Spain - Tobacco Reporter

Canary Islands to Revise Tobacco Tax Law

The Canary Islands plans to revise its tobacco products tax law in 2024, according to 2Firsts.

Beginning next year, e-cigarette products and e-cigarette juices will be subject to a tax of €0.10 ($0.10) per milliliter with the revenue being incorporated into the 2024 budget proposal.

Implementing this tax will make the Canary Islands the first Spanish autonomous community to impose a specific tax on tobacco products.

The tax will affect e-cigarette devices and liquids regardless of nicotine content.

A Ministry of Health report titled E-Cigarette Tax Review: European Regulations and Potential Scenarios in Spain predicts that the impending tax could increase national public revenue from €7 million to €48 million.

The revised bill will also increase the tax rate for cigars and small cigars to 4 percent from 2 percent and increase the tax rate for other tobacco products to 10 percent from 5 percent.

December 1, 2023

THR Summit to Take Place in Spain

The Tobacco Harm Reduction Summit Spain 2023 is scheduled to take place Feb. 23, 2023, in Madrid at the Universidad Rey Juan Carlos.

The Tobacco Harm Reduction Summit Spain 2023 aims to provide a space for evaluation and debate on the impact that harm reduction strategies can have in the field of smoking, offering a range of international perspectives ranging from scientific analysis of the issue to its political and regulatory implications, according to the website. It provides a forum to contribute to the generation of new proposals for tackling the problem of smoking, providing new points of reflection for scientists, professionals, technical and political decision-makers.

February 14, 2023

Smugglers Create Diplomatic Dispute

Tobacco smugglers fleeing customs agents have caused a minor diplomatic incident between Gibraltar and Spain, reports Reuters.

Gibraltar accused Spain of a “gross violation of British sovereignty” after two customs officials entered the territory during an anti-smuggling operation. Spanish media reported that the Spanish customs agents’ boat lost power while chasing the tobacco smugglers.

Gibraltar’s chief minister, Fabian Picardo, said the facts of the incident need to be investigated before diplomatic action is taken; rocks were reportedly thrown at the customs agents, and a video of the incident shows potential shots fired, but it is unclear who fired them.

Spain’s foreign ministry condemned the attack on the customs agents, who suffered “serious injuries” and said it “categorically rejects the terms” of the statement issued by Gibraltar “as well as the claims of alleged British sovereignty over the territory and waters of Gibraltar contained within it.”

Britain and Gibraltar are in the process of negotiating a treaty to settle Gibraltar’s post-Brexit status and decide how to police the border with Spain.

February 7, 2023

Moving Backward

If enacted, Spain’s proposed regulations on vaping products will hamper tobacco harm reduction.

By Stefanie Rossel

In mid-May, a shockwave hit Spain’s vaping industry: The government presented a bill that would end the independent domestic vaping sector. The proposal calls for limiting vapor product sales to state-owned tobacconist shops within five years. Specialized vape shops can stay in business only if they transition into licensed tobacconists—a step that would oblige them to sell combustible products as well. The bill would also ban online sales of vape products.

At a recent conference, Angeles Muntadas-Prim Lafita, chair of the Spanish Association Supporting Vapers (ANESVAP) explained that the proposed legislation means the government wants to monopolize the nicotine market. “A country that is a member state of the European common market wants to monopolize a free and independent market. That’s like going back to a time when Spain wasn’t even a democracy—or even to the Spanish Inquisition,” she said.

Muntadas-Prim Lafita considered it unlikely that vape shop owners would sell combustibles. Established tobacconist shops, on the other hand, might or might not sell vaping products under the planned rules. “This would be harmful for consumers who would be forced to go to a tobacconist to get their vape products—or as many as they could find because it would be up to the tobacconist to decide what he is going to sell,” she said. “In addition, smokers who use vaping to quit more hazardous products might be tempted to purchase combustibles again. It’s like forcing an Alcoholics Anonymous meeting to be held in a liquor store.”

If the bill, which is now in the stage of public consultation, passes, it would also mean the loss of 1,200 direct and 3,000 indirect jobs in times of emerging economic crisis, according to Muntadas-Prim Lafita. Vape shops would have only six months to notify the commission for the tobacco market that they wanted to transition to become tobacconists. “The result of this legislation would be black markets, disobedience and lots of people going back to smoking,” she predicted. “Tobacco control in Spain is one of the fiercest and most stalled in the European Union.”

A Worrying Precedent

Criticism also came from the Independent European Vape Alliance (IEVA), the trade representative of independent producers and retailers of vaping products in the EU.

In a statement, the organization pointed out that the proposed legislation went against the main principles of EU competition law. “Considering the consequences of the proposed measures, the [draft bill] will set a worrying precedent in which legally established business can be unilaterally closed in an EU member state and handed over to a state-owned network of tobacco shops,” the IEVA wrote.

The planned legislation also violates the freedom of movement of goods in the EU and would generate severe adverse economic impacts in Spain and the EU, according to the group. It would drastically cut the European distribution value chain and negatively impact the exports to Spain from other EU member states, as the sales of vaping products in tobacco shops are expected to be extremely limited compared to the ones in specialized shops. Tobacco shops, after all, aim to maximize sales of combustible cigarettes and will be disinclined to devote time to explaining electronic devices to smokers looking to switch to less harmful alternatives.

An online sales ban for vape products would also drastically reduce the movement of goods in the EU as retailers in other countries would no longer be allowed to sell their products in Spain. Lastly, the IEVA said, the proposed law fails to distinguish between combustible tobacco products and noncombustible products as established in the EU’s 2014 Tobacco Products Directive (TPD).

The association called on the Spanish government, medical authorities and other stakeholders that will provide comments on the draft bill to critically reconsider the measure and insisted authorities review the proposed legislation for competition issues.

A Small Market

Compared with markets such as the U.K., vaping in Spain is relatively rare. After pharmaceutical companies lobbied the government for tougher legislation on vape products, the number of vape shops dropped by 90 percent in 2014. Today, there are around 535,000 vapers, which represents an adult vaping prevalence of 1.33 percent, according to the Global State of Tobacco Harm Reduction. This compares to a smoking rate of 27.9 percent, or 11.1 million people.

Vaping devices, like heated-tobacco products, are legal in Spain and can be sold to those aged 18 or older. E-liquids are currently untaxed. Statista estimates that the Spanish revenue service will collect the equivalent of $183.4 million in e-cigarette taxes in 2022. The market is expected to grow annually by 2.89 percent.

The bill is part of a wider effort by the Spanish government to bring its regulatory framework for tobacco products in line with World Health Organization and TPD standards.

The manufacture, advertising and sale of vape products in Spain is regulated under the Royal Decree 579/2017, implemented five years ago, which basically translates the TPD into Spanish national law. The rules ban smoking and vaping in all indoor state-owned public places, on public transport and in some outdoor places, such as parks. Advertising of vape products on TV is allowed, though there are regulations about the type of program and the times of day in which advertisements may be broadcast. Cross-border sales of e-cigarettes are prohibited.

A Tough Stance

In December 2021, the government published the draft of its “Comprehensive Plan for Smoking Prevention and Control 2021–25,” which aims to extend anti-smoking legislation from 2006 to include vaping products. During the consultation period, several Spanish medical societies took a hard stance on vaping, saying e-cigarettes are an ineffective tool for smoking cessation and asking the government to regulate them like combustible tobacco products.

Among other things, the plan aims to make more places—including private vehicles—smoke-free and vape-free, ban all e-liquid flavors except tobacco and introduce plain packaging for combustible cigarettes, vape devices and e-liquids.

Following a June 2021 report by the National Committee for the Prevention of Smoking, the plan also called for the taxation of vapor products. The report proposed a general e-liquid tax at the EU average rate of €0.15 ($0.15) per milliliter and an additional tax of €0.006 per milligram of nicotine. This would amount to an average tax rate of 35.6 percent, enabling the Spanish government to collect €35 million in taxes per year, according to the National Committee. With all measures combined, the government aims to reduce the percentage of the population that smokes to 10 percent by 2040.

Uncertain Outcome

According to the World Vapers Alliance analysis, the draft plan is biased against vaping, selectively citing studies, many of which have already been refuted. However, it didn’t consider studies acknowledging the harm reduction potential of vape products, such as the findings of Public Health England that vaping is 95 percent less harmful than smoking and may serve as an important smoking cessation tool.

“What this means is that the government wants to make it harder to vape than to smoke,” the organization stated. “Overall, the government draft shows the lack of knowledge politicians have on harm reduction tools, such as vaping, and the need for vapers to press them and tell their stories. Public health laws need to be based on evidence and not on stigma.”

The ANESVAP has started collecting signatures for a petition urging Spain to keep vapor taxes low and e-cigarettes accessible for customers. It also calls on regulators to keep online sales legal, allow an appropriate range of flavors and differentiate between vapor products and combustible cigarettes in smoke-free places.

The busy schedule of the Spanish government leading up to next year’s general election presently plays into the hands of the country’s vape community. Already more than a year behind schedule, the plan is now less likely to be brought before the Spanish Parliament soon, according to ECigIntelligence, which expects the bill to be discussed next year at the earliest.

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.

November 1, 2022

Spain Asked to Rethink Vape Shop Ban

The Independent European Vaping Association (IEVA) has called on the Spanish government to reconsider a proposal to ban vape shops. According to the IEVA, the legislation under consideration would hand the entire electronic cigarette business to big tobacco companies.

“Against all principles of EU law (proportionality, good regulation, good administration, fair competition and harmonization), the Spanish government has proposed to ban and close all vape shops across Spain (transferring the sale of electronic cigarettes and e-liquids to the state monopoly of tobacco shops and to prohibit all online sales,” the IEVA wrote on its website.

According to the IEVA, these measures not only contravene EU rules on free competition and free movement of goods, but will also generate unemployment at a time or economic crisis. What’s more, the proposal will deprive vaper from personalized access to vaping products, forcing them to buy them at tobacco shops, which could temp them back to more risky combustible products, the group said.

As part of the legislative process, Spain submitted a so-called TRIS notification to the European Commission on June 21 The IEVA shared its views on the proposal and the full submission is available here.

June 24, 2022

Smuggling Ring in Spain and Portugal Disrupted

Spanish and Portuguese law enforcement agencies have dismantled a criminal network involved in cross-border tobacco smuggling, according to Europol.

On Feb. 16, more than 100 officers simultaneously raided addresses on either side of the border, detaining eight suspects.

The officers seized 2 tons of cut tobacco and tobacco strips, more than 10,000 counterfeit cigarettes and tobacco cutting and drying equipment. They also recovered €37,800 ($42,778.46) in cash.

Property searches were carried out in the province of Sevilla (Spain) and in the cities of Coimbra, Lisbon, Leiria and Aveiro (Portugal).

The criminals are suspected of having illegally imported from Spain to Portugal large quantities of leaf tobacco and strips, destined to produce counterfeit cigarettes. This criminal network had tobacco storage and production facilities scattered across both countries.

Law enforcement believes these criminals have smuggled over 7 tons of tobacco products from Spain to Portugal in 2021 alone.

The revenue loss generated by this illegal activity is estimated at over €163,000 in Portugal.

February 21, 2022

Tag: Spain