The trade in illegal and untaxed cigarettes is booming in Austria, as in most of Europe. In 2024, Europeans consumed 52.2 billion cigarettes that arrived on their markets illegally or without tax—about 10 percent of total consumption. In Austria, four out of every 100 cigarettes were illicit or untaxed. Smuggling some 520 million cigarettes cost Austria roughly €115 million in lost revenue, according to a KPMG report.
With 38.9 billion counterfeit or untaxed cigarettes, the EU saw its highest figure since 2015—15.3 billion of them outright fakes. Overall, 9.2 percent of EU-consumed cigarettes evaded the taxman, a rate on par with non-EU European states.
Non-EU countries such as Albania, Belarus, North Macedonia, and Turkey are the main suppliers of this “hot” merchandise. Organized crime has further professionalized its operations, exploiting online markets, using drones for transport, and running illegal factories with forced labor inside the EU. Factory raids seize over 400 million fake cigarettes annually, a Philip Morris-commissioned report shows—over a quarter of that total (114 million) in a single multi-stage bust in Latvia last year. “Smuggling has long been a billion-euro business for organized gangs,” noted Özlem Dikmen, Philip Morris Austria’s managing director.
Last year, counterfeit packs bore labels from more than 52 different markets. Marlboro, Winston, Lambert Butler, and Richmond were the most imitated brands. Packs marked “Duty Free” alone accounted for 3.2 billion illicit cigarettes—60 percent of all fakes.
Those 2.61 billion untaxed or illegal packs cost European treasuries €19.4 billion. “Today, high-tax, high-price markets like France and the Netherlands bear the brunt of illegal imports and fakes,” said Christos Harpantidis, Senior Vice President at PMI. France’s black-market share reached 38 percent—more than 6 billion cigarettes, exceeding Austria’s entire market.
In Ireland, 32 percent of cigarettes consumed were illicit or untaxed; in the UK, 26 percent. Belgian tax hikes backfired, costing €24 million in lost duties as smokers turned to smuggled or fake packs. In the Netherlands, illegal trade doubled to 18 percent of the market after higher taxes, cutting excise revenues by €129 million. Yet EU Commissioner Wopke Hoekstra—who had backed Dutch tax rises—is now pushing for EU-wide tobacco-tax reform, Euractiv reports.
The report also shows that evidence-based regulation and fiscal measures can shrink the black market: illicit share fell by 5.72 percentage points in Ukraine and 6.21 points in Greece.
FPÖ MEP Roman Haider criticized the findings Wednesday: “The data prove that excessive taxes mean more smuggling, more organized crime, and more illegal networks. We need national control over our tax policy—not Brussels meddling.”
