Tobacco remains the king of the market, but new technologies are pushing to dethrone it. Heated tobacco products have won over 13 million Italians. At the same time, however, the phenomenon of illegality is growing: 2 million people prefer the black market. This is the snapshot emerging from the analysis of Euromonitor’s report “Production and Consumption of Counterfeit Cigarettes in Europe” and the research “Smoking and Non-Smoking Products: Study on the Phenomenon of Illegality,” carried out by Logista in collaboration with Ipsos Doxa.
HOW TOBACCO CONSUMPTION IS CHANGING
Data for 2025 confirm the metamorphosis of tobacco consumption. The traditional cigarette has lost ground. Today it is preferred by 80.1% of Italians, compared to 87% in 2023. At the same time, consumers of smoking products and new alternatives (vapers and pouchers) have reached 13 million.
In particular, electronic cigarettes are accelerating growth. The percentage of consumers has risen from 16% in 2023 to the current 27.1%, equal to about 3.5 million people. The segment of heated tobacco (inhalation sticks) remains stable at around 24%, consolidating a market worth 4.4 billion euros.
MARKET FIGURES (LEGAL AND ILLEGAL)
Overall, the market is worth 24.5 billion euros. Traditional tobacco contributes 18.3 billion euros, inhalation sticks 4.4 billion €, and e-cigarettes 1.8 billion €. These numbers reveal a sector vital to the treasury but constantly threatened by the black market. Despite effective controls, recourse to unofficial channels is increasing. In fact, in 2025, as many as 13.8% of consumers (1.8 million people) admitted to making illicit purchases. The situation in the European Union is no better. In 2024, volumes of counterfeit cigarettes rose from about 4.1 billion units to 13.4 billion, representing about one-third of the illicit cigarette market in the EU.
This phenomenon is not only a matter of safety but a real economic damage to the system, as shown by Euromonitor’s report “Production and Consumption of Counterfeit Cigarettes in Europe” and the research “Smoking and Non-Smoking Products: Study on the Phenomenon of Illegality,” carried out by Logista in collaboration with Ipsos Doxa. Just think that last year the black market created a hole of 690 million for the Italian state, linked to lost tax revenues. At the same time, illegality in the sector caused a turnover loss for the supply chain of 630 million €, putting about 5,900 jobs at risk. For the European Union, a loss of 14.9 billion euros in tax revenues is estimated for 2024, accompanied by increased public health risks, labor exploitation phenomena, and broader security issues, often connected to other forms of crime.
SMOKING, BLACK MARKET CHANNELS
Illegality moves along different tracks depending on the product. 66% of illicit traditional tobacco sales still occur physically. 61% of e-cigarette purchases, however, take place online. One of the main obstacles to combating illegality is the information deficit. In fact, only 15% of users interviewed for Logista’s research said they were well informed about the new ban on online sales of nicotine products, a sign that the path to fully aware legality is still long.
Paradoxically, the Security Decree enacted by the Government in 2025 contributed to increasing illegality. In fact, the closure of several physical Cannabis Light stores corresponded to an immediate shift towards parallel markets.
SMOKING, EXCISE AND TED DIRECTIVE ISSUES
The fight against illegality in the sector now moves to Brussels. The revision of the European Tobacco Excise Directive (T.E.D.) aims to increase taxation to harmonize markets. However, Logista’s analysis highlights that an excessive increase could be counterproductive.
According to estimates, the proposed price hikes on traditional tobacco alone could push over 1 million people towards the black market, leading to tax revenue losses exceeding the psychological threshold of one billion euros and putting a total of 6,400 jobs at risk.
“We hope that the discussion on the European Directive can conclude in a balanced and non-ideological way, so as not to nullify the work carried out by control bodies and not to penalize the legal supply chain,” said Federico Rella, Vice President of Logista Italy.
(Excerpt from an article published on Policy Maker)
