European Union citizens spend some 24 billion euros ($27.28 billion) on illicit drugs every year, a report said on Tuesday, making it one of the continent's most profitable activities for organized crime groups.

The report, drawn up by Europol and European Union drugs monitoring center 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.

While technological advances were made, organized 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 cooperation 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 cooperation is essential in reducing its scale and impact," he said.

(Reporting by Robert-Jan Bartunek; Editing by Tom Heneghan)