EU illicit cigarette market exceeds 10% of total consumption in 2025

A KPMG study for Philip Morris International finds that 41.8 billion illicit cigarettes were consumed in the European Union in 2025, representing 10.3 % of total cigarette sales and causing an estimated tax revenue loss of €16.7 billion. Counterfeit cigarettes now dominate the illegal market, with 18.3 billion units (44 % of illicit sales) and a year‑on‑year increase of over 20 %.

France accounts for the largest share of illegal consumption, 41.4 % (about 20.5 billion cigarettes), followed by Belgium (≈25 %) and the Netherlands (≈22 %). The United Kingdom remains the second‑largest market outside the EU with more than 7 billion illegal cigarettes. Other notable trends include a decline in Greece’s illicit share to 14.1 % and a reduction in Ukraine’s illegal volumes.

The report highlights a shift from traditional cross‑border smuggling to locally produced counterfeit products, with distribution increasingly using small parcel services, online platforms and even drones. Organized crime groups are adapting to these channels, linking the illicit tobacco trade to broader financial crime and money‑laundering schemes. Philip Morris officials warned that “counterfeits have become the main driver of the illegal cigarette market in the EU.”