There has been an estimated EUR 16.7 billion in lost tax revenues for 2025 as illicit cigarette consumption in the European Union reached 10.3% of the total consumption in the region, according to a latest study conducted by KPMG LLP on behalf of Philip Morris Products SA, a subsidiary of Philip Morris International (PM).
The research noted that across the 38 European countries, illicit consumption touched 55.3 billion cigarettes, representing an estimated EUR 22.4 billion in state budget revenue losses, according to the 20th edition of the study entitled, "Illicit cigarette and heated tobacco consumption, and oral nicotine share in Europe."
Counterfeits, the major source of illicit cigarettes rose to 18.3 billion, which accounts for 44% of the total illicit consumption in 2025. This means counterfeit volumes increased over 20% year-on-year.
This illicit trade has negatively impacted the tobacco, nicotine, and related trade as the Europe's tobacco and nicotine EUR 224 billion value chain supports over 2.1 million jobs.
France has witnessed the steep rise in illicit cigarette usage across Europe in 2025. The country is Europe's biggest illicit market, at a 41.4% illicit share, or 20.5 billion cigarettes. Counterfeits alone accounted for almost 9.7 billion cigarettes, around 19% of the total consumption.
Massimo Andolina, President, Europe Region, Philip Morris International, said: "The lesson we derive from the situation in Europe is that not one single lever solves the problem of illicit trade; it is that a well-coordinated set of measures does."
Andolina also highlighted the fact that the countries that promote excessive tax hikes, or, even worse, product bans, such as France and the Netherlands, report illicit trends worsening, a reduction in public tax collection, increased consumers' access to uncontrolled products, and an increased number of criminal activities related to these products.
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