In a move that is both welcome and long overdue, the US Food and Drug Administration (FDA) and US Customs and Border Protection (CBP) recently announced the seizure of nearly $34 million worth of unauthorized e-cigarettes during a coordinated operation at the Los Angeles/Long Beach seaport. The scale and scope of this joint action – nearly 1.4 million units of illegal products – signals a critical shift: enforcement against the illicit vapor market is no longer just theoretical.

KPMG has released its latest annual study on illicit cigarettes in Europe, commissioned by Philip Morris Products SA, and covering 38 European markets (including 27 EU member states). The study shows that while overall illicit consumption in Europe grew marginally in 2024 (by 0.2%), consumption in the EU27 soared by 10.8% to reach 9.2% of the total market – the highest level in nearly a decade.

The Transnational Alliance to Combat Illicit Trade (TRACIT) is a non- governmental organisation consisting of corporations and select trade associations within a range of sectors, including tobacco, alcohol, agri-foods, petroleum, and pharmaceuticals. It has released a report titled ‘South Africa’s Fight Against Illicit Trade – A Strategic Review’. The report reveals that while the country has improved its cross-border enforcement and customs capacity, as well as controls over the informal economy, it has performed significantly less well in other areas with regard to anti-illicit trade efforts.

In March, the tobacco industry launched an extensive media campaign, making exaggerated claims about the illegal cigarette trade in Pakistan and advocating for tax reductions. This campaign has been widely publicised, attempting to paint a picture of rampant illicit trade in the cigarette market, allegedly causing significant revenue losses to the government. However, the data and methodologies used to support these claims appear to be misleading, creating an inflated perception of the extent of the problem.

India is currently facing regulatory uncertainty around authentication and traceability regulations. While on one hand it recently amended its Central Goods & Services Tax (CGST) Act to allow for the introduction of tobacco traceability, on the other hand it has rolled back key measures for pharmaceuticals – possibly due to the increasingly widespread copying of genuine QR codes for track and trace onto counterfeit drugs.

The alcohol industry has warned that an increase in South Africa’s excise taxes will drive even more financially pressured consumers towards the already substantial black market.

As illicit trade becomes more advanced, how do governments protect their revenues, citizens, and natural resources?

According to the latest US Tax Foundation report, ‘Cigarette Taxes and Cigarette Smuggling by State, 2022’, growing cigarette tax levels and price differentials have made cigarette smuggling a persistent, national problem in the United States. But price is not the only culprit, with state bans on flavoured tobacco and nicotine products also driving up levels of cross-state smuggling.

Enforcement authorities in Europe have taken down a criminal group operating an intricate cigarette trafficking scheme across several EU countries.

This article looks at the newly created, massive illicit market in vapor products originating mainly from China and sold in the United States (US). Despite being banned in both China and the US, brands like Elf Bar, Geek Bar, and Lost Mary continue to circulate. What’s more, they carry authentication labels that falsely suggest legitimacy, further exacerbating illicit trade.