“The world in general has experienced an increase in contraband sales,” despite enforcement of import and export controls, said Finance Minister Tonio Fenech yesterday.

“Smuggling remains a key problem in the cigarette trade and is likely to be the cause for disrupting legitimate sales in the near future,” he added.

Mr Fenech was speaking at the European Anti-Fraud Office (OLAF) annual meeting on cigarette smuggling, being held until tomorrow in St Julian’s.

Mr Fenech said Malta’s internal market was more prone to illegal activity due to higher prices of tobacco products when compared to prices in a number of foreign countries.

He explained that Malta experienced large-scale cigarette smuggling in transiting containers. Often, smuggling focused on well-known international brands, for instant recognition and confidence which resulted in quick sale.

Mainland operations by the Customs department have also proved to be significant, resulting in the seizure of varying quantities of cigarettes even though these were on a small scale when compared to those of other countries, he said.

He added that the government gave high consideration to the battle against cigarette smuggling, particularly due to the health issues involved in trafficking sub-standard counterfeit cigarettes as well as to safeguard the government’s revenue.

Sophisticated, non-intrusive inspection equipment used by the Customs department together with the skill and experience of Customs officials has proved to be invaluable to detect and determine the contents of suspicious merchandise, Mr Fenech said.

Meanwhile, rapid and timely information which could lead to the interdiction of illicit cigarette trade was of utmost importance to Customs operations world-wide, he added.

One of the most effective measures for reducing tobacco consumption, Mr Fenech said, was taxation. In the meantime, tobacco manufacturers opposed tax increases arguing that higher taxes were an incentive for smuggling. Thus, legal sales were reduced while illegal sales figures did not decrease.

This “fine thread” must be cut in order to find “an adequate balance” between the objectives of governments as well as the legal industry.