Illicit Cigarettes Surge to One-Third of Regional Market in Americas
Event summary
- 31.9% of cigarettes consumed in 2025 across 11 countries in the Americas were illicit, per a KPMG study commissioned by Philip Morris International.
- 77 billion illicit cigarettes were consumed in 2025, costing governments an estimated $8.5 billion in lost tax revenues.
- Brazil accounted for 41.8 billion illicit cigarettes, while Panama and Ecuador saw illicit products make up 89% and 84% of total consumption, respectively.
The big picture
The study highlights a structural issue in tobacco markets where extreme regulations and steep tax hikes drive demand toward illegal channels. Philip Morris International positions itself as a partner for governments, advocating for balanced regulations that could indirectly reduce illicit trade by promoting smoke-free products. The scale of lost tax revenues underscores the broader economic and security implications of unchecked illicit cigarette consumption.
What we're watching
- Regulatory Response
- Whether governments will adjust tobacco tax policies and enforcement strategies to curb illicit trade.
- Market Displacement
- The pace at which illicit products continue to displace legal markets in high-risk countries like Panama and Ecuador.
- Public Health Impact
- How the unregulated parallel economy of illicit cigarettes affects public health and institutional integrity.