One in Four Cigarettes in Mexico Is Illicit, Study Finds

Mexico City — Nearly one in four cigarettes consumed in Mexico last year was illicit, according to a new study that highlights a growing black market costing the country an estimated $1.3 billion in lost tax revenue.

The report, commissioned by tobacco company Philip Morris and conducted by consultancy KPMG, found that Mexico recorded consumption of 9.19 billion illicit cigarettes in 2025. This represents 23.3% of the total market of 39.37 billion cigarettes, a slight increase of 0.7 percentage points from the previous year.

The study, part of a regional analysis covering 11 markets in Latin America and Canada, shows Mexico’s total cigarette consumption fell by 3% in 2025, driven by a continued decline in legal domestic sales. Legal domestic consumption dropped from 34.08 billion cigarettes in 2021 to 30.16 billion in 2025, while illicit consumption rose from 7.02 billion to 9.19 billion over the same period.

“The main finding for the Mexican market is that legal domestic consumption continued to lose ground,” the report states, noting that the decline has been partially offset by an increase in imported cigarettes, known in the industry as non-domestic entries.

The illicit market in Mexico consists primarily of “Illicit Whites”—cigarettes legally manufactured in one country but smuggled into others—which accounted for 2.79 billion units. Counterfeit products also gained prominence, adding 490 million units in 2025.

Key brands and components in the illicit segment include Link, with 2.4 billion cigarettes; D&J, with 880 million; Económicos, with 570 million; and counterfeit products, with 490 million.

The study notes that illicit trade entering Mexico comprises “other nationals,” “Illicit Whites” without specific country labeling, and flows from Nicaragua. Legal non-domestic entries, primarily from the United States, represent a smaller portion of total imports.

Mexico’s illicit consumption rate remains below the regional average of 31.9% for Latin America and Canada. The country exported minimal volumes to other markets included in the study, with 10 billion cigarettes sent to Costa Rica and the same amount to Colombia.