The shadow cigarette market is rapidly growing: the budget is losing billions

According to hvylya.net: The illegal trade of cigarettes in Ukraine is increasing, leading to higher losses for the state budget and a significant amount of counterfeit products on the market. According to the project 'Monitoring Illegal Trade in Tobacco Products in Ukraine', in April 2025, the overall level of illegal tobacco trade in the country rose to 16.2%, compared to 14.1% at the beginning of the year.

This has resulted in losses for the state budget of 25.2 billion UAH per year due to tax evasion. The volume of the illegal cigarette market in Ukraine exceeds 5 billion pieces.

'In April, we are once again observing an increase in the volume of the illegal tobacco products market in Ukraine and a significant rise in the share of counterfeit products - up to 8.8%. Among illegal products, counterfeit excise stamps play a significant role, particularly Marshall Finest Tobacco / VK Tobacco FZE and 'Ukrainian Tobacco Manufacturing', - says Tatyana Sverdlik, an analyst at Kantar Ukraine.

The demand for illegal products marked Duty Free or intended for export, which was actually sold in Ukraine, continues to grow. The largest share of such cigarettes is produced by the Vynnyky Tobacco Factory. The main volumes of illegal cigarettes are observed in six regions of Ukraine, which collectively account for 71% of the counterfeit products market.

The most active trade in illegal cigarettes is conducted through kiosks and stores, which in April 2025 accounted for 67% of the sales volume of counterfeit cigarettes.

Ukraine is facing a rise in illegal cigarette trade, leading to significant losses for the state budget and an increase in counterfeit products on the market. The largest number of illegal cigarettes is produced with Duty Free labeling or for export, but actually sold in Ukraine, which is a serious problem that needs to be addressed.