[PeterisP]

My observation about cigarettes is exactly a counterexample showing that, despite the criminal operation expenses, in practice the black market is able to undercut a heavily taxed legal market - not for everyone, probably not even for the majority of the market, but for a substantially large portion of population to have a meaningful consequences in corruption and organized crime.

It's getting better now, but mostly because cigarettes as such are being undercut by vaping that's cheaper.