Tobacco, EU studies maxi sting of up to 1 euro more per packet

The European Union is trying to cash in on tobacco and is studying a maxi sting on cigarettes with percentages that could reach over 1,000 per cent. In fact, an internal document circulated in recent days reveals that the Commission's plans (in particular those of Dutch Commissioner Wopke Hoekstra) include a revision of the Tobacco Excise Duties Directive (so-called TED) which, if confirmed, will lead to particularly high increases in both taxation and retail prices for cigarettes, cigars, heated tobacco, rolling tobacco, electronic cigarettes and nicotine sachets.

An initial approach to revise the directive was already envisaged in 2022, only to be shelved. The current proposal, while working on different scenarios, assumes decidedly more drastic measures: according to the most aggressive assumptions for some countries the taxation of cigarettes would increase by 139%, the taxation of tobacco trimmings for do-it-yourself cigarettes by 258%. Even more drastic is the planned increase for cigars, with +1090%. And the Commission admits no exceptions, so much so that the sting under consideration will also fall on new generation products (heated tobacco, electronic cigarettes, nicotine sachets), including those made in Italy.

Translated into everyday practice, the hypotheses under consideration for Italian consumers would result in an increase of 1 euro per packet, or more than 20% in the case of both cigarettes and heated tobacco products. An increase never before seen in our country and decidedly against the positions repeatedly expressed by Italy. In mid-May, the Minister of the Economy himself, Giancarlo Giorgetti, had spoken with Commissioner Hoekstra and his technicians in Brussels, clarifying the need to safeguard important investments in Italy in the tobacco sector, where the tax factor (and the stability of the same) was an important element. The idea of the Italian government is not to undermine the current framework and to maintain a taxation that can ensure the maintenance of national supply chains and jobs in Italy and to protect consumers. In short, Rome's line is far removed from Brussels' on this dossier as well.

The introduction of an innovative stable tax framework introduced by this government has also contributed to reducing the illicit trade in cigarettes (1.8% in Italy against a European average of around 10%), making our country a "best practice" in Europe. Considerably higher percentages have been recorded in countries such as France (38%) and the Netherlands (where illicit consumption has doubled in the last year), which in recent years - in line with the approach that the Commission intends to embrace with this proposal - have instead considerably increased taxation on tobacco products and nicotine. It should also be noted that the planned increases would vary geographically within the EU: countries such as the Netherlands - Commissioner Hoekstra's home country - would, for example, keep their tax levels stable.

The EU itself estimates (albeit apparently conservatively) that the proposed increases in the taxation of tobacco and nicotine products alone - i.e. an intervention limited to a single market segment - would increase inflation by more than half a percentage point, in contrast to measures that, on the contrary, aim to prevent further flares in consumer prices. The proposal, then, would also heavily impact on the production and agricultural sectors that in recent years have seen important development and an essential role in employment and economic terms in Italy. It also risks dealing a blow to another strategic asset for our country: exports. Italy, in fact, exports heated tobacco products Made in Italy for a total value of almost two billion euro per year (of which more than 800 million in Europe): a segment that risks being seriously compromised by soaring taxation even in the destination countries - in some cases, increases of about 250 per cent are mentioned.