Illicit tobacco and vape market fuels organised crime, retailers say

Serious and organised crime in London is being fuelled by the black-market trade in illicit disposable vapes and cigarettes, according to one in three convenience store owners.

The survey of the independent retailers, conducted by KAM for Philip Morris Limited (PML),has revealed that youth tobacco and vape use, violent crime, and money laundering linked to the illicit trade are higher in London’s poorest communities.

The cost-of-living crisis is seen as a contributing factor, with half of all shopkeepers citing economic hardship and the demand for cheaper products as drivers of illicit use.

Over half (52%) of the retailers fear that higher taxes on legal products might boost the illicit market. Similarly, 44 per cent are concerned that restrictive regulations on legitimate alternatives could inadvertently increase illicit activity.

Retailers in London have called for immediate action to tackle the issue, including:

• Stronger law enforcement (72%) and harsher penalties for offending retailers (76%),
• Police powers to shut down rogue stores (84%),
• Better access to regulated smoke-free alternatives like e-cigarettes and heated tobacco (72%),
• Additionally, nearly 40% doubt that illicit use will drop by 2030 England's smoke-free goal, and seven out of ten are committed to supporting anti-illicit product efforts.

These insights coincide with a newly published KPMG report, commissioned by Philip Morris International (PMI), which highlighted the national scale of the problem.

The UK ranks third among 38 European countries for illicit tobacco consumption. Nationally, while overall cigarette consumption has decreased, the use of contraband and counterfeit cigarettes is rising, with one in four cigarettes smoked now illicit.

Regional data shows significant variations, with 11 out of 12 UK regions reporting an increase in illicit tobacco consumption compared to the previous year. Scotland saw the sharpest rise, with one in three cigarettes now illicit—a 20 per cent increase in just one year, the highest in the UK. In London, illicit cigarette use has surged by 109 per cent since 2020, with one in four cigarettes now illegal.

In a recent two-day undercover operation led by former Scotland Yard detective chief inspector Will O’Reilly, over half of the 60 London stores visited were found selling illicit cigarettes and disposable vapes.

“This is a pattern I’ve observed across the country, with stores selling dangerous illicit cigarettes and vapes” O’Reilly said. “Eliminating the illegal cigarette market alone could strip organised crime of profits equivalent to funding over 115,000 new police officers.”

Will O’Reilly

PML said these trends underscore the critical need for balanced policies that protect adult smokers’ access to regulated smoke-free alternatives—such as e-cigarettes and heated tobacco products—while preventing people from being driven toward dangerous illicit products.

“The illicit tobacco and vape trade poses a direct and serious threat to public health, preying on deprived communities and driving youth uptake,” Duncan Cunningham, director of external affairs at PML, stated.

“With the UK already among Europe’s largest illicit cigarette markets, we must strike a careful balance: safeguarding people, especially youth, from harmful illicit products, while ensuring adult smokers have access to smoke-free alternatives.”

Kamlesh Rathod

Kamlesh Rathod, a London retailer affected, now views the illicit tobacco and vape trade as a major part of the broader retail crime crisis currently gripping the UK.

“Retailers bear the brunt of the illicit tobacco and vape market, just as they do with shoplifting and in-store violence,” Rathod said.

“While Trading Standards are seen as the primary solution in tackling this issue, the role of retailers is often overlooked. With better support, we could raise awareness of the dangers of illicit products and guide adult smokers toward legal alternatives.”