TobaccoReporter logo

Tag: commission

  • Gap Growing Between EU’s Public-Health Ambitions, Economic Concerns

    Gap Growing Between EU’s Public-Health Ambitions, Economic Concerns

    The European Commission’s plan to overhaul the EU’s tobacco taxation directive has met resistance from numerous Member States, revealing deep divisions over how far and how fast the bloc should go in taxing nicotine products. The proposal, first unveiled on July 16 and discussed for the first time at the Ecofin Council in Luxembourg last week, would sharply raise minimum excise duties on cigarettes and extend taxation to new categories such as vaping and heated tobacco.

    Commissioner for Climate and Clean Growth Wopke Hoekstra defended the reform as long overdue. “Europe ranks among the highest in the world for the number of smokers,” he said. “Moreover, there are new products deliberately designed for young people, 15-year-olds, which create a new addiction to nicotine. We cannot allow the industry to reverse the narrative, spreading lies as it has already done with traditional cigarettes.”

    Under the Commission’s plan, the minimum duty on cigarettes would rise from 60% to 63% of the weighted average retail price (WAP) and from €90 to €215 per 1,000 pieces. Rolling tobacco would see its threshold climb from 50% to 62% of WAP and from €60 to €215 per kilo. The reform also introduces EU-wide minimum rates for heated tobacco and e-cigarettes, starting in 2028 at 45% of WAP or €88 per 1,000 pieces and increasing through 2032.

    While most governments support the goal of improving public health, at least 12 Member States voiced objections. Italy, Bulgaria, and Romania warned that higher taxes on traditional cigarettes could fuel illicit trade. “We have to examine the interaction between increased tax thresholds and the trafficking of illegal cigarettes,” said Italy’s economy minister Giancarlo Giorgetti.

    Croatia, Greece, Luxembourg, Malta, the Czech Republic, Slovakia, and Hungary described the proposed thresholds as too high. Hungary fears for its cigarillo sector, while Luxembourg rejects the Commission’s plan for automatic adjustments based on purchasing power.

    Sweden and Finland objected to taxing snus, with Swedish finance minister Elisabeth Svantesson insisting that “taxes should reflect the degree of harm, not the product type.”

  • Europe Risks Becoming Another Australia, BAT Boss Says

    Europe Risks Becoming Another Australia, BAT Boss Says

    Kingsley Wheaton, BAT’s Chief Commercial Officer, warned that Europe’s planned sharp tax hikes on cigarettes and alternative nicotine products risk fueling illicit trade similar to the crisis that has been created in Australia. Similar to his remarks last week at GTNF 2025 in Brussels, Wheaton told Euractiv that high excise taxes and strict regulations have pushed 80% of Australia’s tobacco market underground, resulting in taxpayer losses of AUD 9 billion ($5.9 billion) since 2019 and flourishing organized crime responsible for extortion, fire bombings, and murder.

    The warning comes as the European Commission pursues a revision of the Excise Tax Directive, proposing a 139% increase in cigarette taxes and steep rises for e-cigarettes, heated tobacco, and nicotine pouches. The EU aims to become smoke-free by 2040, targeting tobacco and nicotine consumption below 5%. While BAT acknowledges that smokeless products are not risk-free, Wheaton argued they are far less harmful than smoking and should remain accessible and affordable even as cigarette prices rise.

    Wheaton urged policymakers to focus on progressively taxing cigarettes while maintaining access to safer nicotine alternatives, alongside responsible packaging, retail licensing, and nicotine ceilings, however, the Commission continues to repeatedly reject any warning that comes from cigarette-producing companies.

  • Fifteen EU Members Pushing for Excise Hikes on Tobacco

    Fifteen EU Members Pushing for Excise Hikes on Tobacco

    A majority of EU member states have called for the European Commission to press ahead with a long-delayed plan to tax vapes and raise minimum excise rates on cigarettes and cigars, according to Financial Times. The letter—signed by Austria, Belgium, Bulgaria, Czechia, Denmark, Estonia, Finland, France, Germany, Ireland, Latvia, The Netherlands, Slovakia, Slovenia, and Spain—called on the Commission to take “without delay the necessary steps” to update the directive.

    The Tobacco Excise Tax Directive (TED) was controversially left out of the Commission’s 2025 work program, though some states have been pushing for higher taxes on both tobacco and alternative products such as e-cigarettes, heated tobacco, and nicotine pouches. Unlike traditional tobacco, alternative products still lack an EU-wide excise framework. Euractiv reported last week that the EU commissioner in charge of taxation, Wopke Hoekstra, was testing the waters for such an initiative.

    “They want her to unblock the proposal, which is yet to be adopted by the commission and would, for the first time, set minimum taxation rates for vapes, nicotine pouches and heated tobacco,” Paola Tamma and Andy Bounds wrote for Financial Times. “It would also substantially raise minimum excise rates for cigarettes and cigars to harmonize taxation across the bloc and reduce tobacco fraud.”

    “The current scope and provisions of the directive are insufficient to enable member states to deal with the significant challenges posed by ongoing developments and trends in the European tobacco market, including the emergence of novel products,” the 15 EU finance and economy ministers wrote in the letter.

    Initially scheduled for 2022, the commission delayed the bill because of concerns about the impact that rising excise taxes could have at a time when inflation hit double digits across the bloc. Olaf, the European Anti-Fraud Office, estimates lost revenue from illicit tobacco to be more than €10 billion a year.

    The bill, however, requires unanimous approval. Twelve countries did not sign the letter, with Romania, Italy, and Greece among the most vocal opponents of revising the directive. A letter from the dissenting countries last month said they did not deem it necessary ‘‘to proceed…to a comprehensive revision of the overall EU legislation”. They also added that smoking rates are already falling. In a leaked version of the 2022 proposal, excise rates would have increased by 100% for cigarettes, 200% for rolling tobacco, and 900% for cigars and cigarillos.

    Paul Varakas, director of the European Cigar Manufacturers Association, said it was ‘‘out of touch and completely irresponsible in the context of an uncertain trade war.”

    An EU diplomat representing a southern state told Euractiv that high tobacco taxation in France and the Netherlands had resulted in black markets and increased cross-border shopping, with the diplomat accusing Paris and The Hague of pushing others to “repeat the same mistake”.