Illicit cigarettes represented more than one tenth of total consumption in the
A smuggler does not stop at a border just because rules change. Criminal networks move goods and money across national boundaries while authorities trying to dismantle them often remain confined within their own territories. For Gijs de Best, this mismatch is the core problem. He oversees a region with rapidly growing markets. Before taking this role in January 2026, he led PMI’s operations in the Philippines. The Cost of Illicit Trade Lost government revenue is one of the most immediate consequences. „Illicit trade severely affects state revenues,” says de Best. „If you recover that revenue, every extra dollar can be reinvested in health, education and infrastructure.” Recent data illustrate the scale of the problem in Europe. A KPMG study, commissioned by PMI and published in June 2026, estimated that 55.3 billion illicit cigarettes were consumed in 38 European countries in 2025. Revenue loss was estimated at approximately 22.4 billion euros.
Breaking news
Montenegro, Albania Seek NATO Help to Counter Russian Disinformation
Ronna McDaniel Weighs In on GOP's Path Forward
Market Sentiment Shifts as S&P 500 Snaps Three-Day Losing Streak
Voters Demand Stronger Congressional Oversight of Presidential PowerIllicit cigarettes represented more than one tenth of total consumption in the EU, the first time since 2014. The impact goes beyond mere taxes. Illicit markets put pressure on legitimate businesses and, de Best argues, create risks for consumers. „Illicit trade undermines legitimate businesses and weakens political institutions,” he says. There is also a product safety issue. Illicit products „have no quality standards. They do not follow safety protocols, they do not follow product standards,” he says. „Therefore, they impose a risk on consumers who use these products.” A Problem Far Beyond Europe Illicit trade is sometimes portrayed as a problem confined to wealthy Western economies. De Best sees a different picture. „The idea that illicit trade is exclusively a Western world problem is often a mistake,” he says. „Emerging markets face exactly the same problem, if not worse, and they need funding.” Southeast Asia offers a clear example.
PMI estimates that ASEAN governments lose approximately 4 billion dollars a
PMI estimates that ASEAN governments lose approximately 4 billion dollars a year in tobacco taxes, plus another 2 billion dollars lost due to illicit vaping products. The company has called for a greater exchange of customs data between ASEAN member states, including in real time, and warned that disruptions to legitimate supply chains can create opportunities for illegal operators. The issue is particularly relevant this year, with the Philippines holding the ASEAN presidency. For de Best, this makes the inclusion of emerging markets in international debates all the more important. „It is so important that they make their voice heard,” he says. Regulation Is Only as Strong as Its Enforcement Better regulation can help, but rules on paper are only part of the solution. „Good regulation without enforcement only affects legitimate businesses, because they follow the rules,” says de Best. Criminal operators, by definition, do not.
This means policymakers must consider enforcement when designing regulation. Who will enforce the rules? What resources are needed? Can measures be implemented in practice? And will they ultimately make consumers safer? These questions matter because poorly designed measures can increase the compliance burden on legitimate businesses without changing the behaviour of criminal operators. Integrating Illicit Trade into Policy Design For de Best, the answer is to factor illicit trade into the policy process much earlier. „Combating illicit trade should be an integral part of policy design,” he says. This approach brings benefits beyond recovering lost revenue.