Ukraine loses 33.3 billion hryvnia a year due to the black market in cigarettes
In April 2026, the share of illicit tobacco products in Ukraine rose to 19.8% of the total market volume. This means that almost one in five packets of cigarettes sold is illicit.
These figures are provided by the ‘Monitoring of the Illegal Trade in Tobacco Products in Ukraine’ project, conducted by Kantar Ukraine on behalf of leading tobacco manufacturers.
The main factor behind this increase was the rise in the volume of counterfeit products, particularly cigarettes with forged excise stamps.
At the same time, the proportion of products labelled ‘Duty Free’ or intended for export that are sold illegally in Ukraine has remained stable since the start of the year. However, this figure exceeds the levels recorded in 2025.
Given the current scale of the illegal market, annual losses to the state budget due to unpaid taxes are estimated at a record 33.3 billion UAH.
Within the structure of counterfeit products, 38 per cent consists of cigarettes from local manufacturers bearing counterfeit excise stamps. The main producer of such products, according to the labelling on the packaging, remains Marshall Finest Tobacco (United Tobacco) / VK Tobacco FZE.
In the segment of cigarettes labelled ‘Duty Free’ or intended for export but sold illegally in Ukraine, 55 per cent of the products are manufactured by the Vynnykivska Tobacco Factory, with a further 44 per cent accounted for by Marshall Finest Tobacco.
The most common brands in this category remain Compliment, Marshall, Manchester, Urta, Lifa and Brut.
The geographical distribution of the illicit trade has not changed significantly. The highest concentration of illicit products is recorded in seven regions, which account for 68 per cent of the market.
The Dnipropetrovsk region accounts for the largest share — 18 per cent. This is followed by the Odesa region — 11 per cent, the Kharkiv region — 10 per cent, the Kirovohrad region — 8 per cent, the Lviv region — 8 per cent, the Khmelnytskyi region — 7 per cent, and Kyiv and the Kyiv region — 6 per cent.
Despite a slight decline in sales through kiosks, it is precisely kiosks and shops that remain the main sales channels for illicit tobacco products. Around two-thirds of this market is sold through them.
As previously reported by ThePublic, the Parliamentary Committee on Finance, Tax, and Customs Policy criticized the performance of the Economic Security Bureau and stated that the situation regarding the formalization of certain sectors of the economy had worsened. Among the problem areas, lawmakers cited the tobacco industry, analytical activities, and the results of investigations.
