MADRID—Spanish police raided three clandestine tobacco factories early this year, seizing nearly 40 million euros ($44 million) worth of tobacco leaf and illicit cigarettes.
At one, in the northern town of Alfaro, they found 10 Ukrainian workers, five of them war refugees, who’d been put to work with no contracts and scant pay, police said. They worked all day for and lived at the factory, forbidden from leaving.
This operation is one of dozens across the EU that regional policing and anti-fraud agencies say have driven seizures of illicit cigarettes to record levels.
Crime groups, which have traditionally mainly sourced fake tobacco products from outside the EU, are increasingly setting up production facilities in western Europe to be closer to higher-priced markets, according to Reuters interviews with half a dozen specialists in the field, including enforcement officials, tobacco executives and industry analysts….