The illegal tobacco trade is on the rise across the European Union, according to a recent report by the European Court of Auditors (ECA), the EU’s financial watchdog. Nearly 10% of all cigarettes produced in the EU are either made illegally or smuggled, leading to an estimated annual loss of €13 billion in tax revenue. The ECA noted that while smuggling remains a concern, the bigger problem now is the rise of illicit manufacturing, which has grown dramatically in recent years. Organized crime groups are increasingly setting up production inside the EU to cut down on supply chains and bring products closer to consumers. Petri Sarvamaa, a representative of the ECA, explained that illegal cigarette factories have now been found in almost every EU member state, indicating the widespread nature of the issue. One example cited by the ECA is a large-scale illegal cigarette factory in Belgium that was dismantled by police last year. The facility operated 24 hours a day, employing 50 workers across four production lines, each capable of producing 1 million cigarettes per hour. In another major raid in Spain, police seized 3 million packs of cigarettes worth €15 million, along with five tonnes of raw tobacco valued at €5 million, and arrested 20 people. The products from this factory had been distributed across six EU countries. Sarvamaa described the scale of these operations as "remarkable," noting that even relatively new operations, such as a cross-border factory supplying Lille, France, had already made 120 deliveries of 7,500 packs each in just a few months. These illicit factories, which typically operate for two to four months, use advanced equipment and employ skilled technicians to set up and maintain their machinery. Organized crime groups often divide production among multiple facilities and place them in border regions to maximize their reach. They also tailor their operations by producing specific cigarette brands for different markets and even developing new tobacco products. The impact of this trade goes beyond lost tax revenue. It undermines public health efforts by making tobacco more affordable and accessible, particularly to young people. It also funds organized crime and other illegal activities, compounding the social and economic damage. Despite efforts by the EU and its member states to combat the illegal tobacco trade, challenges remain. The ECA noted that European law in this area is not fully harmonized, and member states have implemented different control systems, definitions of offenses, and penalties. This inconsistency allows criminals to exploit jurisdictions with more lenient laws. Information sharing among EU countries is also uneven, creating enforcement gaps. Sarvamaa emphasized that the success of organized crime in this area is not due to a lack of laws, but rather to gaps in coordination, information, and enforcement. He called for a unified strategy to counter the growing threat of illicit tobacco production and distribution across the EU.