Europe’s booming illicit tobacco trade, with nearly half of all cigarettes sold in several countries now coming from illegal sources, is deeply intertwined with other crime and start to resemble the drug trade.
That is according to Vincent Byrne, a former Irish police officer now leading Japan Tobacco International’s (JTI) global anti-illicit trade operations. Yesterday, he spoke about the scale and sophistication of the black market in an exclusive interview with Brussels Signal at the World Nicotine Congress this week.
The problem is particularly acute in a growing number of countries across the European Union.
Recent figures for 2025 show that about 44 per cent of tobacco products consumed in, for example, Belgium are illegal, either counterfeit or smuggled.
France, the UK and Ireland face similarly alarming rates.
“Wherever taxes are highest, the illegal market thrives,” Byrne explained. “Consumers don’t just quit when prices rise — they turn to cheaper, illicit alternatives.”
The mechanics of the trade are as complex as they are brazen.
Byrne described a two-pronged system: Counterfeit cigarettes, often produced in clandestine factories within Europe itself and smuggled genuine products, typically sourced from low-tax regions such as the UAE, eastern Europe or Asia.
Belgium, he revealed, has become a key player in both.
This role as a transit and production hub is no accident. Its central location, porous borders and well-established logistics networks make it an ideal base for smugglers, Byrne said.
“We’ve seen a surge in illegal factories here, some of the highest numbers in Europe,” he said, noting that Poland and Belgium are now the continent’s top hotspots for counterfeit production.
These operations are not the work of small-time criminals but of organised crime syndicates, often linked to drug trafficking, human smuggling and even arms deals.
“They protect their turf like drug gangs,” Byrne warned, pointing to recent raids in Greece where firearms and machine guns were seized alongside counterfeit cigarettes.
Illicit factories serve as a study in industrial-scale criminality.
Hidden in remote warehouses on the outskirts of cities such as Brussels, they operate with sophistication.
“Some are shockingly well-run,” Byrne said, although others resemble “third-world conditions”, with tobacco mixed with dirt and debris.
The workforce is often drawn from eastern Europe, for example from unemployed former tobacco workers lured by cash payments and the promise of easy money.
Once the cigarettes are produced, they are smuggled across borders, concealed in trucks, mislabelled cargo, or even suitcases carried by “ant smugglers” (a large mass of people smuggling limited amounts) on commercial flights.
The final leg of the journey is handled by local distribution networks, often tied to street gangs in cities such as Brussels, that sell the products in shops, on street corners or through online forums.
This illicit trade has huge ramifications for governments.
The EU loses an estimated €43.7 billion annually in unpaid excise duties, a figure Byrne described as “just the tip of the iceberg”.
For governments, the cost is not only fiscal but social.
High taxes, intended to deter smoking, have instead fuelled a parallel economy where crime flourishes and public health is further endangered.
Counterfeit cigarettes, Byrne warned, are often “unregulated and potentially far more harmful” than legal products, with unknown additives and no quality control.
Yet for consumers, the appeal is simple: “When a pack of legal cigarettes costs €12 or more, people will take the risk,” Byrne said.
The size of this dark economy is also reflected by the size of its illegal factories.
Some of these facilities may have one production line dedicated to producing a particular brand, while another production line nearby produces something else.
Byrne recalled a recent operation in Greece where more than 50 people were arrested in connection with illegal factories.
According to a public report, a large organised crime group was behind the entire operation.
Beyond simply manufacturing cigarettes, there is also a strong security element involved.
These groups protect their territory in much the same way drugs gangs do.
In the Greek case, authorities found a significant quantity of firearms, including machine guns.
Byrne noted that there were several illegal cigarette factory seizures in Europe in recent times, with many arrests.
The response from law enforcement, he argued, has been uneven.
While customs agencies play a crucial role in intercepting smuggled goods at borders, police efforts are often fragmented.
“Multi-agency task forces are the way forward,” Byrne urged, drawing on his own experience in financial crime investigation.
“Police, customs, and tax authorities need to work together — just as the criminals do,” he said.
Yet even when raids succeed, the masterminds often evade justice. “The workers get caught, the low-level distributors get caught, but the kingpins? They’re still out there,” Byrne said.
For him, the solution lies in a dual approach: Stronger enforcement and smarter policy.
“We need to help law enforcement with intelligence, training, and expertise,” he said, noting that JTI regularly assists authorities in identifying counterfeit products and tracking criminal networks.
But he also called for a rethink of tax policies that inadvertently fuel the black market.
“If you push legal prices too high, you push consumers into the arms of criminals,” he warned.
The example of Australia, where sky-high tobacco taxes have led to violent turf wars between smuggling gangs, offers a cautionary tale.
“We’re seeing the same pattern in France, where the price of a pack has nearly doubled in a decade — and so has the illegal trade,” Byrne stated.
Lithuanian authorities announced the arrest of 21 individuals suspected of belonging to an organised criminal network involved in smuggling cigarettes from Belarus using specially equipped weather balloons. https://t.co/6QyRZQg4RR
— Brussels Signal (@brusselssignal) December 17, 2025
