Alongside the plenary session, French MEPs Anne-Sophie Pelletier (The Left) and Michèle Rivasi (Greens/EFA) organised a round table on tobacco taxation on Wednesday 14 June. The experts called for tobacco taxation to be harmonised at European level.
They also condemned the delay in revising the directive on the taxation of tobacco products, which is part of the Europe’s Beating Cancer Plan (BCP) (see EUROPE 13126/3). The European Commission has still not communicated a date, although it was initially announced for the end of 2022, then postponed to the beginning of 2023.
According to Lilia Olefir, director of the NGO coalition Smoke Free Partnership, the price of tobacco varies enormously from one country to another: a packet of cigarettes costs €2.91 in Bulgaria, compared with €15.40 in Ireland. And this gap, which cannot be explained solely by differences in living standards, has increased in 2022. In particular, she mentioned the case of Luxembourg, which charges very low prices despite having the highest GDP per capita in the world. It’s a question of tax policy.
In her view, this lack of harmonisation “encourages cross-border shopping”. A mechanism that the tobacco industry has understood very well, according to Martin Drago, speaking on behalf of the ACT-Alliance contre le tabac association. “The tobacco industry is deliberately creating confusion on the subject of parallel trade”, he explained. This confusion arises from the different components of parallel trade: some, such as cross-border shopping, are legal; others, such as smuggling and counterfeiting, are illegal. “The industry also knowingly fails to mention its own role in this trade, for example by over-supplying border areas such as Belgium, Luxembourg and Andorra”, he said.
In addition, the industry uses the KPMG report as an “influence tool”. This report, which is intended to put a figure on parallel trade, has been criticised by several academics, in particular for its sources and opaque methodology, but also for the lack of third-party verification of the data. The findings of this report, which has been widely reported in the media and by politicians, “are of benefit to them, as it feeds the argument for reducing taxation”.
Robert Branston, Associate Professor of Business Economics at the University of Bath, spoke of the tax differentials between tobacco products. A rolled cigarette is much cheaper than a factory-made cigarette. “If the tax is not applied consistently, it will encourage smokers to switch to cheaper products rather than stop smoking”, he said.
Finally, Dr Olivier Milleron, cardiologist at the Bichat-Claude-Bernard hospital in Paris, spoke about the cost of the tobacco industry to public health insurance systems. “To offset the health costs of tobacco, a packet of cigarettes should cost €40”, he said. (Original version in French by Anne Damiani)