Illicit Tobacco in the EU: Key Facts and Policy Recommendations for MEPs

Brno, 7 November, 2025 - Key Facts and Policy Recommendations for MEPs

Why It Matters

• The illicit tobacco trade undermines taxation policies, damages public budgets, and increases access to cheap and potentially dangerous cigarettes and nicotine products for vulnerable populations.
• In 2023, operations involving OLAF seized 616 million illegal cigarettes and hundreds of tons of tobacco and shisha, preventing over €150 million in tax losses.
• The structure of the illicit market is diverse – it includes smuggled genuine products, counterfeits, illegal EU-based production, “illicit whites”, and increasingly illegal e-cigarettes and refills.
• Distribution channels are becoming increasingly digital and fragmented, with smaller shipments, social media sales, and drone deliveries making traditional enforcement less effective.

The EU Track & Trace System Exists – But Independence Is the Issue

• The EU implemented its Track & Trace (T&T) system in 2019 under Commission Implementing Regulation (EU) 2018/574. The system is operational and being expanded.
• The problem is not absence, but integrity. Academic and investigative reports document repeated attempts by tobacco companies to influence the design and operation of the EU T&T system – contrary to the WHO Illicit Trade Protocol, which requires systems to be fully under government control and independent from industry.
• Independent oversight and regular audits are therefore essential to ensure compliance with the Protocol and to maintain the credibility of EU enforcement.

Illicit Whites Are Only One Part of the Problem

• “Illicit whites” (also called cheap whites) are brands legally manufactured in one country but produced for smuggling into another. They form a significant share of the EU’s illicit cigarette supply, but are not the only source.
• Policy responses must also target counterfeits, diversion of genuine products, illegal EU-based manufacturing, and illegal e-cigarette markets

Recommendations for MEPs

• Reinforce the independence of the existing T&T system. Exclude companies with links to the tobacco industry from key T&T roles, strengthen governmental oversight, and mandate regular external audits of compliance with the WHO Protocol.
• Expand data coverage and interoperability. Integrate all tobacco and relevant nicotine products into T&T, and link the system with customs and law-enforcement databases in real time.
• Target the full spectrum of illicit supply. In addition to illicit whites, increase enforcement against counterfeits, diversion, illegal factories within the EU, and illegal e-cigarettes. Prioritise Free Trade Zones, logistics hubs, and small-parcel delivery channels.
• Boost joint operations and financial tracing. Provide OLAF and Europol with greater capacity for coordinated actions and tracing of financial flows that connect tobacco smuggling with organised crime. Publish aggregated seizure and disruption data regularly.
• Reduce information asymmetry. Rely on independent, verifiable data sources. Avoid using tobacco-industry-funded market estimates without transparent validation. The European Parliament has already noted the risks of relying on industry-sponsored studies.
• Strengthen accountability for manufacturers and distributors. Impose or tighten sanctions and compliance obligations for entities proven to facilitate diversion or smuggling, including licence withdrawal where appropriate.

Reducing risks associated with tobacco smoking

Tobacco smoking is one of the world's gravest public health problems. Every year, it causes approximately 8 million deaths worldwide and contributes to 200 million years of life lost (DALYs). In the Czech Republic, smoking accounts for 15–20% of deaths and up to 10% of healthcare expenditure. Smokers die on average 10 years earlier than non-smokers, and for every death, there are up to 30 people with serious illnesses caused by tobacco smoke. The main source of harm is not nicotine or addiction itself, but the toxic and carcinogenic substances produced when tobacco is burned.

Although the WHO MPOWER measures (taxation, advertising bans, smoking cessation assistance, etc.) have proven effective, the rate of decline in smoking is slowing in developed countries. Many smokers are unwilling or unable to quit, especially in socioeconomically vulnerable groups. It may be important to offer less harmful alternatives to these groups.

Harm reduction in the context of tobacco

The harm reduction strategy aims to reduce the health risks associated with nicotine use rather than seeking to eliminate it entirely.

Products containing nicotine vary in their level of risk:

According to current evidence, electronic cigarettes and nicotine pouches are the least harmful – exposure to harmful substances is reduced by more than 90%, and their use can help some smokers switch away from combustible tobacco. Heated tobacco is less harmful than traditional cigarettes because it does not involve combustion, but the content of harmful substances remains higher than in pure nicotine products. Even so, it can be a step towards lower risk for some smokers. Burned tobacco remains by far the most harmful form of nicotine use.

Incorporating the principle of harm reduction into tobacco policy could significantly accelerate the reduction of the health impacts of smoking. However, accurate and balanced communication about relative risks and strict controls on sales to minors are important.

Recommendations for EU policy

• The primary goal of regulation must be to reduce the harm caused by smoking combustible tobacco, not all nicotine product use
• Accept and integrate the concept of harm reduction into European tobacco policy
• Provide accurate information on the relative risks of individual products
• Recommend less harmful alternatives to those who do not want to or cannot quit smoking
• Maintain strict oversight of marketing and prohibit sales to minors