Tag: European Union

EU to Impose Tariffs on American Tobacco

Photo USTC
The EU is set to impose new tariffs on American tobacco this week.
In response to a fight over how much aid is given to airplane manufacturers, the EU had indicated about a month ago that it would seek approval from the World Trade Organization for retaliatory tariffs against the United States.
The new tariffs will include a 25 percent tax on American agricultural goods; on that list are “tobacco, nuts and seeds, spirits, sauces, soups and syrups, self-propelled shovel loaders, tractors and proteins,” according to The Wall Street Journal.
The EU is the world’s second-largest importer of U.S. tobacco.
Though the trade war has focused on aviation, American agriculture has been seen by the EU and by China as a particularly vulnerable sector to hit, both for its importance to the American economy and because farmers are generally seen as part of President Donald Trump’s base.
American tobacco farmers are already suffering from tariffs imposed by China as part of an ongoing trade dispute.
EU leaders are reportedly optimistic that President-Elect Joe Biden’s incoming administration will be more amenable to ending the trade wars than the current administration, but with American tariffs on European Airbus planes already in place, the EU felt it had no choice but to institute tariffs of its own.
November 11, 2020
PM: Irish Menthol Ad Was A Mistake

Peter Nixon, managing director of Philip Morris for the U.K. and Ireland.
Photo: Dave Parker
Philip Morris has told Irish retailers it made a mistake in labeling its new Marlboro Bright brand as a “menthol blend’ in a trade press advertisement, reports The Irish Times.

The company introduced Marlboro Bright after menthol cigarettes became illegal across the European Union on May 20. The new brand replaces the company’s old Marlboro Green cigarettes.

Writing in Retail News, Peter Nixon, the managing director of Philip Morris for the U.K. and Ireland, said the advertisement should not have run.

The ad for retailers had described Marlboro Bright as “the Marlboro menthol blend—without methylation.”

Nixon said “methylation” was a typo that should have read “without menthol.” He insisted Marlboro Bright is a traditional cigarette without menthol and thus in compliance with the ban.

Public health advocates have been watching the tobacco industry’s actions closely in the wake of the EU ban. Earlier, Japan Tobacco International (JTI) was criticized for continuing to use menthol during the manufacturing process of its Silk Cut Choice Green brand.

JTI insisted this is legal as long as the additive does not result in a characterizing smell or taste in the cigarettes other than tobacco.

The Health Service Executive is investigating if any tobacco companies are in breach of the menthol ban.

The Irish market for menthol cigarettes was worth €250 million ($282.82 million) prior to the ban.
June 23, 2020
Court Ordered to Reconsider Immunity in ‘Dalligate’

Photo: Csaba Deli | Dreamstime.com
Europe’s top court on June 18 sent back to a lower court a dispute over immunity in a political scandal involving Swedish smokeless tobacco and millions of dollars in bribes, reports Court House News Service.
The European Court of Justice (EJC) found that a lower court erred in its decision to side with the former head of the European Union’s anti-fraud office, Giovanni Kessler, whose immunity from prosecution had been rescinded by the European Commission following allegations of illegal wiretapping.
The case dates from 2012, when Maltese politician John Dalli either resigned from or was forced out of his post as the European commissioner for health and consumer policy following allegations of bribery.
An investigation by the EU anti-fraud office OLAF found that an associate of Dalli, Silvio Zammit had demanded €60 million ($67 million) from Swedish Match to lift a ban on snus, which is legal in Sweden but outlawed in other EU member states.
Dalli denied he had any knowledge of the bribe. He brought several complaints about his resignation controversy to the court in 2015, which he all lost.
During the OLAF probe, investigators allegedly listened in to a conversation with a witness in the investigation. The information wasn’t used in the investigation, but the actions would be a violation of Belgian wiretapping laws.
The case now returns to the General Court for another decision.
June 22, 2020
KPMG: EU Illicit Cigarette Market at Record Low
Photo: Tobacco Reporter archive
The European market for illicit cigarettes reached a record low in 2019, even as consumption of counterfeits continues to grow, according to a KPMG study commissioned by Philip Morris International (PMI).
In 2019, EU consumers purchased 38.9 billion illicit cigarettes—the lowest number since the KPMG study first took place in 2006. The figure represents represented 7.9 percent of total EU cigarette consumption, 0.7 percentage points less than in the previous year.
Despite the overall decline of illicit cigarette consumption, which continued for the seventh consecutive year, the consumption of counterfeit cigarettes continued to grow, reaching 7.6 billion, a 38.3 percent increase compared to 2018 and the highest level recorded to date.
“The continued decline of illicit tobacco trade in the EU is a positive development and reinforces the importance of supply chain control measures, strict enforcement, and collaboration in combating this issue,” said Alvise Giustiniani, vice president of illicit trade prevention at PMI.
“We must remain focused on these collective efforts, as there continue to be worrying trends like the increase of counterfeit cigarettes and the persisting problem of illicit whites. The first ever EU-wide tracking and tracing system that was introduced last year under the European Tobacco Products Directive is an important tool for law enforcement and one that we should continue to enhance through close collaboration and information-sharing to remain highly vigilant on emerging risks.”

Graphic: KPMG
According to PMI, illicit trade undermines efforts to reduce smoking prevalence and makes unregulated tobacco products easily accessible. “For PMI to deliver a smoke-free future and enable millions of people who would otherwise continue to smoke to switch to better alternatives to cigarettes, it’s essential to eliminate illicit tobacco trade wherever it exists,” the company wrote in a statement.
Interviews with law enforcement conducted by KPMG as part of the study indicate that the manufacture of illicit whites and counterfeit cigarettes in illegal factories located in the EU is increasing. Insights from law enforcement also refer to emerging organized crime groups that specialize in the smuggling and sale of illicit raw tobacco.
Other report findings reveal that:
Counterfeit cigarettes represent 19.5 percent of total illicit cigarette consumption. Compared to 2018, the biggest increases in counterfeit consumption occurred in the U.K. (by 137 percent, to 2.1 billion cigarettes) and France (by 82 percent, to 840 million cigarettes).
Illicit whites continue to be a major element of illicit cigarette consumption, representing 35.6 percent of illicit consumption in the EU, or 13.8 billion cigarettes, up from 29.8 percent in 2018.
For the first time since the research began in 2006, counterfeit cigarettes and illicit whites represent more than 50 percent of total illicit cigarette consumption in the EU.
The countries with the largest volumes of illicit cigarette consumption in the EU were France, with 7.2 billion illicit cigarettes, and the U.K., with 5.5 billion illicit cigarettes.
The highest shares of illicit cigarette consumption were found in Greece (22.4 percent), Lithuania (17.7 percent), and Ireland (17.5 percent). Compared to 2018, both Greece and Ireland saw a declining trend in illicit cigarette consumption, while Lithuania marked a slight increase.
Illicit flows from identifiable markets outside the EU, such as Ukraine and Belarus, continued to decline. However, illicit products reportedly originated from within the EU—and destined to another EU country—increased in 2019.
June 19, 2020
Irish Health Authorities Probe Menthol Successor Products

Photo: Photo:Beverly Buckley from Pixabay
Ireland’s Health Service Executive is investigating whether cigarette makers are breaching a recently enacted EU ban on menthol cigarettes, reports The Irish Times.
The move comes after Minister for Health Simon Harris accused tobacco companies of “undermining” the ban by exploiting loopholes in the new rules.
Cigarette manufacturers throughout the EU have been introducing substitute products targeting former menthol smokers, but critics contend some of the new products fall foul of the ban. Japan Tobacco International’s (JTI) Silk Cut Choice Green variant, for example, still contains low level of menthol, but the company insists this is legal as long as the cigarettes have no other smell or taste than tobacco.
JTI says it shared in advance the ingredients for its new menthol-added product with the relevant authorities in Ireland and the EU. “So there is full transparency throughout this process,” the company said.
Philip Morris International launched Marlboro Bright, which it sells as a “menthol blend without mentholation.”
Meanwhile, Irish retailers, who commit a criminal offence if they sell menthol-flavored cigarettes, have started contacting manufacturers asking for confirmation that the substitute products they introduced after the menthol ban are legal.
The Irish market for menthol cigarettes was valued at €250 million ($284.27 million) prior to the EU ban.
June 10, 2020
BAT Slammed for ‘Tattling’ on JTI Menthol Substitutes

Photo: simisi1 from Pixabay
Bob Blackman, chairman of the U.K. All Party Parliamentary Group on Smoking and Health, has criticized British American Tobacco (BAT) for leaking information about products made by Japan Tobacco International (JTI) following the ban on menthol cigarettes sold in the European Union, reports I News.
Blackman said he received a letter from BAT that claimed it had data showing that a new range of JTI cigarettes still contained menthol. “As I responded, their offer is completely inappropriate; their public duty is to share the evidence with the appropriate authorities without delay,” said Blackman.
A spokesman for BAT said the group had analyzed several JTI products and found them to contain menthol characteristics.
While admitting its new cigarettes contain menthol, JTI insisted they do not break the new laws.
“Some JTI cigarettes and rolling tobacco sold in the U.K. do still contain very low levels of menthol,” a spokesman for JTI said. “This is not prohibited under the law, provided that the use of such flavorings does not produce a clearly noticeable smell or taste other than one of tobacco—which they do not.”
Blackman said he had forwarded a copy of the letter to Public Health Minister Jo Churchill who responded that the issue was “being followed up” by her officials to investigate.
June 8, 2020
Hungary Wins EU Tax Fight

Photo: Steve Woods – Dreamstime.com
Hungary has won its fight at the European Union’s top court to topple part of an EU decision to stall the government’s progressive taxes on retailers and tobacco companies, reports Bloomberg.
The EU Court of Justice in Luxembourg on Thursday backed Hungary’s appeal and annulled the European Commission’s 2015 decision to order the suspension of the system.
The commission in 2015 opened a probe into the measure and temporarily barred the nation from collecting special taxes from retailers and tobacco companies on suspicion the “steeply” progressive levies violated EU rules.
June 5, 2020
Tobacco Firms Accused of ‘Undermining’ EU Menthol Ban

Photo:Beverly Buckley from Pixabay
Ireland’s minister of health, Simon Harris, has urged the EU to crack down on tobacco industry actions that he believes are “undermining” the recently enacted ban on menthol cigarettes.
Across the EU, tobacco companies have been introducing products targeted at smokers who previously used menthol products.
Philip Morris International (PMI), for example, introduced Marlboro Bright, a brand that it described as a “menthol blend without methylation.” Japan Tobacco International (JTI) launched Silk Cut Choice Green.
JTI and Philip Morris both advertised their new brands to Irish retailers as replacements or substitutes for their old menthol cigarettes.
PMI believes Marlboro Bright complies with the ban because the cigarette doesn’t taste of menthol when smoked. It also criticized any Irish retailers that are still illegally selling its old menthol Marlboro Green brand.
Anti-smoking campaigners in Britain recently lambasted JTI for distributing information to retailers on how to “navigate” the ban in a publication titled “Making a Mint.”
Rival tobacco companies that have chosen not to introduce substitutes for menthol cigarettes also criticized the moves by JTI and PMI.
“We believe both the letter and spirit of the law is clear, and as such we are not launching any cigarette brands or accessories with menthol-type properties,” said Simon Carroll, the Ireland country manager for British American Tobacco, whose subsidiary there is PJ Carroll.

The menthol market was estimated to represent up to 18 percent, or about €252 million ($282.3 million), of the Irish tobacco market before the introduction of the EU ban on May 20.

June 3, 2020
‘Menthol Ban Presents Opportunity to Switch’

Photo: VPZ
U.K. vapor industry representatives are hoping that the EU ban on menthol cigarettes that comes into force today will encourage more smokers to transition to less-hazardous vapor products.
The ban of menthol cigarettes comes from the EU Tobacco Products Directive (TPD), banning all cigarettes and rolling tobacco with “characterizing flavor” other than traditional tobacco.
The ban originates from a range of tobacco control measures approved by the European Parliament in 2013, with revisions including mandating the banning of menthol cigarettes by 2022.
In the U.K. there are an estimated 1.3 million menthol cigarette smokers.
Research by the U.K. Vaping Industry Association, the largest trade domestic body representing the sector, shows that menthol vapor products sold by its retail and wholesale members represent an average of 16.5 percent of all sales and nearly double this number, at 30.75 percent, for manufacturers producing such products.
The data suggests that menthol cigarettes are used by up to 12.4 percent of smokers in England, while global sales in 2018 exceeded $80bn. Currently, some 14.4 percent of the adult population in England smoke and there are some 7m smokers across the UK.

Doug Mutter
“I think in normal circumstances this move could have had the potential to significantly reduce smoking rates in the U.K.,” said Doug Mutter, director of manufacturing and compliance at VPZ, a leading vapor company in the U.K.
“However, with vaping stores closed and stop smoking services shut, it remains to be seen how we can engage menthol smokers and encourage them to make the switch.
“This is the biggest change to tobacco law since plain packing was introduced.
“For the vaping industry it presents an opportunity to help smokers finally make the switch, and whilst that will be harder with stores still closed, we believe that vaping presents the best opportunity to stamp out cigarettes for good.
“VPZ has built a digital platform for advice and guidance on smokers switching to vaping for the first time as well as how to pick the best products to help them quit.
“We are expecting a growth in the number of new vapers in the U.K, so it was important to us to use our expert staff to help create a guide for menthol smokers looking to quit through vaping.
“From which device best suits your needs to what strength of nicotine is required, we have tried to cover as many questions as possible. We have even put together some starter kits covering all categories to help with any first-time decision as we appreciate the first step can be daunting, without the opportunity to visit one of our stores.
“It will be difficult for many people just now because vape stores are closed and the temptation to go back to traditional cigarettes is everywhere. We are talking about over one million people in the UK will now not have their menthol cigarettes available and we hope that they are beginning to research which stop smoking products can best help them quit.
“Our message to smokers across the country is that the best time to quit cigarettes is now.”
May 20, 2020
Menthol Ban Is “at Odds With People’s Freedom” Say European Smokers

Photo: Taco Tuinstra
In testimonials collected by smoker advocacy group Forest EU, smokers from across Europe described the imminent ban on menthol cigarettes, which comes into force in every EU member state from May 20 May, as “useless” and “at odds with people’s freedom.”
Patricia from Denmark asked: “Why can’t I decide for myself whether or not to smoke cigarettes with menthol?”
Angelika from the Netherlands shared: “I don’t smoke menthols. But nowadays you are not allowed to determine anything yourself.”
Victoria from Poland said: “Of course, it is good that the EU is concerned about our health, but banning menthol cigarettes is at odds with people’s freedom. Also, it is likely that this measure will create an illegal trade, bringing menthol cigarettes from neighboring countries such as Ukraine.”
Other testimonials can be read on Forest EU’s website.
“This isn’t another restriction. Banning an entire category of cigarette is prohibition,” said Guillaume Périgois, director of Forest EU.
“Banning menthol cigarettes will do little to deter children from smoking and will almost certainly fuel an uncontrolled black market in menthol tobacco products.”
The enactment of the ban on May 20 follows the completion of a four-year phasing-out period under the EU-level Tobacco Products Directive which became applicable in 2016.
Menthol cigarettes are consumed by approximately 7 million EU adults. In 2017, 8 percent of EU monthly smokers said they used menthol flavored tobacco. Menthol tobacco users represented 24 percent of monthly smokers in Finland, 20 percent in Denmark, 16 percent in the Netherlands and Lithuania, 15 percent in Estonia and Latvia, and 14 percent in Belgium, according to Eurobarometer.
Menthol tobacco generates an estimate of €10 billion ($10.84 billion) in sales across the continent, according to Euromonitor.
May 15, 2020