The black market has soared by nearly 20%, while almost half (45%) of the cigarettes consumed in the UK are illicit, independent analysis by KPMG – commissioned by Philip Morris International – has revealed.
Of the total cigarette consumption in the UK, 13% of cigarettes are purchased abroad legally, whereas 32.3% are counterfeit or contraband, found the report.
The findings show that illicit consumption rose by 1.5 billion cigarettes in 2025 (vs. 2024), making it the second-largest illegal market in Europe, behind France, for illicit cigarette consumption by volume.
Two new trends have been identified by Philip Morris Limited as significant contributing factors to the boom in the UK’s illicit market over the past year: the rise of ‘front’ shops – retail outlets set up by organised criminal gangs (OCG), and the rise in factories manufacturing illegal cigarettes within the UK.
Smuggled and fake brands are typically imported from Turkey, Poland and Belarus, plus free trade zones in the Middle East, as identified by Philip Morris International.
However, last year, the report noted how factories were moving ever westward on the continent, towards their key markets of France and the UK. In the past 12 months this has moved a step further, with a number of high-profile raids of large factories within the UK itself. Each year, these factories were producing hundreds of millions of cigarettes between them, designed to flood the UK market.
The Europe-wide report estimates that more than 10 billion illicit cigarettes were consumed in the UK in 2025, equating to more than £4.46bn in lost tax revenue for vital public services. Philip Morris International claimed that this amount of money could fund over 95,000 new police officers.
“On the streets of the UK, there has been an explosion in the number of ‘front’ shops selling illicit cigarettes and vapes posing as low-grade grocers, vape shops, candy shops, barbers or mobile phone retailers,” claimed the firm. “Reports show gangs running the stores are terrorising communities and also profiting from street drugs, human trafficking, cybercrime, fraud and money laundering. They have waged a war of intimidation against legitimate UK shopkeepers, threatening their livelihoods and, in some cases, even their personal safety.”
Philip Morris Limited, the UK affiliate of Philip Morris International, is calling on the government to take urgent action to tackle illicit tobacco and nicotine products, warning that the illegal market for cigarettes is growing exponentially, even as overall cigarette consumption continues to decline.
Peter Nixon, Managing Director at Philip Morris Limited, said:
“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. The past few years have been a boon time for organised crime gangs who are selling illicit cigarettes and vapes with impunity, ruining our high streets and communities.”
Catherine Goger, Illicit Trade Prevention Manager at Philip Morris Limited, said:
“In our fight against these ‘front’ shops, we have expanded our undercover teams who gather evidence and intelligence in communities across the UK. To drive illicit products off our high streets, the government needs to introduce a robust licencing scheme as soon as possible.”
