Every Fifth Pack of Cigarettes Sold in Ukraine Is Illegal, Study Finds

In April 2026, the share of illicit tobacco products in Ukraine increased to 19.8% of the total market, meaning that nearly every fifth pack of cigarettes sold in the country was illegal.

This is according to data from the "Monitoring of Illicit Trade in Tobacco Products in Ukraine" project conducted by Kantar Ukraine on behalf of leading tobacco manufacturers.

"The main driver of the increase was the growth in counterfeit products, particularly cigarettes bearing counterfeit excise stamps. At the same time, the share of products marked as Duty Free or intended for export but illegally sold in Ukraine has remained stable since the beginning of the year, although it remains higher than in 2025," the experts explained.

At the current scale of the illicit market, annual losses to the state budget due to unpaid taxes are estimated at a record UAH 33.3 billion.

Counterfeit structure

Cigarettes produced by local manufacturers and bearing counterfeit excise stamps account for 38% of the total volume of counterfeit products. According to the information indicated on the packaging, the main manufacturer of such products remains Marshall Finest Tobacco (United Tobacco) / VK Tobacco FZE.

Products Marked as Duty Free or Intended for Export

In the segment of products marked as Duty Free or intended for export but illegally sold in Ukraine, 55% of cigarettes were manufactured by the Vynnyky Tobacco Factory, while another 44% were produced by Marshall Finest Tobacco.

The most common brands in this category remain Compliment, Marshall, Manchester, Urta, Lifa, and Brut.

Regional breakdown

The geographical distribution of illicit trade has not changed significantly. Seven regions account for 68% of all illicit tobacco products:

Dnipropetrovsk region – 18%
Odesa region – 11%
Kharkiv region – 10%
Kirovohrad region – 8%
Lviv region – 8%
Khmelnytskyi region – 7%
Kyiv and Kyiv region – 6%

Distribution channels

Despite a certain decline in illicit cigarette sales through kiosks, kiosks and retail stores remain the main distribution channels, accounting for approximately two-thirds of illicit tobacco product sales.

Earlier, Artem Konik, General Manager of Philip Morris Ukraine, stated that Ukraine loses approximately UAH 38 billion in tax revenues annually due to the illicit tobacco and vaping products market, while most retail outlets shut down by law enforcement agencies resume operations within just one week.

A study by the Institute for Socio-Economic Transformation (ISET) found that there are licensed tobacco manufacturers operating in Ukraine that officially have no employees and pay no taxes. Some of these companies continue to import significant volumes of tobacco raw materials into Ukraine, the fate of which remains unknown after they enter the country.