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  • EU Unveils Dual Tobacco Tax Proposals

    EU Unveils Dual Tobacco Tax Proposals

    Yesterday (July 16), the European Commission announced two major initiatives aimed at cutting tobacco use and boosting EU revenue: a long-anticipated revision of the Tobacco Taxation Directive and a new measure called the Tobacco Excise Duty Own Resource (TEDOR).

    The revised directive proposes higher minimum excise taxes and expands the scope to include e-cigarette liquids, nicotine pouches, and raw tobacco. Meanwhile, TEDOR would apply a uniform 15% levy on tobacco products released for consumption, expected to generate €11.2 billion annually.

    “While the proposal is meant to tackle the developments and emergence of new products (e-cigarettes, heated tobacco products, and new products containing nicotine), the European Commission also decided to revise the EU minimum rates applicable to traditional tobacco products,” the European Cigar Manufacturers Association (ECMA) said in a press release. “It disregards the different tax-bearing capacity of niche products from mass-produced tobacco and nicotine products, demonstrating a misunderstanding of the market.”

    “Increasing the EU minimum rate by 1,100% for niche products which are already the least affordable on the tobacco and nicotine market, is out of touch and completely irresponsible,” Paul Varakas, ECMA director general, said. “This proposal is very worrying. It goes against every commitment the EU Executive has made recently regarding reducing the regulatory burdens for SMEs and midcaps, companies that are largely dominating the cigar/cigarillo segment, as opposed to other products manufactured by Big Tobacco.” 

    While both measures aim to reduce tobacco use, particularly among youth, the TEDOR proposal is also part of the EU’s broader €2 trillion budget strategy.

    “[Commission President] Ursula von der Leyen and [European Commissioner for Budget] Piotr Serafin were both vocal about the need to increase Europe’s competitiveness by decreasing EU regulatory burdens,” said Adam Bartha, director of the European Policy Information Center. “The Tobacco Excise Duty Own Resource and the revision of the Tobacco Excise Directive goes against their own stated goals and increases the tax and regulatory burdens on Europeans without reducing smoking rates.”

    The Commission insists the reforms are vital to combat smoking and close loopholes fueling illicit trade, though opposition from countries like Italy and Greece could stall progress. However, both proposals face political hurdles, requiring unanimous approval from all member states.

  • Publication of Commission’s proposal to revise the Tobacco Excise Directive

    Publication of Commission’s proposal to revise the Tobacco Excise Directive

    PRESS RELEASE

    Niche traditional products and EU SMEs hit the most by new EU Commission’s proposal

    On 16 July 2025, the European Commission unveiled a proposal to revise the Tobacco Excise Directive. While the proposal is meant to tackle the developments and emergence of new products (e-cigarettes, heated tobacco products and new products containing nicotine), the European Commission also decided to revise the EU minimum rates applicable to traditional tobacco products. It disregards the different tax-bearing capacity of niche products from mass-produced tobacco and nicotine products demonstrating a misunderstanding of the market.

    Current EU minimum2025 proposed ratesIncrease
    Cigarettes90e / 1000 units215e / 1000 units139 %
    Roll-your-own tobacco60e / kg215e / kg258 %
    Cigars/cigarillos12e / 1000 units or kg143e / 1000 units or kg1092 %
    OROR
    5% ad valorem40% ad valorem700 %
    Other smoking tobacco22e / kg143e / kg550 %
    Waterpipe tobacco22e / kg107e / kg386 %
    Nicotine pouchesN/A143e / kg–
    Heated tobaccoN/A108 e / 1000 units OR155e / kg–
    E-liquids with more than 15mg of nicotine / mlN/A0.36e / ml of liquid–
    E-liquids with up to 15mg of nicotine / mlN/A0.12e / ml of liquid–

    Paul Varakas, Director General of the European Cigar Manufacturers Association:

    “Increasing the EU minimum rate by 1100% for niche products which are already the least affordable on the tobacco and nicotine market, is out of touch and completely irresponsible. 

    Cigars/cigarillos have always benefited from a differentiated tax rate due to their substantial manufacturing costs and differences. The emergence of new products on the market should not change this fact. Cigars/cigarillos should not be lumped in with new nicotine products. They have different consumption patterns and different groups of consumers.

    This proposal is very worrying. It goes against every commitment the EU Executive has made recently regarding reducing the regulatory burdens for SMEs and midcaps, companies that are largely dominating the cigar/cigarillo segment, as opposed to other products manufactured by Big Tobacco. 

    We urge Member States to reconsider some of the proposed measures so as to not severely hit EU SME and midcaps competitiveness and sustainability.”. 

    The Association is composed of the following companies: Arnold André, Burger Söhne, Canariense de Tabacos, Casa 1910, Continental Tobacco Corporation, Corita Cigars, Dannemann, De Olifant, Empresa Madeirense de Tabacos, Fabrica de Tabaco Micaelense, Gesinta, Joh. Wilh. Von Eicken GmbH, Kaliman Caribe, Oettinger Davidoff, Maya Selva, Manifatture Sigaro Toscano, Meerapfel companies, Moderno Opificio del Sigaro Italiano, My&Mi, Ritmeester Cigars, Scandinavian Tobacco Group, Tabacalera S.L.U., TOR – The New World Cigars Distributor, Vandermarliere Cigar Family, Villiger Söhne and Wörmann & Scholle.

    Contact: Paul Varakas, paul.varakas@ecma.eu, www.ecma.eu

  • EU’s Plan to Tax Tobacco, Large Companies Continues

    EU’s Plan to Tax Tobacco, Large Companies Continues

    Last week, Euractiv reported reviewing a document where the European Commission was pushing for new taxes on tobacco, large corporations, electronics waste, and carbon emissions, to help fund its next long-term budget (2028–2034). This week, more details and context are emerging.

    With the costs of most everything increasing, and the fact that the EU needs to begin repayment of €650 billion in Covid recovery loans starting in 2028, Euractiv said the EU needs new income sources beyond traditional gross national income-based contributions, which fund 56% of the current budget.

    The reported plan includes a Tobacco Excise Duty Own Resource (TEDOR), expected to bring in major revenue while supporting public health goals. Previous reports suggest the Commission has floated a 139% tax hike on cigarettes. Other proposed revenue sources include a Corporate Resource for Europe (CORE) for firms with over €50 million turnover, and green taxes like carbon levies (ETS1, CBAM) and electronics waste contributions.

    All 27 member states must approve the plan unanimously, making negotiations politically complex. However, the Commission views the next Multiannual Financial Framework (MFF) as a critical moment to secure the bloc’s economic, environmental, and defense goals.

  • EU Considers Tobacco Tax as New, Long-Term Revenue Stream

    EU Considers Tobacco Tax as New, Long-Term Revenue Stream

    The European Commission is exploring a potential EU-wide tobacco levy to help fund its next long-term budget, according to a German government report seen by Euractiv. The idea, still in early stages, could become a new source of “own resources” for the EU alongside member state contributions and customs duties.

    The proposal, which also mentions a possible levy on electronic waste, comes amid rising EU spending priorities such as defense. Tax Commissioner Wopke Hoekstra has been pushing for higher tobacco excise taxes, and a leaked draft suggests a potential 139% hike on cigarettes.

    While EU countries already apply tobacco taxes, the Commission may consider a separate levy that funnels revenue directly into the EU budget. However, any revision to the Tobacco Excise Tax Directive (TED) would require unanimous approval from all member states—some of which, including Greece and Romania, strongly oppose changes.

    The tobacco industry has warned such measures could backfire, fueling black market activity and reducing national revenues. An official proposal on the TED revision is expected this fall.

  • EU Trying to Stop “Tobacco Tourism”

    EU Trying to Stop “Tobacco Tourism”

    As the European Commission considers sweeping tobacco tax reform aimed at narrowing price gaps across the continent, high-income countries like Luxembourg would be hit hardest, RTL Today, Luxembourg’s main television channel, reported. The reform would be meant to deliver a major blow to “tobacco tourism.”

    Most of Luxembourg’s €1.4 billion in 2024 tobacco tax revenue came from foreign buyers, with less than 5% of the tobacco sold in the nation consumed locally. Currently, packs of cigarettes in Luxembourg cost less than €6, far below prices in neighboring France (€13) and the Netherlands (€10), attracting cross-border shoppers and smugglers.

    Though not yet formalized, the WHO’s calls for price hikes on harmful products by 2035 would raise Luxembourg’s prices €3.50 per pack of cigarettes, or 60%. RTL Today said Luxembourg’s Finance Ministry is monitoring the situation.

  • Irish PM Says Big Tobacco Using Old Playbook for Vape

    Irish PM Says Big Tobacco Using Old Playbook for Vape

    Speaking at the World Conference on Tobacco Control, Irish Prime Minister Micheál Martin urged governments worldwide to adopt “the strongest possible measures against vaping,” warning that e-cigarette manufacturers are replicating the “predatory playbook” of the traditional tobacco industry—particularly by targeting youth.

    “All the same issues we had to deal with in respect of cigarettes, we have to deal with vaping,” said Martin. “We’re catching up a bit later in Ireland with that.”

    Ireland’s new restrictions on flavorings, product placement, and packaging design are scheduled to be enforced in February 2026, based on legislation introduced by the previous government. Youth vaping is accelerating across Europe—10.8% of adolescents aged 13–15 now use some form of tobacco, including e-cigarettes.

    The rise in youth vaping spurred the European Commission to update its Recommendation on Smoke-Free Environments to explicitly include vapes and heated tobacco products, urging member states to ban vaping wherever smoking is prohibited, and is now further considering flavor bans, restrictions on online sales, and heavier taxation.

  • EU Weighs Major Tobacco Tax Overhaul

    EU Weighs Major Tobacco Tax Overhaul

    The European Commission is preparing a sweeping reform of the Tobacco Excise Tax Directive (TED), targeting a sharp increase in taxes on traditional cigarettes and rolling tobacco, with more modest hikes planned for alternative products like heated tobacco and e-cigarettes, according to an internal working document seen by Euractiv.

    Key Highlights from the Draft Proposal:

    • Cigarette Tax: Proposed increase of 139%, from €90 to €215 per 1,000 units.
    • Rolling Tobacco: Tax hike of 258%, from €60/kg to €215/kg, aligning its burden with cigarettes.
    • Cigars & Cigarillos: Massive proposed increase of 1,090%, to €143/1,000 units or per kg.
    • Shisha/Waterpipe Tobacco: Proposed at €107/kg.
    • Nicotine Pouches: Suggested tax of €143/kg.
    • E-Cigarettes: Tax based on nicotine strength:
      • >15mg/ml: €0.36/ml
      • ≤15mg/ml: €0.12/ml
    • Heated Tobacco:
      • Unit-based: €108/1,000 units
      • Weight-based: €155/kg
      • Roughly 50% lower tax burden compared to cigarettes

    Policy Context & Challenges:

    • A 15-country coalition, led by France and the Netherlands, is urging stronger EU-wide tobacco controls, including taxation on emerging nicotine products.
    • The Commission says the current rules are “no longer fit for purpose.”
    • However, changes to the TED require unanimous support from all EU member states — a high bar amid diverging national interests.
    • Italy, Greece, and Romania have objected to treating alternative products (like heated tobacco) the same as combustible cigarettes, citing harm reduction arguments
  • EU Sees Highest Rate of Illicit Cigarettes Since 2015

    EU Sees Highest Rate of Illicit Cigarettes Since 2015

    According to the 2024 KPMG study, produced annually and commissioned by Philip Morris Products SA, smokers in the European Union consumed 38.9 billion illicit cigarettes in 2024, a 10.8% increase versus 2023, the highest level since 2015. That number accounts for 9.2% of total cigarette consumption, with governments losing as much as €14.9 billion in tax revenues at a time when many countries face intense economic pressures and rising black markets.

    PMI called for effective policymaking to counter the growing threat of illicit trade, and said it believes that steep and abrupt tax increases are exacerbating the issue and benefitting criminals who supply unregulated, untaxed, and inferior products. To combat this growing threat, PMI urges the adoption of evidence-based regulation with balanced and predictable taxation through tax calendars, continued public-private collaboration, and enhanced support of regional and national law enforcement agencies.

    “The illicit tobacco trade threatens the European economy, public health, security, and social stability; today, higher-taxed and higher-priced markets such as France and the Netherlands are especially impacted by illegally imported and counterfeit goods,” said Christos Harpantidis, PMI’s Senior Vice President, External Affairs. “Its massive socioeconomic impact negatively affects tax collection, job creation, and legitimate businesses, the engine of our European economies. The availability of cheap, unregulated cigarettes in the underground economy also impairs efforts to reduce smoking rates and achieve a smoke-free future.”

    France has the largest illicit market in Europe, reaching 18.7 billion illicit cigarettes consumed last year, 37.6% of total consumption. The Netherlands saw the largest increase in illicit cigarettes, which doubled to 17.9% of total consumption.

    A detailed overview of the results, country profiles, and methodology of the KPMG study is available here.

  • Report: Black Marketeers Continue to Evolve with Technology

    Report: Black Marketeers Continue to Evolve with Technology

    Tobacco smugglers and black marketeers are increasingly using technologies such as social media and drones to deliver cigarettes to smokers in Europe and avoid law enforcers, a report found.

    According to the 2024 KPMG study, produced annually and commissioned by Philip Morris Products SA, the illegal networks’ flexible strategies have helped illicit consumption increase 10.8% in the EU from 2023, with criminal groups shifting toward smuggling smaller packages, more often, via budget airlines, railways, and drones. They are also increasingly bypassing physical stores to sell directly to consumers on social media.

    The report showed that criminal groups are holding less inventory, which is reflected in a decrease in the size of illicit cigarette seizures as the gangs mitigate their risks and reduce the impact of raids by law enforcers. The more recent change in tactics follows another shift from 2020, when the groups moved production closer to end-markets, partly in response to the pandemic disruption, and also reducing the chance of detection.

  • Bulgarian Vape Ban Pending EU Approval

    Bulgarian Vape Ban Pending EU Approval

    The ban on vaping in Bulgaria is set to be enforced, but only after receiving the green light from Brussels. This emerged following the meeting of the parliamentary Committee on Economic Policy and Innovation, which discussed the second reading of amendments to the Law on Tobacco, Tobacco and Related Products.

    The bill, proposed by Kostadin Angelov from GERB (Citizens for European Development of Bulgaria) in February, calls for a full ban on the sale, use, and advertisement of vaping products, as well as energy drinks targeted at minors, according to the Bulgarian News Agency.

    Petar Kanev, chair of the Committee and member of the Bulgarian Socialist Party Parliamentary Group – United Left, described the legislation as one of the most anticipated in recent times. In February, the parliament approved the bill at the first reading with overwhelming support, gathering 197 votes in favor.

    During the committee session, members discussed the timeline for the bill’s enforcement, taking into account the requirement to notify the European Commission about specific provisions. They agreed that while the draft would proceed to the second reading in parliament, it would not come into effect until formal notification from Brussels is obtained.