Cyprus has recorded one of the highest rates of illegal cigarette consumption in Europe, according to data presented on Wednesday at a conference in Brussels examining the growing challenge of illicit trade across the continent.
The findings were unveiled during an event titled “Illicit Trade in Europe: New Security Dynamics, Emerging Risks and the Importance of Policy”, jointly organised by the Royal United Services Institute (RUSI) and the Transnational Alliance to Combat Illicit Trade (TRACIT). The conference coincided with the presentation of KPMG’s 2025 report on the illegal consumption of tobacco and nicotine products in Europe.
According to the report, illegal cigarettes accounted for more than 20 per cent of total cigarette consumption in seven European countries. France recorded the highest share at 41 per cent, followed by Ireland at 35 per cent, the United Kingdom at 32 per cent, Belgium at 25 per cent, Cyprus at 24 per cent, the Netherlands at 22 per cent and Lithuania at 21 per cent.
Impact on tax revenue
Particular attention was drawn to Cyprus, which, alongside Belgium, Estonia and the United Kingdom, recorded some of the largest increases in the share of illicit and counterfeit cigarettes in 2025 compared with the previous year.
In Cyprus, the increase reached 10.2 percentage points, compared with 9.5 points in Belgium, 7.4 points in Estonia and 6.7 points in the United Kingdom.
Presenters noted that overall cigarette consumption across Europe declined by 4 per cent, a trend attributed primarily to falling legal sales. At the same time, illegal cigarette consumption rose by 7 per cent, driven largely by a sharp increase in counterfeit products.
The report found that volumes of counterfeit cigarettes sold within the European Union increased by 20 per cent in 2025.
According to the study, around 42 billion illicit cigarettes were consumed across EU markets during the year, representing approximately 10 per cent of total cigarette consumption. The growth in counterfeit products is estimated to have resulted in tax revenue losses of around €17 billion for EU member states.
Fragmented supply chains
Researchers said the illicit tobacco market is becoming increasingly decentralised and adaptable, with supply chains growing more fragmented and cross-border transport networks adjusting rapidly to changing market conditions.
They also noted that the production and distribution of illegal cigarettes are evolving both geographically and operationally, with certain countries increasingly serving as transit hubs for products destined for other markets.
The report’s conclusions were informed by research involving customs officials, police services, tax authorities and other law enforcement agencies. Respondents highlighted the need for greater information-sharing, improved coordination and closer cross-border cooperation to tackle the problem effectively.
Online platforms
During the discussion, TRACIT Deputy Director-General and former Interpol legal adviser Stefano Betti addressed the changing nature of financial crime linked to illicit trade, including the growing use of trade-based money laundering schemes.
Participants also warned that an increasing proportion of illegal tobacco sales are shifting away from traditional retail channels and onto online platforms, social media networks and messaging applications, creating new challenges for customs and law enforcement authorities across Europe.
The findings underscore the scale of the illicit tobacco market and the growing complexity of efforts to combat it, as authorities face increasingly sophisticated criminal networks operating across national borders.
