Main points
- The tobacco market in Europe decreased by 3.5% over the year, in particular, in Poland the decline was 15.4%, and in France – 9.4%.
- In Ukraine, the legal cigarette market is shrinking by 10-15% annually due to the growth of the illegal market and increased excise taxes.
Cigarette sales are collapsing in Ukraine and Europe / censor.net
The tobacco market is shrinking not only in Ukraine but also in Europe. In some countries, sales have fallen by more than 15%, but HTU has allowed profits to be maintained.
What is known about the collapse of the cigarette market in Europe?
The decline in the tobacco market in Europe accelerated in the fourth quarter of 2025, Interfax-Ukraine writes.
Overall, the market lost 3.5% over the year, Philip Morris International reported:
- a significant drop in sales in the fourth quarter of last year was recorded in Poland – by 15.4%;
- less significant in France – by 9.4%;
- they were partially offset by an increase in sales in Bulgaria – by 8.3%;
- Germany – by 1.7%;
- Serbia – by 6.4%.
It is known that the decline was caused by a 5% reduction in cigarette sales , while sales of heated tobacco (HTU) systems continued to grow.
Overall, over the past year, Philip Morris managed to increase global sales by 1.4%, also due to an increase in sales of smokeless products by 12.8%, including HTU – by 11.0%, while cigarette sales decreased by 1.5%.
What is the situation with the cigarette market in Ukraine?
The legal cigarette market in Ukraine has been shrinking by 10-15% annually for the past two years.
What has been happening in the last two years? Because the illegal market is growing, the rate of decline in the legal market is simply incredible: it has never happened in Ukraine that the legal cigarette market has shrunk by 10-15% per year,
– says Maxim Barabash, CEO of Philip Morris Ukraine.
According to him, consumers are choosing the illegal market because the difference in price between legal and illegal products has increased significantly due to the increase in excise taxes.
What is known about illegal cigarette production?
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Only in October 2025, the share of illegal tobacco products reached 17.8%. This causes enormous financial losses for Ukraine. In total, the state could earn 26.5 billion hryvnias in taxes. The volume of the shadow market is estimated at 5.5 billion cigarettes.
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Despite the decline in the illegal trade in tobacco products, counterfeit cigarette production is not decreasing. Entire tobacco factories are still hidden in industrial zones, warehouses, and abandoned buildings.
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The main share of illegal trade falls on a number of regions. The top three are Dnipropetrovsk, Odesa, and Lviv. Experts note an increase in counterfeit products, in particular with fake excise taxes.