An international survey by cigarette maker Philip Morris International has found that Malta had the biggest increase in legal sales of cigarettes in 2010, but it was also one of a few countries which had an increase in smuggled cigarettes.

The survey found that illicit trade in contraband and counterfeit cigarettes in the European Union in 2010 reached its highest level since studies began in 2006.

The study, conducted by KPMG, estimated that annual consumption of illicit cigarettes in the EU increased by 3.1 billion units in 2010 versus 2009 to an annualized total of 64.2 billion units, equating to approximately 10% of total cigarette consumption in the EU. The loss to national and EU revenues due to cigarette smuggling was estimated by the European Anti-Fraud Office (OLAF) to be approximately €10 billion per year.

KPMG has conducted this study every year as part of the landmark cooperation agreement between PMI, the European Commission and the EU member states.

Timothy Lindon, PMI's Chief Compliance Officer said the illegal cigarette market in the EU was now larger than the legal cigarette markets of France, Ireland and Finland combined

The survey found that Malta, Cyprus and Austria were the only countries in the EU which were experiencing growth in legal domestic sales, with the steepest increase being in Malta, at 4%

However the share of cigarette consumption in Malta accounted for by counterfeit and contraband increased to 10.8% in 2010.

Below: Counterfeit and contraband share of consumption