Right. Not only do they smuggle illegal goods, but they'll do so with legal goods whenever there is a profit in doing so. In the case of the cigaretters, when enough money can be saved by avoiding the taxes to get people interested in the black market alternative. Get that profit margin up high enough and show enough of a demand, and you'll have offshore producers shipping their products directly to the black marketeers.
Get enough money flowing, and the various smugglers will start fighting over the market.