EU illicit cigarette trade rises 20% as counterfeit production shifts inside Europe

A new study commissioned by Philip Morris and conducted by KPMG shows that the illicit tobacco market in the European Union is expanding. Counterfeit cigarettes increased by about 20% in 2025, with roughly 42 billion illegal cigarettes—around 10% of total consumption—circulating in the bloc. The EU is losing an estimated €17 billion in tax revenue, and the illegal trade is siphoning billions from legitimate businesses.

According to Tracit deputy director Stefano Betti, tighter border controls have pushed criminal groups to move production inside the EU, making enforcement more complex. The illegal supply chain now relies heavily on online platforms, social‑media channels and messaging apps such as WhatsApp, dispersing small parcels that are harder to detect.

Philip Morris International’s Christos Harpantidis warned that the black market hampers legal market investment, noting the company’s recent multi‑billion‑euro investments in agricultural and production facilities in Italy. He called for a coordinated European response, emphasizing clearer regulations, moderate taxation and stronger cross‑border law‑enforcement cooperation.