Drugs, weapons, people … There are markets of the great crime mafias that we all have in mind, but their coffers, more and more, also nourish other lucrative businesses that remain in the shadow. It is what happens with illicit cigarette traffic, an extra threat in full expansion that adds to other fragilities of our world. More subtle, apparently, but equally harmful.
commissioned by the Tabaquera company Philip Morris and released this Wednesday in Brussels, confirms how over the past year the problem has become more deep throughout the European Union (EU). In 2024, the smokers of the Union consumed 38.9 billion illicit cigarettes, which represents an increase of 10.8% compared to the previous year. It details the dossier that especially highlights the number of counterfeit cigarettes during the study period, 15.3 billion units, or what is the same, 20.2 % more. In the case of calls illicit whites -“Legally manufactured cigarettes but introduced to smuggling in countries where they have little or no official distribution”-8,200 million were reached, also up to 18%. In total, the consumption of non -legal products represents 9.2% of the total consumption of cigarettes in the old continent.
The problem has three essential aspects: financial, criminal and health. In the first case, the report calculates at 14,900 million euros the total tax losses for this marketing last year. They serve two buttons to compare: that figure is more than half of everything that is dedicated today to the Erasmus+ program (26.2 billion euros) and would have been sufficient to cover the EU budget from 2021 to 2027. A “massive source of resources” that do not end in public coffers because no taxes or fees have been paid and that, without going any further, could help raise -Cellevating the embers to his sardine- the Italian Alessandro Politi, director of the Nato Defense College Foundation, who has welcomed the presentation. “If these cigarettes are bought to criminals, money goes to unscrupulous criminals, not schools, hospitals or infrastructure.”
“If these cigarettes are bought to criminals, money goes to unscrupulous criminals, not schools, hospitals or infrastructure”
Then there is security. “Criminal money for tobacco is a real criminal threat,” says British Howard Pugh, a consultant in the fight against illicit trade. The mafias “have gone to tobacco due to the rise in benefits, have come from the world of drugs” and have come to “stay.” “Protecting that fraud erodes security,” he insists. “The world should know,” says Politi, that “the epicenter” of organized crime networks is in Europe, where a “porous” system has been created where China and Russia, corrupt governments, new technologies and the convergence of interests have been created. Becoming aware that an illegal cigar can also enrich invaders or terrorists is something “necessary.”
To make the report, analysts have contacted European bodies and security forces, as well as with legal departments of the partners, and it has been possible to know that there is “concern” for this trend that perhaps “has not socially penetrated despite its gravity”, in turn shows Christos Harpantidis, senior vice president of external affairs of Philip Morris International (PMI). “There is a low understanding of the problem, which not only exists, but is growing,” he laments, despite the fact that the groups are being perfected, controlling the product sometimes from the origin (there are already mafias that manufacture themselves this tobacco), entering local markets and improving their distribution channels and their advertising (they are skilled in the deep web).
And then quote Harpantidis the third flank: health. The World Health Organization (WHO), but today is legal in the EU. Instead, cigarettes that arrive in non -legal channels lack control and multiply the risks. The analyzes say that they are composed of chemicals, animal, plastic droppings … and that entails the increase in related diseases and premature deaths, adds the same WHO. The impact is social, beyond the obvious, which is business. “With levels of almost 10% of total consumption, we can no longer talk about something marginal,” says David Bird, the author of the study.
“Its enormous socioeconomic impact harms tax collection, employment creation and legitimate companies, which are the engine of our European economies. The availability of cheap and unregulated cigarettes in the submerged economy also hinders efforts to reduce smoking and move towards a future without smoke,” summarizes harpantidis.
Tobacco boxes seized by the administration of the China tobacco monopoly, in November 2020.
In detail
KPMG states that the increase in the consumption of illicit cigarettes was promoted last year mainly by France and the Netherlands, countries in which the price and tax increases and the generic tobacco packaging have been added. The situation is “especially alarming” in the neighboring country, where 18.7 billion illicit cigarettes were consumed in 2024, of which about 7.8 billion were falsifications. In the case of Netherlands, the volume of illicit cigarettes increased dramatically by 1,100 million – more than double that the previous year – until reaching 17.9% of total consumption. If legally bought, these cigarettes would have generated additional tax revenues of 9.4 billion euros in France and almost 900 million in the Netherlands, the report details.
And how are things in Spain? Our country now reaches illicit trade of 2021, after consuming 1.4 million counterfeit cigarettes. This implies that the state coffers have stopped entering 263 million euros, 52 million more than in 2023, the consultants indicate. Just in our country, the Minister of Health, Mónica García, announced a reform to, in line with what these other nations have already done. He defends that this is the “less attractive” product and that contributes to “make the decision to quit smoking.”
Countries like Bulgaria, Greece, Italy and Portugal have made significant progress in the fight against the illicit cigarette market. Greece, for example, recorded a 6.2 percentage drop in the consumption of illicit cigarettes in 2024, to 17.5%, the largest decrease in a decade.
In the 38 European countries analyzed in the KPMG study (the 27 EU member states, together with Albania, Bosnia and Herzegovina, Kosovo, Moldova, Montenegro, Macedonia del Norte, Norway, Serbia, Switzerland, Ukraine and the United Kingdom), 52,200 million illicit cigarettes were consumed in 2024, which represents 10% of consumption total. Derived tax losses are estimated at 19.4 billion euros.
In the United Kingdom, the volumes of illicit cigarettes decreased by almost 800 million in 2024, although its quota on total consumption remained stable. Even so, it remains the third largest illicit market in Europe, with 5,900 million illicit cigarettes consumed last year. Instead, Ukraine recorded the greatest decrease in illicit consumption: contraband volumes and falsifications were reduced by 2.4 billion cigarettes, which represents a 29% drop (compared to the increase of 1,100 million or 14% recorded in 2023).
The study also includes an analysis of Ukraine, a country that is not within the EU but aspires to it, and that is in a special context for the Russian invasion, since February 2022. This country is also improving its data, even when it is complex to maintain the surveillance, police and legal networks, in full war. Iaroslava Savastieieva, Deputy Director of Operations of the European Business Association, has defended the need for things to be done by right so that money is not lost in fees that is “indispensable also to help on the battlefield.”
“The good news is that there is a solution”
After the presentation of these unfortunate data, Harpantidis wanted to launch a positive message. “The good news is that there is a solution.” Let us first go to the diagnosis: seen the consultant’s report, Philip Morris understands that “the problem is aggravated by uploaded and pronounced taxes that benefit criminal networks that supply unregulated products, without taxes and lower quality, including falsifications, at lower prices.”
To deal with this threat, it urges to adopt a regulation based on “scientific evidence, a balanced and predictable taxation through fiscal calendars, a continuous public-private collaboration and greater support for regional and national police bodies, since criminal organizations that are dedicated to the sale of illicit cigarettes have consolidated their presence in the countries of Western Europe
“Predictible fiscal regimes and solid support for the actions of the forces of order have proven to be an effective political recipe: now we know how to effectively counteract criminal organizations that participate in the manufacture, distribution and illicit sale of cigarettes,” says Massimo Andolina, president of the European European region.
“This is the way to follow if we really want to end the illicit trade in cigarettes in our continent, which damages European economies, undermines competitiveness and growth and opens the door to other criminal activities. Citizens cannot afford to lose public income so necessary in this critical moment for Europe, income that is vanitating instead of being used for key issues such as defense, internal security and social security.”
Analysts gathered today in Brussels coincide in the most thorny theme: the price. They assume that tobacco has to be more expensive every time, but they ask that it be done in a “proportional” way, because “if you go up, people look for it cheaper”, pugh ditch. With serious policies in this regard, a better and more coordinated police and legal action and more “public education”, a “gradual” improvement of the situation can be achieved. It is necessary to forge a framework of great “complexity” -positively, the most repeated word of the day -but everything adds.
“Legislators must understand that repeating the political errors that have fed the illicit cigarette market – such as excessive and distorting taxation, extreme control measures such as prohibitions, and an insufficient application of the law against illegal activities throughout the value chain – can conduct it, and in fact it will do so, to the same disaster that we see today in the cigarette sector in those countries that have adopted these policies. We have already begun to observe in countries that have banned the legal sale of smokeless products, “concludes Andolina.
