The Philippine Bureau of Customs seized an estimated P105.58 million ($1.9 million) worth of illicit cigarettes in Bataan, uncovering more than 1,000 master cases transported in 12 vehicles and traced to shipments originating from China, Vietnam, and South Korea. Authorities said the cigarettes—bearing brands including Modern, RGD, Nise Baisha, and President—were intended for distribution in northern and central Luzon, underscoring ongoing enforcement challenges as Customs intensifies its anti-smuggling campaign amid revenue shortfalls and a higher 2026 collection target.
Tag: illicit cigarettes
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Hong Kong Customs Seizes $3M in Untaxed Cigs
Hong Kong Customs seized about seven million untaxed cigarettes valued at HK$31.5 million ($4.1 million), with an estimated duty potential of HK$23 million ($3 million), during a raid on an industrial building in Fo Tan on December 30. A 45-year-old local man was arrested after officers spotted him moving cartons from a unit late at night, discovering about 600,000 cigarettes on him and another 6.4 million inside the premises.
Customs said the roughly 1,000-square-foot warehouse, formed by merging two units, contained large quantities of cigarettes and packaging materials, indicating plans to repackage and smuggle the products to overseas markets with higher tobacco taxes. Some illicit brands appeared to be stockpiled for the Christmas and New Year period. Authorities said investigations into the source and distribution network are ongoing, and further arrests are possible.
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Modernization and Enforcement Needed for Pakistan’s Illicit Crisis
Pakistan’s tobacco industry is facing mounting pressure as illicit cigarettes tighten their grip on the market, eroding government revenue and undermining the legitimate sector, according to experts. Macroeconomic analyst Osama Siddiqui said the country needs a robust track-and-trace system and stronger coordination among enforcement and revenue authorities to monitor production, distribution, and retail.
“Without a decisive crackdown on the illicit tobacco trade, Pakistan’s legal industry will continue to suffer while the black market thrives unchecked,” Siddiqui said. “A modernized supply chain and sustained enforcement are the only ways to reclaim lost revenue and restore market fairness.”
Recent estimates indicate that illicit cigarettes now make up more than half of total sales, costing the national exchequer over Rs 415 billion ($1.5 billion) annually. The smuggled, untaxed, and/or products sold below the legal minimum price continue to weaken the formal industry’s competitiveness while fueling organized black-market networks, experts say.
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Cigarette-Smuggling Balloons Shut Down Lithuanian Airport
Balloons carrying thousands of packs of illicit cigarettes shut down the Vilnius Airport in Lithuania when they floated into the country’s airspace.
According to the National Crisis Management Centre (NCMC), 25 meteorological balloons were detected entering the country from Belarus, and two ended up directly over the airport.
The “airspace violations” follow a number of drone incursions suspected of being linked to Russia disrupting air traffic, according to the BBC. Russia has denied any involvement.
“Balloons with contraband cargo—cigarettes from Belarus—are nothing new in Lithuania, Latvia, and Poland,” said a NCMC spokesperson. This year, 544 balloons have been recorded entering Lithuania from Belarus, according to the spokesperson. Last year, 966 balloons were recorded.
“Meteorological balloons are a rudimentary tool used by smugglers—they are cheaper than drones for transporting cigarettes from Belarus,” the spokesperson said. “Our services’ aim is to seize the largest possible quantities of contraband and to detain organizers and perpetrators so that this activity is unprofitable and does not pose a risk to civil aviation.”
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Illicit Cigarettes Still Increasing in Philippines
Illicit cigarettes in the Philippines are still on the rise, according to PhilStar. The latest market survey shows that illicit cigarettes can be bought for PHP3 to PHP4 ($0.05 to $0.06) per stick. The lowest priced legal brand is PHP7 per stick.
One of every five cigarettes sold comes from an illegal source. Illicit cigarette trade was 7.4 percent of total volumes in 2021, and in 2025, illicit cigarette trade is at 20.9 percent. Smoking prevalence has also increased from 18.5 percent of adults in 2021 to 23.2 percent in 2025. Youth smoking has doubled from 2.3 percent to 4.8 percent.
The Philippines Bureau of Internal Revenue estimates that the country loses at least PHP50 billion annually from smuggling and illegal manufacturing.
Legal cigarette production dropped from 62.6 billion sticks in 2021 to 39.1 billion in 2025.
According to PhilStar, illicit cigarettes contain harmful chemicals like cadmium, lead, and contaminants like insect parts and human waste. Counterfeit “tuklaw” cigarettes contain synthetic cannabinoids, which have led to severe health issues.
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Police Bust Illegal E-Cigarette Factory in Bangkok
Thai police raided an illegal e-cigarette factory in Bangkok’s Bang Khunthian district, arresting two Chinese managers and seizing around 20,000 vaping products along with production equipment. The Economic Crime Suppression Division (ECD) acted on a tip that the facility, rented by Chinese investors, was being used to manufacture and store vaping devices and liquids, which are banned under Thai law.
Two Chinese nationals were taken into custody and charged with colluding in the production and sale of illegal e-cigarettes. Authorities also detained 11 Myanmar nationals working at the warehouse, identified as illegal migrants. The suspects and seized materials have been handed over to ECD investigators for further legal action.
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Philippines Seizes $10.9M Cigarettes in Bulacan
The Philippines’ Bureau of Customs (BOC) seized ₱605.3 million ($10.9 million) worth of smuggled cigarettes imported from China and Vietnam during a raid on a warehouse in Plaridel, Bulacan. Authorities confiscated 8,647 master cases of cigarettes that had bypassed customs inspection. Three people—the warehouse owner, a driver, and a helper—were arrested.
Assistant Commissioner Vincent Maronilla said such products are usually distributed in provincial areas, and that the investigation continues to see how the illegal products made it into the country. The cigarettes will be destroyed under standard procedures, while criminal complaints will be filed against the warehouse proprietor.
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At the Turning Point
Smuggled cigarettes on the Latvian border Belarus’ role in the illicit cigarette trade is under scrutiny.
Contributed
For years, Belarus has been under scrutiny for its alleged distribution of illegal counterfeit cigarettes, a practice that is now under severe pressure in the current political landscape. This pressure casts a shadow of uncertainty over the industry’s future.
A cornerstone of the Belarus national budget, the tobacco industry contributed BYR2.5 billion ($76.45 million) in 2023. However, the industry is now facing alarming trends, as highlighted by Belarus President Alexander Lukashenko during a governmental meeting in August 2024.
The reasons for the existing challenges might be different, Lukashenko vaguely said, emphasizing that despite that, “It is necessary to develop measures to preserve production and export volumes to the maximum extent possible.”
The Belarusian tobacco industry has been shrouded in secrecy for over a decade. In 2015, the last time official information was revealed, Belarusian authorities set the quota of cigarette consumption on the domestic market at 30 billion pieces. At that time, local analysts indicated that the figure had nothing to do with reality.
Research by KPMG showed that the actual consumption of cigarettes in Belarus is close to 18 billion pieces. Around 13 billion cigarettes are exported, of which 8.6 billion end up in Russia and 4.3 billion in the EU.
Woes about the flow of cheap cigarettes, often smuggled, from Belarus have become common in recent years not only in the European Union but also in Russia.
In 2020, the Russian association Anticounterfeit calculated that Belarus’ domestic consumption was around 17 billion cigarettes and that production nearly three times exceeded the country’s demand. In a letter to the Russian Ministry of Justice, Anticounterfeit claimed that cheap cigarette production was put on an industrial scale in Belarus. The nameplate capacity of the Belarusian tobacco factories was estimated at 67 billion pieces, meaning export potential was tremendous.
In 2023, Belarus accounted for 84.5 percent of illegal cigarettes sold on the Russian market, estimated the Russian National Scientific Competence Center for Combating Illegal Circulation of Industrial Products. In total, illegal—counterfeit and smuggled—cigarettes represented 15.6 percent of sales on the Russian market. This illicit trade cost the Russian budget around RUB130 billion ($1.35 billion) of lost income in 2023, the analysts calculated.
Belarussian tobacco consumption is estimated to be close to 18 million pieces per year. Shut Borders
During the past few years, the flow of illegal cigarettes from Belarus to the European Union has subsided, as in the context of political tensions, the Baltic countries and Poland tightened border controls.
As estimated by KPMG, the volume of smuggled cigarettes from Belarus to the EU dropped by 500 million in 2023 and by almost 2 billion pieces over the past three years. The analysts also cite the tighter control and closure of a number of checkpoints on the border for the decline. The place of Belarusian cigarettes is being taken by suppliers from other countries, primarily Turkiye and Algeria.
Counterfeit supplies from Belarus to European countries decreased from 2.1 billion to 1.5 billion cigarettes over the year.
However, Belarus remains the absolute leader in the supply of illegal “white” cigarettes, which mean those smuggled and sold under their own brands to European countries.
In this category, Belarus holds a staggering 43 percent share in total deliveries to Europe. A year earlier, this figure was around 52 percent, KPMG calculated.
The most popular western destination for tobacco smuggling from Belarus is Poland. Last year, 0.74 billion illegal Belarusian cigarettes entered the country, which is almost 17 percent less than in 2022 and almost half as much as in 2020. The supply of illicit cigarettes from Belarus to Lithuania fell by 15.2 percent to 0.39 billion pieces and from Belarus to Latvia fell by 27.35 percent to 0.16 billion pieces.
Russia has declared war on counterfeit cigarettes from Belarus. Unraveling Tobacco War?
However, the main blow comes from the Russian market, where authorities also tightened the screws on illegal sales. Observers believe that problems in Russia were the key reason for Lukashenko’s concerns during the recent government meeting.
“The meeting is definitely not happening out of nowhere. But we need to call things by their proper names. We are not talking about problems with exports but with smuggling. Legal exports have been virtually nonexistent for a long time,” Nick & Mike, a local analytical Telegram channel reported.
“Strengthening controls on the western border, where Belarusian state counterfeit goods are seized in industrial quantities, including from tanks with resin, is nothing compared to what the eastern neighbor is doing. Russia has tacitly declared a ‘tobacco war’ and has been striking at illegal businesses,” the analyst claimed, referring to the intensified efforts by Russian authorities to curb illegal tobacco traffic from Belarus.
For years, Russian authorities have been turning a blind eye to illegal cigarette imports from Belarus, but this era seems to be coming to its end, a source in the tobacco industry who wished to remain anonymous told Tobacco Reporter.
“I would not call it a war, though. This is primarily about bringing the domestic market in order. Everybody knew that a situation where Russia loses over $1 billion in tax revenues every year to cigarette smuggling from Belarus would not last forever. The country could afford it during the rich times, but now every penny counts,” the source added.
In April 2024, Russia listed tobacco products among the goods of strategic importance. Andrey Mayorov, deputy head of the main directorate for customs control at the Russian Federal Customs Service, revealed that this move helped the authorities tighten their control of illegal tobacco traffic. One of the first consequences of the step, he added, was a hike in the number of criminal cases opened against tobacco smugglers.
More legal changes are on the way to turn down illegal cigarette imports to Russia from Belarus.
An agreement on indirect taxes between Russia and Belarus scheduled to gradually come into force through 2027 is expected to fully protect the Russian market from gray imports of cigarettes from Belarus, assumed Alexei Sazanov, deputy finance minister of Russia.
“The problem of gray imports stems from a significant difference between tax rates in the countries: Russian excise rates on tobacco products are significantly higher than in Belarus. This means that Belarusian tobacco manufacturers, producing cigarettes in their country, simply supply part of the goods to the Russian market, de facto paying taxes at Belarusian rates,” Sazanov explained.
The reform is stretched in time not to provoke “social and economic tensions in Belarus,” the deputy minister added.
Change of Players
The Belarusian tobacco industry is also going through a profound transformation, with Western companies gradually reducing their presence in the country.
In September 2024, Japan Tobacco International and its British subsidiary Gallaher Group terminated licensing agreements with the Tabak-Invest factory, suspending production of the brands Winston, Camel, Sobranie and Monte-Carlo.
JTI’s Minsk office confirmed that the agreement originally concluded in 2008 is no longer in force, declining to provide additional details.
In December 2023, Tabak-Invest and several of its co-owners were subjected to U.S. sanctions. The restrictions prohibited U.S. citizens and businesses from any deals with sanctioned parties.
In the meantime, JTI continues doing business in Russia. In March 2022, the company announced a suspension of investments in its four factories and marketing activity in the country. However, in November 2023, the company announced it would continue operations, complying with international and Russian regulations.
JTI may switch to importing its brands from Russia to Belarus, writes Belmarket, a local business news outlet. Alternatively, the company could sign a new license agreement with a Belarusian tobacco factory that is not subjected to Western sanctions. This could be newcomers Sentoni PRO and Alidi-West, Belmarket’s analysts speculated.
Alidi-West is a Russian company that distributes Kent cigarettes. It kicked off sales in Belarus in July 2024. Sentoni PRO is another firm registered to sell cigarettes in the country this year.
According to the Belarusian Ministry of Taxes and Duties, Sentoni PRO will produce Kent, Pall Mall, Rothmans, Vogue and Lucky Strike brands.
These players may also launch production at the capacities previously run by Western firms.
BAT in Belarus held a contract manufacturing agreement with the Grodno tobacco factory Neman. After Neman was subjected to the U.S. sanctions in 2021, the contract was canceled, and a part of BAT’s production was transferred to Tabak-Invest.
Around the same time, sanctions were also imposed against another Minsk factory, Inter Tobacco, which forced Philip Morris to withdraw from the license production.
In September 2023, BAT announced a deal to sell its business in Russia and Belarus to a consortium of Russian investors and local management, BAT Russia. Upon completion of the “business transfer,” the new structure became known as the ITMS Group of Companies. BAT left the business to its management along with the rights to the trademarks.
The gradual withdrawal of foreign business from Belarus could add pressure to the tobacco industry, which is braced for a hard time ahead.
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Belgium Shuts Down Illegal Cigarette Factory
Photo: Tobacco Reporter archive Belgian Customs, with the help of Europol’s European Financial Economic Crime Center (EFECC), raided and shut down an illegal cigarette manufacturing factory in a former pet hotel in Arlon, Belgium, according to Europol.
Belgian authorities seized the complete cigarette manufacturing machinery and arrested 14 workers, mainly from Eastern Europe. Also seized were 4 tons of tobacco and 2 million counterfeit cigarettes.
Additionally, 40 million counterfeit cigarettes were seized in trailers in an industrial area in Duffel, Belgium. These cigarettes were presumed to have been manufactured at the illegal factory in Arlon and were most likely destined for the black market in France and the U.K.
French Customs was also involved in the investigation, seizing over 25 tons of cigarettes and 16 tons of tobacco from the same organized crime group in the city of La Longueville.