Tag: European Commission

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.

July 9, 2025
Europe OKs French Ban on Disposables

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The European Commission on Sept. 25 approved France’s bid to ban disposable vapes, reports the Connexion.
France started the process of banning single-use e-cigarettes in December 2023, citing concerns about youth uptake and environmental pollution. Disposable vapes contain microplastics and chemical substances and are generally powered by nonrechargeable, nonrecyclable lithium batteries.
The National Assembly’s proposed ban gained approval in the French Senate in February 2024.
Europe’s validation was the final step in making the ban possible.
“This is a great victory for the environment and for the health of our children, who are the main targets of these marketing campaigns,” Francesca Pasquini, co-writer of the bill, was quoted as saying.
Lawmakers have yet to determine when the legislation will take force. The next step is for senators to vote definitively on a ban before it is formally put into effect.
France will be joining Belgium, where the sale of disposable vapes will be illegal from Jan. 1, 2025.
According to an investigation by the French anti-smoking federation ACT, 15 percent of teenagers aged between 13 and 16 have used e-cigarettes.

September 30, 2024
‘Commission Too Receptive to Lobbying’

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The European Commission is inappropriately receptive to tobacco lobbying, according to a white paper scheduled to be presented on April 11, reports Europorter.
Concerned about the slow progress toward the EU goal of creating “tobacco-free generation” and the union’s inaction on its 2011 tobacco taxation directive and its 2014 tobacco products directive, which are due for revision, several European deputes and public health associations have studied the interactions between industry and EU public office holders.
The discussions were led by Michèle Rivasi, Anne-Sophie Pelletier and Pierre Larrouturou, with the participation of Smoke-Free Partnership, Alliance Against Tobacco, the University of Bath and Corporate Europe Observatory, among other health groups.
The themes discussed included the parallel tobacco trade, the “Dentsu Tracking/Jan Hoffmann” traceability controversy, tobacco lobbying efforts and tobacco’s environmental impact.
The white paper summarizing the working group’s findings will be distributed in French and English to the 27 member states, the Commission, political groups, along with lawmakers and members of the press.

April 10, 2024
EU Tracking System Under Fire in Panama

Photo: Tobacco Reporter archive

During the meeting in Panama of the parties to the Protocol to Eliminate Illicit Trade in Tobacco Products (MOP3), European Member of Parliament Anne-Sophie Pelletier today expressed her concerns about the shortcomings of the European tobacco product tracing system.
According to Pelletier, the Dentsu tracking system fails to comply with World Health Organization protocol—which the EU ratified in 2016—in part due to its association with the tobacco business.
Dentsu’s system is split between IT firms that operate information-tracking databases on those codes for individual manufacturers and importers, and an overarching level that gathers all that data into a “secondary data repository.” At the end of 2018, Dentsu Tracking, a subsidiary of Japan’s Dentsu Group, was awarded a contract to operate this secondary repository.
During a debate in Brussels on Feb. 8, European lawmakers highlighted the inefficiency of the European tobacco product tracing system, with several member states lamenting an increase in the level of tobacco parallel trade since its implementation in 2019.
Furthermore, European parliamentarians questioned the choice of Dentsu Tracking as the provider, and that company’s recruitment of Jan Hoffmann, a former official of the EU’s Directorate-General for Health and Food Safety (DG Sante), as director of its regulatory affairs and compliance division.
Dentsu has denied that Hoffman had any part in either awarding the contract to the company during his stint at DG Sante, or that he is using his Commission contacts to help the company in any way. “His hiring at Dentsu was carried out in full compliance with all applicable laws and regulations,” Dentsu Tracking’s CEO Philippe Castella was quoted as saying by Politico in 2023.

February 13, 2024
EU: Tobacco Meetings are Transparent

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The European Commission insists it has sound transparency measures in place, despite EU Ombudsman Emily O’Reilly’s findings of maladministration in an inquiry of the Commission’s interactions with representatives of the tobacco industry.
“The Commission has been uncompromising in delivering the highest standards of transparency—on who we meet and who seeks to influence us,” a Commission spokesperson told Euractiv.
In December, O’Reilly concluded that the Commission had failed to “ensure a comprehensive approach across all its departments to transparency of meetings with representatives of the tobacco industry,” including “failure to ensure a systematic assessment, across all directorates-general, as to whether potential meetings are needed with representatives of the tobacco industry.”
Article 5.3 of the World Health Organization’s Framework Convention on Tobacco Control instructs parties, such as the EU, to protect public health polices from the tobacco industry’s commercial and other vested interests.
Despite the finding, the Commission spokesperson insisted that there is a “very solid baseline consisting of horizontal rules on ethics and integrity for Commission staff.”
Tobacco Europe, an industry organization, confirmed that it is difficult for tobacco lobbyists to arrange meetings with the Commission in any directorate-general. Its director of EU affairs, Nathalie Darge, said that FCTCs Article 5(3) is often “misinterpreted” and used as an excuse not to meet industry representatives.

February 2, 2024
Activists Lament EU Stance on THR

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The European Commission’s approach to tobacco harm reduction is out of touch with EU citizens’ views, according to the World Vapers’ Alliance (WVA)
A recent public consultation on the EU Tobacco Products Directive (TPD), analyzed by Snusforumet, reveals a substantial consensus among citizens, NGOs and scientific institutions on the effectiveness of harm-reduction products in assisting smokers to quit.
A striking 77 percent of respondents recognize these products as helpful smoking cessation tools, while a mere 9 percent of EU citizens disagree. Furthermore, an overwhelming 82 percent of respondents refute the notion that new nicotine alternatives pose a risk to public health, with only 6 percent perceiving them as a threat.
“The EU Commission’s current stance on harm reduction is not just out of touch; it’s a blatant disregard for consumer opinions and scientific evidence,” said WVA Director Michael Landl in a statement. “It’s high time the Commission responds to the reality that harm-reduction products are not the enemy but a vital ally in the fight against smoking.”
According to the WVA, countries like Sweden serve as living proof of the success of a consumer-friendly harm reduction approach, significantly outpacing the EU in reducing smoking rates. The EU Commission’s reluctance to embrace this approach is not only perplexing but also detrimental to public health efforts, the organization says.
“Sweden’s success story is a testament to what can be achieved with a sensible harm reduction policy,” said Landl. “It’s baffling and frankly irresponsible for the EU Commission to continue its hostile approach towards these life-saving products. The Commission needs to align its policies with the clear evidence and public opinion, rather than clinging to outdated and ineffective methods.”

January 15, 2024
EU Commission Vows Tobacco Lobby Probe

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The European Commission said it would investigate the extent of its exposure to tobacco industry influence, following complaints about its inconsistent approach to tobacco lobbyists, reports Politico.
In April, European Ombudsman Emily O’Reilly noted that the heightened controls and transparency requirements applied by the Commission departments in charge of health and customs policies are not necessarily implemented by other directorates-general.
O’Reilly’s inquiry found that tobacco industry representatives met with officials from Commission departments in charge of agriculture, climate action, environment, trade, the internal market, among others. Minutes were often nonexistent of lacking detail.
Article 5.3 of the World Health Organization’s Framework Convention on Tobacco Control instructs parties to protect public health polices from the tobacco industry’s commercial and other vested interests.
The tobacco industry insists the Commission already applies this FCTC provision too broadly, noting that Article 5.3 does not prohibit discussions or engagement outright.

December 25, 2023
HTPs: EU Rulemaking Challenged in Court

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The European Commission will face a legal challenge over its attempt to restrict the sale of heated tobacco products (HTPs).
On Nov. 3, 2022, the European Union published a directive banning flavored HTPs throughout the union. The ban, which covers all flavors except tobacco, officially took effect Nov. 23, 2022. EU member states were given until July 23, 2023, to transpose the rule into national legislation.
When the Ireland did so, it was challenged in the Irish High Court by PJ Carroll & Co. and Nicoventures Trading. The nicotine companies argued that the European Commission had exceeded the powers delegated to it under tobacco products legislation approved by the European Council and the European Parliament. According to them, the Commission made its decision based on political grounds rather than legal grounds.
In his judgment, Irish High Court Justice Cian Ferriter noted that the Commission had effectively prohibited “a category of tobacco product which was new on the market, which had not been in existence at the time of the enactment of the Tobacco Products Directive in 2014 and which had not been the subject of separate policy and health assessments…”.
“It is at least arguable that this involved a political choice which was only open to the EU legislature and not to the Commission,” Ferriter said.
According to Eureporter, the Dublin court will now refer the case to the European Court of Justice in Luxembourg.
The nicotine companies and the Irish High Court are not the first to raise concerns about regulatory overreach. When the Commission adopted its directive in 2022, four EU member states objected that the directive involved “essential elements reserved for the European legislators.”

October 18, 2023
EU Commission Chided Over Tobacco Contacts

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The European Commission’s failure to be fully transparent about its meetings with tobacco industry representatives constitutes maladministration, according to the European Ombudsman, reports Reuters. Such transparency is required by the World Health Organization Framework Convention on Tobacco Control.
In a letter to the commission, ombudswoman Emily O’Reilly detailed preliminary conclusions from her office’s inquiry into EU executive contacts with the tobacco industry in 2020 and 2021. The investigation follows an earlier study concluded in 2016, when the ombudsman urged the commission to adopt the transparency policy of the EU health and food safety directorate-general. Apart from improvements at the tax and customs unit, this had not happened, the letter noted.
The ombudsman found a deficiency in record-keeping and a failure to keep and make available minutes on all commission meetings with tobacco interest representatives.
The ombudsman also questioned whether commission officials were limiting their interactions with the tobacco industry only to those that were “strictly necessary.”
EU institution contacts with lobbyists have come under scrutiny after a cash-for-influence scandal hit the European Parliament, two of whose members have been charged with corruption and money laundering in Belgium.
The ombudsman’s recommendations are not legally binding.

April 18, 2023
A Blunt Tool

Photo: MichaelJBerlin

Unless properly structured, Europe’s tobacco and vapor tax plans may not achieve their public health objectives.
By Stefanie Rossel
The European Commission’s (EC) December 2022 proposal for an update to the 2011 EU tobacco excise directive came with a first: In addition to a significant hike in cigarette excise rates, the draft also calls for a bloc-wide vaping levy.
According to the proposal, the current minimum EU excise tax rate of €1.80 ($1.92) should increase to €3.60 per pack of 20 cigarettes. This would double excise duties in member states with low cigarette taxes (in eastern European countries, a pack of cigarettes can currently sell for under €3) and affect excise duties in countries such as Luxembourg and Austria, where cigarette prices are low relative to income. The EU hopes to generate an additional €9.3 billion in revenue from the tax harmonization, which would be a welcome windfall for pandemic-struck and inflation-struck member states. If enacted, the proposal would also increase taxes on hand-rolled tobacco.
E-cigarettes with less than 15 mg of nicotine per milliliter of liquid would attract a 20 percent excise duty, and stronger products would be subject to a duty of at least 40 percent. In the EU, nicotine content of e-liquids is limited to 20 mg per milliliter. According to the draft proposal, heated-tobacco products (HTPs) would attract a 55 percent excise duty, or a tax of €91 per 1,000 items sold.
The proposed legislation would harmonize the fragmented EU vapor market, where each member state taxes vapor and HTP products at its own rates. It is part of a push aimed at accelerating the reduction of smoking rates throughout the EU. As part of the common market’s Beating Cancer Plan, introduced by the EC in February 2021, health officials seek to lower the current EU smoking prevalence of 26 percent to 20 percent by 2025 and achieve a “tobacco-free generation”—that is, a smoking rate of below 5 percent—by 2040.
The draft was released only weeks after the EC imposed a ban on flavored HTPs to cut the growth in demand among younger consumers. Responses were mixed. While some argued that union-wide taxes are necessary because less harmful products still present risk, tobacco harm reduction advocates warned for unintended consequences.

Too High, Too Complex

David Sweanor
“Simply increasing cigarette taxes is a blunt instrument when trying to reduce the health toll from cigarette smoking,” says David Sweanor, adjunct professor of law at the University of Ottawa in Canada. “It is far more powerful than other standard anti-smoking measures but has limitations and constraints that are often overlooked. Price sensitivity is real, but many people who smoke cigarettes will seek to deal with increased costs through access to contraband, the cross-border trade, simply changing the way they smoke without achieving health improvements, or further diminishing their overall well-being by redirecting expenditures from healthier purchases to the purchase of cigarettes.”
Taxing low-risk alternatives reduces the incentive to switch from cigarettes and can make illicit cigarettes more competitive, according to Sweanor. In his view, it is akin to making alcoholics who give up drinking by taking up jogging pay a tax on running shoes. “It misses the point of how taxes can be justified due to the relative health impact of certain behaviors,” he says.
Dustin Dahlmann
Dustin Dahlmann, president of the Independent European Vape Alliance, believes that EU policy should be guided by scientific evidence. “Science around the world agrees that vaping is significantly less harmful than smoking,” he says. “E-cigarette taxes that are too high [to] prevent socially disadvantaged groups in particular from switching to e-cigarettes. In the first instance, there should not be excise duties for electronic cigarettes, as they are a means for smokers to switch to less harmful alternatives. If further harmonization of excise duties is considered, legislators should take into account the significant differences in risk profile between tobacco cigarettes and electronic cigarettes and apply the excise duties methodology accordingly, i.e., proportionality to the harm reduction benefits brought about by tobacco replacement products.”
In practice, this would mean a maximum excise duty of €1 per 10 mL or €0.10 per 1 mL of e-liquid, and it should be applied only to e-liquids with nicotine, according to Dahlmann. “The EU draft imposes a combination of an ad valorem and a specific volume base excise that would be an administrative burden for small and medium enterprises and fiscal authorities due to the additional complexity. Giving two options will lead to uncertainty, defeating the purpose of a harmonization of excise rates.”

Illicit Trade Could Increase

The question about how the EU’s revised tobacco tax directive would impact the illicit cigarette market is justified. The experience of France provides a cautionary tale. Following a tax increase of almost three times the EC’s minimum level, the illicit market in that country more than doubled, from 13.7 percent in 2017 to 29.4 percent in 2021, leading to an estimated loss of €6.2 billion in tax revenues in 2021, according to a KPMG report. In general, the study found, illicit consumption in the EU increased by 3.9 percent, or 1.3 billion cigarettes, in 2021, which corresponds to a loss of €10.4 billion in taxes.
How the suggested excise duty increase would impact markets with relatively low income and high smoking levels, such as Greece (42 percent smoking prevalence) and Bulgaria (38 percent), is anybody’s guess. “I have worked globally on illicit trade issues for decades,” says Sweanor. “There is much we can do to limit the trade, but the economics makes [illicit cigarette trade] so lucrative that it is hard to imagine bringing it under control so long as there remains a significant market for cigarettes. Markets meet needs, including illicitly. Cigarettes are extraordinarily inexpensive to make, and taxes and the huge profit margins of Big Tobacco create a business opportunity many people can be expected to see as a money spinner. The real answer is to facilitate disruptive technology that makes cigarettes as undesirable to consumers as unsanitary food or leaded petrol.”
To achieve the latter, the EC would have to acknowledge the harm reduction and smoking cessation potential of novel tobacco products. In February 2022, the EU Parliament became the world’s first elected chamber to endorse THR when it adopted a resolution on cancer prevention and treatment that notes that e-cigarettes “could allow some smokers to progressively quit smoking.” Dahlmann praised the move as a “landmark declaration” that would help reassure smokers of the benefits of switching to vaping. “All other EU institutions—and in particular the European Commission—should take this on board and ensure that policy follows science, not the other way around,” he said at the time.
Sweanor is less upbeat. “The taxation of low-risk products reflects an understanding of differential risks. But it fails to come to terms with the full magnitude of the harm from cigarette smoking and the enormous potential to dramatically reduce it. When we are looking at hundreds of thousands of annual deaths, surely it is a public health emergency—and policies should reflect that. Language such as “could allow some smokers…” and policies that limit the relative acceptability of low-risk alternatives indicate that the extent of the public health opportunity is not fully grasped.”

Differentiated Approach Required

Whether the EU is prepared to part ways with anti-novel nicotine product sentiment of the World Health Organization Framework Convention on Tobacco Control (FCTC), which the common market has ratified, remains to be seen.
“The EU is obligated to support tobacco harm reduction as a signatory to the WHO’s FCTC as stipulated in the introduction, article 1 (d) of the treaty,” says Dahlmann. “The FCTC requires the EU to not only allow reduced-risk products but to actively promote them. However, this definition is not actively supported by the WHO. The rule here is much more ‘quit or die.’”
“The WHO’s FCTC process has followed in the footsteps of narcotics protocols in being hijacked by ideologues who seek an abstinence-only approach on drugs where total abstinence is simply not a viable nor a humane goal,” Sweanor adds. “As with those narcotics protocols, caring governments that follow the Enlightenment principles of science, reason and humanism will either creatively skirt such guidelines or simply ignore them. This is something we are now seeing unfolding globally with cannabis policies.”
The goal of the new tax directive to create a smoke-free European society, he says, is noble and achievable—and far more quickly than envisioned in that 2040 goal. “But it requires bold rather than tentative steps. Policymakers should act in ways consistent with cigarette smoking being a public health crisis of enormous importance,” says Sweanor. “The best way to tackle this is by use of cross-elasticities, of empowering and facilitating people who smoke cigarettes to make healthier choices. This is accomplished by measures such as the widest possible cost differential between lethal cigarettes and low-risk alternatives. Given the horrendous death and disease tool from cigarettes, this should be a huge priority.”
“E-cigarettes need to remain accessible and affordable to smokers from all socioeconomic backgrounds who wish to quit smoking,” says Dahlmann. “E-cigarettes offer smokers an alternative that is 95 percent less harmful than smoking. Switching from tobacco to vapor has positive individual, social and economic implications and should be encouraged, not penalized by the tax system. If taxes make vaping more expensive than smoking, many smokers will lose an incentive to switch to the much less harmful alternative. We therefore would see no chance of achieving the EU’s ambitious goals.”
Before it is enshrined in law, the proposal will have to be agreed on by all EU member states. BAT already noted that this is merely the beginning of a long legislative process. “I assume there will be amendments, but we do not yet know their likely nature,” says Sweanor. “The proposal could be changed to help facilitate a rapid public health breakthrough as people abandon lethal cigarettes in huge numbers. Or it could be amended to make that a pipe dream.”

Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

February 1, 2023