The illegal tobacco market in Ukraine has grown to a scale that directly affects the state budget and defense funding. According to the most conservative estimates, in 2025 the volume of illegal circulation exceeded 6 billion cigarettes, which corresponds to approximately 30 billion hryvnias of shadow turnover.
Given that the share of excise duties and taxes in the cost of cigarettes is actually close to 100%, the state has lost at least a similar amount of revenue. This is money that could have been spent on defense, healthcare, or social spending without increasing the tax burden on businesses and the population.
The situation with smuggling to the European Union is particularly telling. According to official data from European customs services, the value of seized batches of Ukrainian cigarettes alone is estimated at approximately 100 million euros. At the same time, market experts believe that the real volume could be at least ten times greater - that is, about a billion euros of shadow funds.
Despite regular statements about the fight against illegal tobacco, the sale of counterfeit products is actually taking place openly. Cigarettes without excise stamps are sold through websites, telegram channels and delivered by postal services directly to buyers. Payment is made to bank cards or via cash on delivery, and the senders are often dozens and hundreds of individual entrepreneurs who act as so-called droppers.
One example of such a model is the activities of TZOV "Tobacco Shop", associated with the online resource Tobacco Smoke Shop and relevant Telegram channels, where products without excise stamps are openly offered under the guise of Duty Free goods. According to market sources, other online platforms, in particular "Sigiopt" and Tobacos, operate on a similar principle.
The scheme has the characteristics of a centralized network: identical packaging, repetitive assortment and logistics routes. The key transit hub is the Odessa region, from where the products are distributed to the regions of the country. In commodity declarations, cigarettes are often disguised as clothing, souvenirs or consumer goods.
Experts note that the functioning of a market of such scale is impossible without systemic failures of state control. Tax authorities have not recorded non-payment of excise taxes for years, regulatory services have not responded to the lack of labeling, and relevant departments have limited themselves to public statements about the fight against smoking instead of eliminating sales channels.
Against this background, more and more questions arise: why is the tax burden on small businesses being increased, while the multi-billion shadow cigarette market continues to operate almost openly? In conditions of war, the issue of losing tens of billions of hryvnias in budget revenues is actually turning from an economic problem into a national security issue.
