Full Breakdown
Organised Crime Shifts to Illicit Tobacco Production and Governmental Push-Back in Europe and New Zealand
9/9/2026, 6:39:17 AM
The EU’s Illicit Cigarette Boom
The European Court of Auditors (ECA) reports that almost 10 % of cigarettes consumed in the EU are produced illicitly or smuggled, costing an estimated €13 billion in lost tax revenue each year. Factories have been uncovered in nearly every member state, including a Belgian plant that ran four lines capable of producing 1 million cigarettes per hour with a 50-person workforce, and a Spanish facility from which police seized 3 million packs, 5 tonnes of raw tobacco and €15 million worth of product.
These operations typically run for two-to-four months, employ sophisticated equipment and technicians, and tailor output to specific national markets. Although overall tobacco consumption in the EU continues to decline, the share of illicit products rose to 8.8 % of total consumption in 2023.
New Zealand’s Ministerial Response to Organised Crime
In New Zealand, the government created a “Minister of Organised Crime” role, appointing Casey Costello to lead a coordinated response. An advisory panel warned that the lack of a single accountable minister had allowed organised crime to become the nation’s top security threat. The panel recommended a national information-sharing framework and stronger legal tools, such as mandatory disclosure of ultimate beneficial owners and tougher rules on “phoenix” companies.
Costello has formed a board of senior agency CEOs, co-chaired by Police Commissioner Richard Chambers and Customs Comptroller Christine Stevenson, to replace the previously proposed oversight agency. The board will be supported by an existing police-based secretariat focused on transnational organised crime.
Data & Statistics
- Illicit cigarettes: ? 10 % of EU market; €13 bn tax loss annually.
- Factory output: up to 1 million cigarettes per hour per line; 3 million packs seized in Spain.
- Illicit share of consumption: 8.8 % in 2023.
- New Zealand advisory panel identified 13 different ministers with overlapping responsibilities for organised-crime policy.
Why It Matters
The EU’s shift to domestic illicit manufacturing shortens supply chains, lowers prices and undermines public-health policies, especially for young people. In New Zealand, fragmented authority has hampered enforcement, prompting a structural overhaul aimed at improving coordination, accountability and the ability to target criminal finances.
Verbatim Quotes
- “Criminals involved in the illicit tobacco trade are succeeding not because Europe lacks legislation but because gaps remain in coordination, information and enforcement,” — Petri Sarvamaa, European Court of Auditors
- “Ministerial priorities heavily influence ‘current state’ agency action. If disrupting organised crime is not seen as a political priority, agencies are less likely to allocate resources or focus attention on it,” — Steve Symon, advisory panel chairman
- “The sharing of information, the data lake, is a key problem to resolve,” — Casey Costello, Minister of Organised Crime
Conflicting Reports & Gaps
The ECA acknowledges that information on the size, structure and economic impact of the illicit tobacco trade remains “incomplete and unreliable.” No alternative estimates are provided, leaving the true scale uncertain.
What’s Next
The EU’s report calls for a harmonised legal framework and improved cross-border enforcement to close coordination gaps. New Zealand’s minister plans to advance legislation on beneficial-owner disclosure and to develop the proposed “data lake” for inter-agency information sharing.
