate is
2012c).
increasing and activities against the ITTP have
escalated, as testified by the growing number of
• In 2009, the government reformed and deregulated
seizures (see Enforcement, p.51). Efficacious actions
the tobacco market. The consequences have
by the police forces may be an important instrument in
been laxer control over the supply chain and a
combating the growing ITTP.
reduction in the number of actors in the industry. This
transformation may facilitate an uncontrolled flow
• Greater international cooperation, the use of
of raw tobacco and machinery to illicit production
modern detection instruments, and other actions
(Ciecierski, Cherukupalli, and Weresa 2011; Ministry
foreseen by the “Customs Service Strategy for the
of the Interior 2012).
fight against smuggling and ITTP for the years 20122015”, may prove effective in increasing the risks
Regulation
for traffickers (see Enforcement, p.51). Moreover,
the mounting scale of smuggling and the increase
• Diverting tobacco products into the illicit market,
where sales are tax free, generates considerable
cooperation in the fight against the ITTP by the
margins for illicit traders. Increases in tobacco
Customs Service with other law enforcement agencies
taxation and the possibility to exploit cross-border
(WHO 2009, 33).
tax differentials amplify these profits (Lentowicz
2010; Joossens and Raw 2012, 232).
92
in illegal cigarette manufacturing have led to greater
• The available sanctions may not be sufficient to
deter the ITTP (Lisicki 2009, 9; Lentowicz 2010). In
Crime environment
particular, the penalties for smuggling are relatively
low. Penalties for manufacturing illicit tobacco
• In Poland, there is medium-high activity by Polish
products range from one to three years. A serious
and international OC groups. They operate across
case of large-scale counterfeiting and distribution
borders mainly in drug trafficking, vehicle thefts,
may incur a penalty of seven years and six months of
food counterfeiting and human trafficking (see Crime
imprisonment (see Hypothetical case, p.58).
environment, p. 45) (van Dijk 2008; U.S. Department
of State 2011, 4; Europol 2011b, 17). The presence of
• The Police report a lower number of crimes in
these groups may facilitate the organisation of large-
eastern regions than in western regions (Ministry of
scale smuggling schemes.
the Interior 2012, 10). The discrepancy may indicate
a lower level of law enforcement in eastern regions
• Poland shares its northern and eastern borders with
liable to stimulate higher participation in the ITTP in
the Russian Federation, Ukraine and Belarus, the
those regions together with a greater availability of
main country of origin of European illicit tobacco
illicit tobacco products. The relation between Polish
products. This is a crucial factor in determining the
local law enforcement and penetration of the ITTP
level of both individual and large-scale smuggling
warrants deeper analysis.
(Joossens 2011; 2012).
• The use of corruption enables smugglers to
introduce and distribute illicit tobacco products
into Poland at low risk (Shleynov et al. 2008;
Lentowicz 2010).
Figure 47. The interaction between the products and the five drivers
negative effect
positive effect
enforcement
RISK:
poor law enforcement in
complicates anti-ITTP policies
RISK:
legal market
cigarettes in eastern
neighbouring countries may
actions on specific types
of ITTP may shift criminals
towards other products (i.e.
counterfeits, illicit whites)
favour the smuggling of
genuine brands
large seizures of illicit tobacco
AVAILABILITY:
the lower prices of legal
AVAILABILITY:
may decrease the short-term
availability of illicit tobacco
society & economy
products
AVAILABILITY:
proximity to the two main
producing countries of illicit
whites may favour the diffusion
RISK:
ILLICIT TOBACCO
PRODUCTS
of this product
regulation
the implementation of the
Strategy 2012-2015 may make
the ITTP riskier
crime environment
AVAILABILITY:
AVAILABILITY:
the ban on the sale of tobacco
illicit flows across Poland may
from vending machines may
increase the need of consumers
simplify the entry of illicit tobacco
products
THE PRODUCTS AND THE DRIVERS
Many different illicit tobacco products are available in
Poland: smuggled cigarettes, counterfeit cigarettes,
unbranded HRT, and most of all illicit whites (ALMARES
2012). Availability is the key element in the analysis of
illicit products (Figure 47).
between the five drivers and illicit tobacco products.
Society and economy
• Geographical proximity to the main producers of
illicit whites located in the Russian Federation and
in Belarus may foster the flow of these products to
Poland (Shleynov et al. 2008; KPMG 2013).
types of illicit products consumed by smokers.
For example, there is a growing interest among
consumers in HRT (see Legal market, p.27). This may
stimulate the illicit supply of this product (Euromonitor
International 2012b).
Legal market
• Proximity to low-price markets may facilitate
the contraband of genuine cigarettes in Poland.
Despite this, illicit whites are the dominant product on
the illicit market (see The products, p.72).
Regulation
• Regulation may positively or negatively affect the
availability of legal/illegal products. Restrictions on
availability create opportunities for illicit products.
POLAND
• Social, cultural and economic factors affect the
to resort to the black market
93
• The ban on the sale of tobacco products from
• The effectiveness of the law enforcement
vending machines, reducing the opportunities
agencies in combating the ITTP is improving (see
to buy legal tobacco products, may increase the
Enforcement, p.51). The growing effectiveness is
attractiveness of the black market.
evidenced by the larger number of seizures and raids
against illicit manufacturers (WHO 2009, 36; Warsaw
• The EC is working on a legislation banning menthol,
Business Journal 2011).
other flavoured cigarettes and slim cigarettes.
These two categories are particularly appreciated
• The implementation of the measures envisaged by
by Polish smokers and their removal from the legal
the “Customs Service Strategy for the fight against
supply may involuntarily push some of their consumers
smuggling and ITTP for the years 2012-2015” may
towards the illicit market (Coelho and Arink 2013).
be effective in reducing the ITTP in and across Poland
(Ministry of Finance 2012c).
Crime environment
• OC groups, active in the country, may have the
economic and organisational resources to establish
THE MODUS OPERANDI AND
GEOGRAPHICAL DISTRIBUTION OF THE
ITTP AND THE DRIVERS
illicit tobacco factories and to manufacture counterfeit
94
cigarettes (Europol 2011b). Poland’s EU membership
Risk and availability play a crucial role in influencing
and the availability of a skilled labour force from
the modus operandi and the geographical
abandoned Bulgarian manufacturers are other factors
distribution of the ITTP (Figure 48). Indeed, criminals
that favour the growing production of illicit tobacco in
may produce and distribute illicit tobacco with different
Poland (Ministry of the Interior 2012, 170-171).
methods and through different channels.
• Tobacco smugglers may exploit the illicit
routes used for drugs, migrants, and smuggled
between the five drivers and the modus operandi and
commodities (see Crime environment, p.45).
geographical distribution of the ITTP.
Enforcement
• A certain weakness of surveillance in neighbouring
Society and economy
• Due to its position, in Poland, illicit cigarettes bound
countries may facilitate the entry of illicit products
for the internal market flow together with illicit
into Poland (Kaplan 2009). The lack of controls
cigarettes targeting the Western EU markets. Large
regards both the customs and the factories producing
price differentials between Eastern countries and
illicit whites, which are widespread in the Russian
Poland and between Poland and Western markets
Federation and in Belarus.
drive these flows (Shleynov et al. 2008; Locke 2010;
Ministry of the Interior 2012).
• Cooperation with source countries is crucial
(Europol 2011a, 25). Currently, there is no legal
Legal market
framework for international cooperation against
the ITTP. In November 2012, the WHO approved
• In the countries bordering on Poland to the West,
a Protocol on Eliminating Illicit Trade in Tobacco
the price of tobacco products is significantly
Products within the WHO Framework Convention
higher than in Poland (Ministry of Finance 2012a).
on Tobacco Control. However, several studies have
These price differences may induce traffickers to
raised doubts about its actual impact (Boister 2010;
extend the ITTP to other EU Member States like
Transcrime 2012b).
Germany and the UK (see Modus operandi and
geographical distribution, p.78).
Figure 48. The interaction between the modus operandi and the geographical distribution of the ITTP and the five drivers
positive effect
negative effect
legal market
PROFITABILITY:
higher prices in Western Europe
may provide incentives to
transfer illicit tobacco products
to the EU
enforcement
RISK:
RISK:
actions foreseen by the
Strategy 2012-2015 may limit
AVAILABILITY:
the ITTP
regional differences in law
enforcement may lead to
dissimilar levels of the ITTP
Poland’s position between EU
and eastern countries may
stimulate the ITTP
RISK:
RISK:
weaknesses in border patrolling
by neighbouring countries may
reduce the effectiveness of
enforcement activities at the
borders
internet and postal services may
function as new channels for
the distribution of illicit tobacco
products
RISK:
actions on specific types of
ITTP may direct criminals to
society & economy
PROFITABILITY:
low prices of tobacco products
in eastern neighbouring
countries may encourage
bootlegging
MODUS OPERANDI
and GEOGRAPHICAL
DISTRIBUTION
large seizures induce
smugglers to reduce and
subdivide their loads so that
they do not lose them entirely
in the case of detection
RISK:
other tobacco products (i.e.
counterfeiting)
95
RISK:
the Schengen system may
facilitate smuggling to other EU
Member States
RISK:
Schengen may favour
transnational investigations, thus
increasing the risk of detection
crime environment
AVAILABILITY:
the presence of OC groups
may facilitate the organisation
of large-scale smuggling
RISK:
informal economy contexts
such as open markets make it
difficult to control the activities
of tobacco retailers
Regulation
Europe became easier after Poland joined the EU
(in 2004) and signed the Schengen Agreement
for illicit and criminal activities (Albrecht and
(in 2007). This has increased Poland’s role as
Kilchling 2002; Morgan and Clarke 2006; Savona
an exporter of contraband cigarettes to Central
et al. 2006). The tobacco market is no exception.
and Western Europe (Locke 2010; Euromonitor
Recent studies have emphasised the unintended risks
associated with the regulation of the tobacco market
(Transcrime 2011a; Transcrime 2011b; Transcrime
2012a):
•On the other hand, transnational collaborations
between enforcement authorities have become
easier since Schengen Agreement, thus increasing
the risk of detection for criminals (Schmitz 2013).
POLAND
• Regulation may unwittingly create opportunities
•Trade and travel between Poland and Western
regulation
• A medium-low level of regulation of the tobacco
• Large seizures of illicit tobacco induce smugglers
industry with respect to the ITTP may be insufficient
to reduce the size of their loads. Smugglers
to stop the expansion of the black market. In regard
transport small loads of cigarettes. This is a means
to legal duties for manufacturers not to facilitate
not to lose the entire load, and it reduces the damage
smuggling and cooperation agreements between
in the case of detection and confiscation (RILO 2010).
national public bodies and tobacco companies
to prevent the ITTP, Poland relies exclusively on
• The increasing effectiveness of the fight against
voluntary agreements between the EC and the major
the ITTP has heightened the risk of detection along
tobacco companies (see Enforcement, p.51).
borders (see Enforcement, p.51). For this reason, OC
groups have installed their cigarette production
Crime environment
• The presence of OC groups may facilitate complex
directly in Poland (WHO 2009, 34; Europol 2011b).
• The weakness of the surveillance of the
smuggling schemes which require a certain level
neighbouring countries may facilitate the entry
of organisation and economic resources (von Lampe
of illicit products into Poland (Kaplan 2009). The
2001). These may regard:
lack of controls regards both the Customs and the
• the use of corruption to introduce illicit tobacco
manufacturers of illicit whites.
products into Poland (Shleynov et al. 2008; Lentowicz 2010),
• the counterfeiting of legitimate brands (Europol
2011b),
• diverting large volumes of cigarettes from their
legitimate supply chain (von Lampe 2001).
96
• Contexts characterised by informal economy, like
open markets, facilitate the sale of illicit tobacco
products (Joossens et al. 2000; Antonopoulos 2009).
Street vendors in open markets are the primary
channel for the distribution of illicit tobacco products in
Poland (Message House Agencja PR 2006; Ciecierski
2007, 4-19).
Enforcement
• Increasing law enforcement action against
the ITTP may yield important results in the
forthcoming years. Measures envisaged in the
Customs Service Strategy for the fight against
smuggling and ITTP for the years 2012-2015, such
as the strengthening of border controls, increasing
international collaboration, and employment of cuttingedge equipment, may make the ITTP riskier (Ministry
of Finance 2012c).
• The Police reports a lower number of crimes in
eastern regions than in western ones (Ministry of
the Interior 2012, 10). This strong discrepancy may
indicate a lower level of law enforcement in eastern
regions and may contribute to explain the higher level
of the ITTP in this area.
• Smugglers have increased their use of internet and
postal-courier services for ITTP purposes (Ministry of
the Interior 2012). Despite the increasing seizures,
these instruments allow traffickers to reduce their risks
and reach a wider demand.
CONCLUSIONS
This report provides the Polish country profile of the
•• Legal market: Poland is the main manufacturer of
Factbook on the Illicit Trade in Tobacco Products
tobacco products in Europe and the third exporter in
project. Considering the limited number of previous
the world. In 2009, the government deregulated and
studies and the lack of data, the results of this study
liberalised the tobacco market. The consequence has
are provisional. They offer a first analysis of the ITTP in
been an increase in the availability of raw tobacco
Poland and show that more research is needed in this
and disused machinery. The industry is also changing
field. The ITTP is a complex phenomenon comprising a
and growing under the influence of greater exports
variety of activities, products and actors. The analysis of
and the higher importance of multinational tobacco
the illicit trade must take into account a number of factors,
companies. With respect to consumption, increasing
which may significantly influence it.
prices drive down selling volumes and cause
prevalence is high in general, and increasing among
ITTP in Poland. The information gathered originates
women.
from academic literature, grey literature, open sources,
questionnaires and interviews with experts and
stakeholders.
THE FIVE DRIVERS
•• Regulation: tobacco market regulation is medium.
Taxation on cigarettes is among the highest in the
world but the country invests scant resources in
tobacco control policies. There is a medium-low level
of supply chain control, a medium-high level of control
Chapter 1 (The five drivers) of the report analysed in
on tobacco consumption, and a medium level of
detail the five drivers of the ITTP: society and economy,
control over sales, advertising and promotion.
regulation, legal market, crime environment and
enforcement. The five drivers are areas whose structures
may affect positively or negatively the ITTP.
•• Crime environment: Poland has low crime levels,
with medium-low corruption and medium informal
groups are active in the country. Drug prevalence
economic reforms gave Poland a solid and growing
is low; only the use of cannabis is quite widespread
economy and the possibility to integrate fully into the
among young people. Synthetic drugs have become
EU. Poland’s average wealth remains significantly
increasingly common.
below the EU and OECD averages also because of
large economic disparities within the country.
POLAND
economy. However, numerous organised crime
•• Society and economy: twenty years of social and
smokers to switch to cheaper products. Nevertheless,
This report has analysed the multiple facets of the
97
Conclusions
•• Enforcement: the duties of tobacco manufacturers
•• Modus operandi and geographical distribution:
in preventing the ITTP mainly derive from voluntary
smugglers mainly use motorways and railways
agreements between the industry and the European
connecting Poland and eastern neighbouring
Commission. The fight against the ITTP has
countries to introduce cigarettes into Poland.
augmented in recent years thanks to the greater
Traffickers who smuggle cigarettes into the EU bring
involvement of national agencies, international
them into Germany along highways. Counterfeiting
cooperation, and new equipment. Increased law
relies on the availability of raw tobacco and cheap
enforcement has led to a larger number of seizures.
machinery. Exploitation of the Internet and of postal
THE FOUR COMPONENTS OF THE ITTP
services by the ITTP has become increasingly
common in Poland. The phenomenon is much more
widespread and rooted it the East of the country.
Chapter 2 (The Four Components) discussed in detail
the characteristics of the illicit trade in Poland by framing
the illicit tobacco market in its four components: demand,
FRAMING THE COMPONENTS IN THE
DRIVERS
supply, products and modus operandi.
Chapter 3 (Framing the Components in the Drivers)
•• The demand: low price is the main driver of the
addressed the interactions between the drivers and the
demand for illicit tobacco. Avoiding taxes and buying
components of the ITTP. The analysis identified four key
tobacco products for half the legal price increases
factors with a fundamental role in Poland’s illicit market
the accessibility of these products and represents
(accessibility, availability, profitability and risk).
an opportunity for tobacco consumers. In Poland,
consumers can find illicit tobacco products on the
streets, in open markets, and on the Internet.
98
•• Accessibility: the price of illicit tobacco, and
particularly its relative price compared to legal
products, is a crucial factor in determining the scope
•• The supply: profitability, availability and risk are the
and prevalence of the ITTP.
main drivers of the supply of illicit tobacco and are
crucial factors for all the actors involved in the ITTP,
independently of their degree of organisation. In
•• Availability: the diffusion of illicit tobacco products
has an important impact on the ITTP.
Poland, organised groups and single smugglers are
involved in the supply chain of the ITTP. The proximity
of supplier countries of cheap/illicit tobacco to the East
activity owing to the high income that it offers
and of rich markets to the West contributes to making
compared with the operational costs.
Poland both a destination and a transit country for
illicit tobacco products.
and the imposable sanctions impact on the diffusion of
•• The products: it is difficult to assess precisely the
extent of the ITTP in Poland because there are no
official estimates of the illicit tobacco market. The
analyses available indicate that the impact of the ITTP
is increasing and that its penetration in the tobacco
market is above 13%. All kinds of illicit tobacco
products are available on the Polish black market.
the ITTP.
Conclusions
RECOMMENDATIONS FOR FURTHER
RESEARCH
The results of this study point out that it is necessary
to conduct further research on the ITTP.
• The availability of reliable, periodical official
estimates would facilitate research in any domain
concerning the ITTP.
• Analysis of illicit trade in unbranded HRT and loose
tobacco in Poland is deficient. Measuring the extent
of this phenomenon and determining the modus
operandi behind it may be a significant step forward in
understanding the ITTP.
• The collection of reliable and comprehensive data one
the volume of smuggling to the EU would be crucial
for significant analyses on this important aspect of the
Polish ITTP. A greater capacity to distinguish internal
In conclusion, the results of the study show that the ITTP
is a complex and multifaceted issue. Individual factors,
such as socio-demographic status and income, but also
structural conditions like proximity to countries with lowerpriced tobacco products should be taken into account in
the development of anti-ITTP strategies. Moreover, the
burden of rising taxes and a general favourable attitude
towards illicit tobacco products may be other important
factors. Given the complexity and the multitude of factors
involved, the ITTP cannot be reduced to a problem
relating exclusively to law enforcement and criminal
justice policy. It is necessary to adopt additional,
non-criminal measures to prevent illicit consumption,
and to reduce the corrupt practices that facilitate
smugglers’ activities. Finally, the government should
tackle the ITTP, especially in the eastern border regions,
with comprehensive strategies including criminal, noncriminal/administrative and other indirect measures,
for example through a wide-ranging situational crime
prevention approach.
traffic from smuggling to the rest of the EU would
make it possible to develop better strategies with
which to combat the ITTP both in Poland and in the
rest of Europe.
tobacco products are still lacking. Identifying the
socio-economic characteristics of consumers and
the reasons for their illicit purchases is essential. It
would enable the design of effective communication
strategies, prevent illicit behaviours, and reduce the
demand for illicit tobacco.
• A better understanding of how different levels of
law enforcement within the country affect the
penetration of the ITTP in the various regions
would help to distribute officers and equipment more
efficiently.
• Surveys and studies on the demand for illicit
99
POLAND
100
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