KPMG report shows increase in illegal cigarette consumption in Cyprus and EU

The annual KPMG report, commissioned by Philip Morris International, reveals that illegal cigarette consumption in the European Union exceeded 10 percent for the first time since 2014. In 2025, the EU saw 41.8 billion illicit cigarettes consumed, leading to estimated tax losses of 16.7 billion euros. France recorded the highest rate of illegal consumption at 41.4 percent, followed by Belgium at 24.8 percent and the Netherlands at 22 percent. Cyprus also experienced a rise in illicit trade, with consumption reaching 16.3 percent, a two-percentage-point increase from 2024. The total volume of illegal cigarettes in Cyprus reached 160 million units in 2025. This rise in illicit trade resulted in a loss of 27 million euros for the Cypriot treasury, compared to 22 million euros in the previous year. Additionally, the report assessed the market for illegal heated tobacco products, noting that they currently account for a limited 1.2 percent of total consumption.