Could hinder EU accession: Ukraine’s tobacco black market has reached 17.6%
17 June 13:07
The high share of the illicit tobacco market in Ukraine, which currently stands at 17.6%, risks becoming a serious barrier to the country’s path toward European integration. This was stated in an interview with RBC-Ukraine by the new CEO of JTI Ukraine, Alexander Farkosh, according to "Komersant Ukrainian".
Once the borders open within the EU single market, illicit products from Ukraine will be able to enter Europe unhindered, where cigarette prices are significantly higher. According to Oleksandr Farkosh, this will generate windfall profits for players in the black market.
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“This will be critical for the EU. They keep very close track of their taxes and excise duties. If 20% of Ukraine’s illegal market were to appear, for example, in Germany, the losses would no longer be 26 billion hryvnias, but several billion euros. And the European Union would bear those losses,” emphasized the CEO of JTI Ukraine.
The company’s CEO noted that in 2025, Ukraine’s state budget has already lost approximately 26.5 billion hryvnias due to the “shadow market.” If the situation does not change, then due to annual increases in excise taxes and rising profits for black-market operators, losses from illegal cigarettes alone could reach 32 billion hryvnias by 2027.
Farkosh cited annual excise tax hikes and a lack of proper law enforcement as among the reasons for the growth of the illegal market.
According to him, in 2018, the share of illegal cigarettes was less than 5%, but with the start of full-scale war, it began to rise and reached a record high of 25.7% in October 2023.
In 2024, thanks to stricter government oversight and attention from international partners, the figure was reduced to 12.6%. However, in 2025–2026, the trend reversed again.
Farkosh also noted that, in addition to conventional cigarettes, 93% of the e-cigarette market operates in the gray market.
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