August 2026: Over 93% of E-cigarettes in Ukraine Fail Legal Compliance, Study Reveals
More than 93% of e-cigarettes on the Ukrainian market do not comply with legal requirements, with only 4% of products meeting all statutory regulations, according to a study conducted by Kantar Ukraine at the request of the country’s largest tobacco manufacturers. The research, conducted in April and May 2026, was based on a sample of 600 interviews with regular e-cigarette users who vape at least once a week.
In terms of device types, 63% of vapers use refillable e-cigarettes, 39% use disposable vapes, and 18% use pod-based vapes. The highest level of illicit products was recorded in disposable and pod-based vapes, where the share of non-compliant goods approaches 100%. The market for devices and pods is heavily dominated by three Chinese manufacturers – VapeOnly, Smoore, and Woody Vapes – which together occupy two-thirds of the segment. Regarding purchasing preferences, 75% of consumers buy their electronic cigarettes offline, while 25% purchase them online. Among regular users, the average liquid consumption is 1.7 ml per day.
Background:
In 2012, cigarette sales in Ukraine reached 83.4 billion units, establishing the country as a major strategic market in the European tobacco industry. Over the following decade, legal sales declined at a compound rate of roughly 8% per annum – more than halving by 2021. This contraction was driven by an aging population, the expansion of illicit trade fueled by steep excise tax increases, and the rapid growth of Reduced-Risk Products (RRPs). Following the 2016 launch of IQOS, Ukraine emerged as the world’s fourth-largest heated tobacco market, reaching 1 million users. By 2022, Ukraine had also become Europe’s second-largest market for illicit consumption, with illegal volume hitting 7.4 billion sticks, or 20% of total consumption. As of 2021, four multinational manufacturers – Philip Morris International (PMI), British American Tobacco (BAT), Japan Tobacco International (JTI), and Imperial Brands – held a combined 92% market share, with local manufacturer Vinnykivska Tobacco Factory (VTF), maker of the Marvel brand, accounting for the remaining 8%.
The full-scale Russian invasion of Ukraine in February 2022 triggered mass population displacement and major supply disruption, contracting the total market by more than 20%. PMI experienced the steepest impact, reporting a 30% drop in total 2022 domestic sales volume, though its heated tobacco category (-14%) proved more resilient than its combustible cigarette business (-38%). Safety risks and the lack of a bomb shelter forced the suspension of operations at PMI’s primary facility in Kharkiv in February 2022. Following a two-month market absence, PMI initially met local demand via imports from eight overseas facilities before outsourcing domestic manufacturing to Imperial Brands’ plant in Kyiv. In June 2023, PMI announced a $30 million investment to construct a new manufacturing facility near Lviv in western Ukraine. Scheduled to open in April 2024, the plant is projected to generate 250 jobs and supply 80% to 90% of PMI’s domestic volume at full capacity.
Market conditions began stabilizing in 2023 as returning refugees restored consumer demand. Total industry volume grew 13% year-on-year in Q2 2023, benefiting from a low baseline in Q2 2022 when distributor inventory had been depleted. PMI posted a 50% volume rebound in Q2 2023 following a 27% contraction in Q1 2023, lifting its market share back to 24% after having halved from a peak of 28.5% during the height of the supply crisis.
Fiscal pressure will remain a dominant market headwind. Under a seven-year tax harmonization roadmap adopted in December 2017 to align with European Union standards, the Ukrainian government’s 2024 budget mandates a further 20% increase in both the specific excise rate and the minimum excise duty. Consequently, the average retail price for a pack of 20 cigarettes is projected to rise from UAH75 (US$2.10) to approximately UAH90 (US$2.50).
