Illegal vapes account for 93.6% of Ukraine’s e-cigarette market, study finds

Police report points to industrial-scale supply

Ukraine’s illegal e-cigarette market has expanded into industrial-scale production, according to a National Police report submitted to the Ukrainian parliament’s Committee on Finance, Tax and Customs Policy. Delo.ua reported that law enforcement agencies seized tens of thousands of products and production components during the first half of 2026.

Olga Vasylevska-Smahliuk, a member of parliament and deputy head of the committee, said the figures showed how far the underground vape segment had grown while the introduction of an electronic excise system was being delayed. According to figures she presented, police confiscated tens of thousands of e-cigarettes and more than one million components in the six-month period. Authorities also closed three illegal facilities producing e-cigarette liquids in the Kyiv region.

Illegal products take 93.6% of the market

The enforcement figures are consistent with a Kantar Ukraine study conducted in 2025. Vasylevska-Smahliuk said the research found that 93.6% of products circulating in Ukraine’s e-cigarette market were illegal. The highest illegal shares were recorded in disposable e-cigarettes and systems using replaceable cartridges, two categories that allow products to move through retail channels in standardized, easily distributed formats.

The scale separates the vape market from Ukraine’s already substantial illicit trade in conventional cigarettes. A Kantar Ukraine study published in October 2025 estimated that 17.8% of the conventional cigarette market was illegal, equivalent to 5 billion cigarettes. Although the two estimates cover different product categories, they indicate that the illegal share of the vape market is much larger.

Tax collection and legal trade face pressure

For the state, unregistered production and sales mean lost excise duty and value-added tax, as well as limited oversight of manufacturers and sellers. For legitimate consumer-goods companies, a market in which more than nine out of ten vape products are estimated to be illegal creates a severe price disadvantage: unregistered suppliers can avoid taxes and compliance costs that formal manufacturers, importers and retailers must bear.

The problem also affects control over trade flows. Products and components of unknown origin can enter production and distribution without the documentation normally used to trace suppliers, assess product quality or verify tax payments. This makes it harder to distinguish illicit domestic output from undeclared imported devices, liquids and components. The supplied police figures do not provide a breakdown by origin or import route.

Earlier enforcement action showed that the networks can operate across several regions. In autumn 2025, authorities dismantled a channel manufacturing and distributing counterfeit vapes across the Kyiv, Zakarpattia and Vinnytsia regions. Delo.ua said the estimated market value of the seized equipment and goods exceeded 10 million hryvnias. The latest parliamentary report suggests that individual raids have not yet reduced the illegal segment to a level at which registered producers and traders can compete under comparable tax and regulatory conditions.