New technologies are changing the black market for tobacco in Europe

A recent report by the auditing and consulting firm KPMG shows that the illegal tobacco trade in Europe is increasingly being supported by digital means and modern transport technologies. Smugglers are increasingly turning to platforms such as Facebook and Telegram – and relying on drones for delivery instead of traditional smuggling routes.

Digitalisation and new tactics

Border controls and surveillance measures are making life more difficult for those involved in the black market – but they are adapting quickly. Drones fly small quantities across national borders, often where there is little surveillance. The advantage: low risk, no middlemen, hardly any traces.

There have also been some changes on the distribution side. Sales are increasingly taking place in closed online groups. Buyers and sellers communicate using encrypted channels, and traditional channels such as street markets are becoming less important.

Economic damage and political debate

According to the KPMG study commissioned by Philip Morris International, around 40 billion illegal cigarettes were consumed in 38 European countries in 2024 – an increase of over ten percent compared to the previous year. The study is based, among other things, on packaging analyses and data from law enforcement agencies.

One possible reason for the increase is high tobacco taxes. Countries such as France and the Netherlands have significantly raised the prices of legal cigarettes in recent years. According to KPMG, this is driving many consumers to the black market. Health organisations disagree with this view and emphasise that higher taxes are an effective means of curbing tobacco consumption.

Changes in logistics

In addition to new distribution channels, logistics are also changing. Smugglers deliberately store smaller quantities so as not to suffer large losses during searches. In addition, railways and low-cost airlines are increasingly being used for transport – more discreet and flexible than conventional methods involving trucks or shipping containers.

A challenge for policymakers

Illegal tobacco trade presents governments with a dual challenge: on the one hand, they must combat revenue losses and organised crime; on the other hand, they must maintain their health policy goal of reducing tobacco consumption overall. Criminals are flexible – and so must be the response of the authorities.