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At the Global Tobacco and Nicotine Forum (GTNF) in Brussels, a panel moderated by Tim Phillips, Managing Director of Tamarind Intelligence, explored how taxation and tariffs are shaping the future of nicotine products in a rapidly evolving market. Speakers included Christa Pelsers (BAT), Stefano Santi (Philip Morris International), and Maria Angelova (Socotab Frana SA).

In “It’s All About Tax — The Complex World of Excise and Tariffs,” Phillips opened by stressing that “the next few years are going to be vitally important,” as novel products—from vapes to nicotine pouches—continue to disrupt markets. “We’re seeing massive problems around illicit trade and tax collection,” he said, noting that in some countries, “more than half of the market may already be illicit.” The result, he warned, is a growing gap between regulatory intentions and market realities.

Pelsers highlighted the speed of innovation and the challenges it creates for regulators. “For years, there was no innovation in tobacco, and now we have an explosion of new products—governments are still trying to catch up,” she said. Pelsers argued that taxation must be based on science, not politics, and criticized the European Commission’s fragmented approach: “The Commission is proposing that every member state can adjust its own rates. That makes things even more complex. We need harmonization to ensure fairness and functionality in the single market.”

She also warned of geopolitical shifts impacting trade. “With U.S. tariffs, China is redirecting exports elsewhere. The EU’s response has been slow. The next few years will reshape who we trust as trading partners,” she said. “And if tax rates are set too high, it will be detrimental to innovation.”

Santi emphasized that excise tax policy should not only collect revenue but also guide consumers toward less harmful products. “Ten years ago, my job was complexity five; now it’s fifty,” he said. “We need to balance taxation in a way that shifts the market without driving consumers to the black market.” He endorsed differentiated tax levels for different product types, saying, “If you raise taxes too fast, consumers will find cheaper, often illicit alternatives.”

Santi called for leveraging member state experience to modernize EU tax policy and harmonize definitions. “The directive is a good start, but it’s lagging behind. Treating all products the same is a recipe for failure. Europe needs to protect its economic and manufacturing footprint.”

Angelova added a perspective from the leaf tobacco sector, calling taxation “one of the quiet architects of humanity.” She warned that poorly designed taxes could devastate rural livelihoods. “Tobacco is an agricultural product that supports families. Nowhere else in the world is raw tobacco subject to excise tax,” she said. “Making local tobacco less affordable than imported tobacco doesn’t help anyone.”

Angelova stressed the importance of practical implementation: “It’s not just about what we tax—it’s about how. Details make the difference. Track and trace systems are vital to ensure transparency and prevent unfair competition.”

She concluded by urging policymakers to proceed with caution: “We’re trying to solve too many problems at once. We need to start addressing them one by one. Europe still has many families who rely on tobacco farming. Consumers won’t forget how we handle this.”

The panel collectively underscored that while excise and tariff reforms are inevitable, their success will depend on nuance, balance, and genuine collaboration with industry to avoid unintended economic and public health consequences.