American Chamber of Commerce member companies appreciate the increased activity by law enforcement agencies aimed at combating illegal manufacturing of tobacco products in Ukraine. We are grateful for the committed measures taken to combat the shadow excisable goods market in Ukraine. We welcome the actions taken to reduce the share of the illegal market.
At the same time, we urge to continue the active fight against the illegal market of excise goods. Representatives of the AmCham Ukraine member companies are ready to contribute actively and provide expertise to ensure an effective fight against the illicit trade of excise goods. AmCham Ukraine members have sent numerous requests to introduce measures on identifying the locations producing illicit excisable goods and putting a stop to these illegal activities.
Kantar Ukraine data on Monitoring Illegal Trade of Tobacco Products in Ukraine shows the level of illegal trade of tobacco products in Ukraine has multiplied over the past five years. Kantar Ukraine’s report from November 2021 showed an increase in the illegal trade to a historical maximum of 20.4%. Concurrently, the budget losses reached UAH 15.5 billion in 2021.
The illegal solid excisable goods market continues to grow in 2022. During the full-scale war in Ukraine the situation is getting worse, due to the suspension of domestic production by some AmCham member companies, disruption in logistics chains, shortages of solid excisable goods, and the lack of control on the market. Such conditions have a tremendous negative impact on companies' operational activities. In addition, the issue is worsened by the tax burden increasing on the industry.
