A debate jointly organised by The Parliament Magazine was told that some unscrupulous dealers were making up to €100,000 annually in the trade in companion pets that are often badly bred and at risk of spreading diseases.
Trafficking of pets, including wild and exotic animals, is increasingly linked to organised crime and also poses a public health risk, the event in Parliament on Wednesday heard.
Addressing the roundtable, 'Dogs and Cats involved in commercial practices,' UK MEP Daniel Dalton said, "We cannot turn a blind eye to this any longer."
Conservative deputy Dalton, who hosted the discussion on "this very important” issue, said the EU pet travel scheme, a system which allows animals to travel easily between member countries without undergoing quarantine, was being abused for commercial purposes.
"Some people are making extraordinary sums of money from smuggling pets, including puppies, from one member state to another. Most pet owners would be distraught if they knew the conditions in which these animals are kept."
Dalton, a member of Parliament's animal welfare intergroup, pointed out that 18 per cent of EU households own a dog and 26 per cent were cat owners, adding, "Most if not all of these people would want to know that companion animals which are being traded around Europe are treated well. Sadly, that is not the case."
Dalton, who wants the European Commission to promote the issue on its "animal platform", said, "The pet travel scheme is a good piece of legislation but it is being misused."
Another speaker, Paula Boyden, of the EU Dog and Cat Alliance, the event's joint organiser, pointed to a Commission study on the welfare of dogs and cats involved in commercial practices.
The study collected data from 12 representative member states, in which 85 per cent of the estimated total dog and 87 per cent of the estimated cat population in the EU are located.
The study, Boyden told the debate, covers both animal related concerns such as their health and welfare status as well as human ones, with the risks of pet transmitted diseases and of consumers' deception.
She said the EU study highlighted five main areas where the situation must be improved.
These areas are the breeding, the transport and the lack of knowledge and information for the keeping of pets, the discrepancies in market data of pets and the protection of the consumers. In particular, the study shows that most of the above mentioned problems could be solved by increasing traceability.
Boyden said, "What we are seeing, in some cases, is a total abuse of the scheme, including falsification of pet passports. It ranges from relatively minor offences to more serious indiscretions but, basically, it is the smuggling of animals."
The scheme had seen a "dramatic" rise in the number of cats and dogs being transported and traded around Europe, with a 64 per cent increase between 2011 and 2012 in the UK alone.
Figures show that as many as 46,000 cats and dogs are being traded between member states each month, said Boyden.
But many were being transported in sometimes appalling conditions, such as poorly ventilated vehicles, and on journeys - often from central European countries - that last up to 40 hours.
As well as matter of animal welfare, this also represented a consumer protection issue and posed a threat to public health as it meant pets with potentially serious diseases were being moved around Europe unchecked.
Both Dalton and Boyden said they support the adoption of an EU action plan to tackle the issue, with Boyden saying, "We clearly need better enforcement of existing legislation and better intelligence sharing between the authorities.
"But we also need to see an action plan to come out of the Commission study."
Further contribution came from Alf-Eckbert Fussel, acting head of unit at the Commission's health and food safety directorate, who pointed out that cats and dog welfare was included in current EU-wide legislation that also covers the wellbeing of other animals, including cattle, pigs and horses.
He said, "However, I have to point out there are limitations to what can be done when it comes to complete traceability of the movement of cats and dogs."