Illicit nicotine pouches are most evident where rules are strictest, new report finds

Illicit nicotine pouches are most evident where rules are strictest, new report finds

TobaccoIntelligence's Global Illicit Nicotine Pouch Report 2026 shows why the illegal trade is growing.

The illicit nicotine pouch market thrives when regulation is strict, a new report from TobaccoIntelligence concludes.

“The Global Illicit Nicotine Pouch Report 2026” examines the drivers of illicit pouch markets worldwide, from outright bans and nicotine caps to online restrictions and taxation.

It highlights some startling characteristics of illicit pouch markets:

• Banned markets stay large. Germany (a de facto ban) and France (a ban) are still the ninth and 22nd largest markets globally, at US$195m and US$34m. In mid-2026, fewer than half of French pouch users knew of the ban.
• Stringent limits on nicotine content do not stop consumer demand for higher-nicotine products. In Norway, 68% of users surveyed use a product above the proposed limit. Ultra-strong pouches of up to 50 mg are most common where the category is banned or de facto banned.
• Online restrictions simply divert traffic, rather than stopping it. In 2025, just 10% of Sweden's pouch-related web traffic went to foreign websites – but in Germany, where there is effectively a ban on pouches, the figure was 90%.
• Uncollected taxes mount up. Hungary collected HUF 731m in 2025 – less than 40% of the HUF 1,889m we estimate it should have, if tax had been paid on all pouch products.

A fast-growing category with a fragmented rulebook

Nicotine pouches are the fastest-growing alternative to combustible tobacco: a category worth around US$10bn, with more than 20 million consumers and 44% compound annual growth over 2021–2026.

TobaccoIntelligence forecasts double-digit growth over the next five years; how much of that growth stays illicit is the open question.

Illicit trade in these products includes some deliberate criminal activity. A pouch can be illicit because it is counterfeit or smuggled, it has not been notified to authorities as required, it has no tax paid, it is sold through a prohibited channel, or a seller missed a rule change.

"Illicit nicotine pouches are a by-product of rapid growth, fragmented regulation and limited enforcement, and they affect consumers, governments and compliant businesses alike. This report is an attempt to define the nature and scale of the problem. Our role is to provide independent data and analysis, and we hope it supports a better-informed debate."

Tim Phillips, Founder of TobaccoIntelligence

With the EU expected to introduce new rules through the next Tobacco Products Directive and the Tobacco Taxation Directive, the report sets out four ways to address illicit growth: consistent rules between neighbouring countries, simple rules that are easy to enforce, better data, and closer cooperation between governments.

About TobaccoIntelligence

TobaccoIntelligence provides independent coverage and analysis of regulatory developments, taxation, illicit trade and market trends affecting the global novel nicotine and alternative tobacco sector. We provide our clients with the tools to navigate this fast-moving sector, tailor their business strategy, optimise resources, and make informed decisions.

It is published by Tamarind Intelligence, which also produces the ECigIntelligence service.

e: info@tobaccointelligence.com