Why tobacco prices and taxes are stagnating in the EU
Monday, 04 September 2023
The cost of a pack of Marlboro in 2022 varies in the 27 EU countries from €2,91 in Bulgaria to €15,40 in Ireland, data collected and analysed by the Smoke Free Partnership (SFP) shows.
BRUSSELS, BELGIUM, << 04/09/2023 >> – The price gap between the cheapest and most expensive country was €12,49 in 2022, compared to €9,38 in 2018. The price gap between EU countries becomes bigger as there was no price increase or a price increase of less than 5% in 8 EU countries between 2018 and 2022. In a few countries, France, Finland, Denmark, Hungary, and the Czech Republic, the price increased between 31% and 45% in the period 2018-2022. The data on the cost of Marlboro’s cigarette packs were collected in 2018, 2020, and 2022 for every EU country by Luk Joossens. This issue is not new to the EU and that’s why the work on the revision of the Tobacco Taxation Directive started back in 2016[1].
This large price difference between the same cigarette brand in the EU countries demonstrates that the Tobacco Tax Directive 2011/64/EU no longer ensures a high level of health protection;
“A significant price gap of tobacco products between Member States represent a sufficient economic incentive for unintended high levels of cross border shopping, which undermines the goal of this Commission that is set in the Europe’s Beating Cancer Plan. Tobacco taxation is the most effective way to reduce cancer”, states Luk Joossens, Senior Advisor at the Smoke Free Partnership.
The revision of the Tobacco Tax Directive has been repeatedly delayed since 2021.
“The delay in updating the Tobacco Tax Directive further deepens health and socio-economic inequalities across the EU. By not increasing tobacco taxes, tobacco products remain more affordable in certain Member States,” said Lilia Olefir, Director of the Smoke Free Partnership.
Without the leadership of the Commission, Member States might be reluctant and limited in their power to reform the EU tobacco taxation legislation.
By analyzing the revenues from tobacco taxes, we can clearly see that the EU countries that raised taxes and prices received higher revenues. Ireland has been regularly increasing taxes on tobacco products every year. In parallel, revenues have increased (from 734 million to 1.3 billion euros between 2018 and 2021).[2] Countries like France and Belgium also increased revenues through a tax increase from 2018 to 2021.[3]
On the other hand, many countries that did not raise taxes experienced no increase or even a decrease in revenue. Countries such as Cyprus, Greece, Germany, and Malta did not raise excise duties on tobacco products between 2018 and 2021. This led to no change in revenue for Germany, but a decrease in revenues for Cyprus (41.2 million euros lost),[4] Greece (310 million euros lost),[5] and Malta (2.6 million euros lost).[6]
Big Tobacco is the only one benefiting from the blocking or delay of the revision of the Tobacco Tax Directive. Tobacco industry interference systematically translates into more sickness and death from tobacco use.
Tobacco consumption continues to be the leading cause of preventable cancer and premature death, with nearly 700.000 deaths annually in the EU[7]. Taxation is one of the most effective policies to reduce tobacco consumption. Annual tobacco tax rise contributes to preventing the uptake of tobacco use by teenagers and youth, reduces consumption and health inequalities, and increases government revenues.
Smoke Free Partnership (SFP) is a coalition of over 50 NGOs working on the implementation of the WHO Framework Convention on Tobacco Control, EU tobacco control policy analysis and advocacy.
[1] Revision of excise rules for tobacco https://bit.ly/3JQXhoG
[2] Revenues from tobacco taxes, available at https://bit.ly/3TRSw2H
[3] Ibid.
[4] Ibid.
[5] Papageorgiou, Christos, Panagiotis Farlekas, Zacharias Dermatis, Athanasios Anastasiou, and Panagiotis Liargovas. 2021. “Assessing the Impact of Excise Duties on a State’s Revenues: The Case of Greece.” Public Sector Economics 45 (3): 387–412. https://doi.org/10.3326/pse.45.3.4.
[6] Revenues from tobacco taxes, available at https://bit.ly/3TRSw2H
[7] Tobacco overview by the European Commission, available at https://health.ec.europa.eu/tobacco/overview_en