Hungary is emerging as an important production hub in Europe’s illegal cigarette trade, according to a recent investigation by French broadcaster TF1, which visited clandestine factories previously dismantled by Hungary’s National Tax and Customs Administration (NAV). The report found that criminal groups are operating sophisticated production facilities capable of manufacturing hundreds of thousands of cigarettes, using industrial equipment, specialized logistics, and extensive networks to move products into Western Europe. NAV has recently seized large quantities of tobacco, counterfeit cigarettes, and manufacturing equipment, including a 2025 operation that confiscated 156 tons of tobacco and more than 1 million packs of counterfeit cigarettes.
The investigation comes as Europe’s illicit cigarette market remains substantial. KPMG estimates that 41.8 billion illegal cigarettes were consumed in the EU in 2025, representing 10.3% of total consumption and an estimated €16.7 billion in lost tax revenue. France was the largest illicit market, with about 20.5 billion illegal cigarettes consumed, while TF1 identified Eastern Europe, particularly Hungary, as an important source of supply. KPMG data also indicate that counterfeit production is becoming more prominent, with Hungary among the countries recording large volumes seized in factory raids.
NAV has also reported a 2026 operation targeting a Hungarian illegal factory linked to a cross-border criminal organization, underscoring the continuing challenge of dismantling networks that combine manufacturing, storage, transport, and sales across multiple European markets.
