LONDON, June 11 (Reuters) - Tobacco smugglers and black

market salesmen are increasingly using technologies such as

social media and drones to deliver cigarettes to smokers in

Europe and avoid law enforcers, a report by consulting group

KPMG published on Wednesday found.

The report, produced annually and commissioned by Philip

Morris International ( PM ), looks at illegal consumption of

cigarettes on the continent - which big tobacco companies say

costs them sales and authorities say costs them tax revenues.

In 2024, KPMG found that almost 40 billion illicit

cigarettes were consumed across 38 European nations, based in

part on a study of empty packs collected in those countries. It

also cited interviews with law enforcement.

The gangs' flexible strategies have helped to drive a 10.8%

increase in illicit consumption versus 2023, according to KPMG,

which also attributed the rise to higher taxes and prices in

markets including France and the Netherlands.

The report said criminal groups had shifted towards

smuggling smaller packages, more often, via budget airlines.

They are also making greater use of rail and drones, and are

increasingly bypassing physical stores to sell directly to

consumers on social media, it continued.

The more recent change in tactics follows another shift from

2020, when the groups moved production closer to end-markets,

partly in response to the pandemic disruption, but also reducing

the chance of detection.

KPMG said in 2024 the groups had also begun holding less

inventory, which is reflected in a decrease in the size of

illicit cigarette seizures as the gangs mitigate their risks and

reduce the impact of raids by law enforcers.

Big tobacco companies say tax increases have driven growth

in illicit cigarette consumption.

Public health campaigners and institutions such as the World

Bank, however, have said such claims are overblown and that high

taxes can support public health by reducing tobacco consumption,

while generating revenues for governments.