A new report reveals that nearly half of all cigarettes consumed in the United Kingdom are now sourced from the illicit market, fueling organized crime and leading to significant tax revenue losses.
| PULSE POINTS |
❓ WHAT HAPPENED: A KPMG report commissioned by Philip Morris International reveals that 45 percent of cigarettes consumed in the United Kingdom in 2025 were non-duty-paid, with 32.3 percent being counterfeit or contraband. 🎯 IMPACT: The illicit cigarette market cost Britain’s Treasury an estimated £4.46 billion (~$6bn) in lost tax revenue. The country has the highest taxes on tobacco products in Europe, and the second-largest illicit market, behind only France—where such taxes have risen rapidly in recent years. “[C]ountries that promote excessive tax increases, or, even worse, product bans, such as France and the Netherlands, see illicit trends worsening, public tax collection suffers, consumers gain access to uncontrolled products, and crime thrives,” observed Massimo Andolina, Philip Morris International’s president for the Europe Region. 📰 DETAIL: The report highlights the use of “front” shops, including vape stores, and the rise of illicit cigarette manufacturing within the United Kingdom as key drivers of the illegal market. Organized crime gangs are exploiting such businesses, which are often poorly regulated, to sell the illicit products. The National Pulse has previously reported on how they have also become hubs for drug dealing and grooming, both in the United Kingdom and the United States. 💬 KEY QUOTE: “This should be a major wake-up call for the government; poorly resourced enforcement is depriving the UK of almost £4.5 billion a year,” said Peter Nixon, managing director of Philip Morris Limited. |
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