European Union citizens spend about 24 billion euros ($NZ40 billion) on illicit drugs every year, a report says, making it one of the continent's most profitable activities for organised crime groups.
The report, drawn up by Europol and European Union drugs monitoring centre EMCDDA, said the advent of new technology such as encrypted networks and digital currencies had opened a new market for the online supply of drugs.
"Illicit drug production and trafficking remains one of the largest and most innovative criminal markets in Europe," Europol director Rob Wainwright said in a statement on Tuesday (local time).
While technological advances were made, organised crime groups also sought out new routes to smuggle drugs into Europe, the report added, such as heroin increasingly being shipped through the southern Caucasus.
Europol's Wainwright added that co-operation between member states was needed to address the problem, also because criminal networks involved in the drug trade often branched out into other areas of crime.
"Concerted cross-border law enforcement co-operation is essential in reducing its scale and impact," he said.