The EU Court of Auditors warns of an increase in illegal tobacco production, resulting in €13 billion in lost taxes.

The European Court of Auditors has issued a warning regarding the rise of illegal tobacco production within the European Union, estimating annual tax losses of 13 billion euros. The report highlights a strategic shift in illicit operations, with production facilities moving directly into EU territory to shorten supply chains and bypass regulatory hurdles.

This relocation allows smugglers to capitalize on regulatory disparities between member states and position themselves closer to end consumers. By moving manufacturing closer to the point of sale, criminal networks are effectively reducing the logistical risks and costs associated with traditional cross-border smuggling routes.