Taxing nicotine products: a heated debate gets underway in Europe

October will be an important month for the EU’s tobacco taxation plans, according to the latest analysis from Tamarind Intelligence. 

So far, only five EU member states have publicly expressed their views about the Tobacco Taxation Directive proposal. 

But the first formal conversation is scheduled for early October, after which more member states are likely to publicly position themselves, according to Tamarind’s regulatory specialists. 

All the views from EU member states expressed so far are negative. 

“Some of these negative views come from key economies like Germany and Italy, and countries with specific product interests like Sweden, which suggests that the directive may require substantial revision to gain support,” said Tamarind Intelligence editorial director Barnaby Page. 

“For example, our analysis indicates that the proposed rates on nicotine pouches are extremely high considering the current rates applied by member states, and they are being strongly opposed by several countries, most notably Sweden. Even the European Commission’s own impact assessment acknowledges that such a high rate is likely to reduce the pouch market to a fraction of its current size.” 

The European Commission is proposing new minimum tax rates on e-cigarettes, heated tobacco products and nicotine pouches, which would have to be applied in all EU member states — including those that don’t currently tax these products. The rates would come into force between 2028 and 2030, and increase over time.