Europe's cigarette black market grows as legal sales decline

Europe's declining cigarette consumption masks a growing problem: the black market for tobacco is expanding. A recent analysis by the consulting firm KPMG reveals that while overall cigarette use dropped by 4.1% in 2025 across 38 European countries, the consumption of smuggled and counterfeit cigarettes surged by nearly 6%.

This illicit trade means more than one in ten cigarettes smoked in Europe are now from the black market. KPMG estimates that European governments lost around 22.4 billion euros in tax revenue due to this illegal activity. The problem is particularly acute in countries with high tobacco taxes, with France standing out as a prime example.

In France, over 40% of consumed cigarettes are illicit, largely driven by the country's high prices. A pack of cigarettes that cost around 7 euros in 2018 now averages about 13 euros, significantly higher than in countries like Austria. The French government is combating this through price increases and, more recently, a ban on smoking in many outdoor public spaces, aiming to become a smoke-free nation. However, the report notes that "smoke-free" definitions often exclude alternative nicotine products.

High-price countries like Ireland, the UK, Belgium, Cyprus, and the Netherlands also show above-average rates of illegal cigarette consumption. In Austria, an estimated 30 million packs of irregular cigarettes were consumed last year, accounting for nearly 5% of the market and costing the state around 128 million euros in taxes, an increase from the previous year.