The customs authority in Dijon announced a large scale seizure of smuggled tobacco this week. The tobacco had been brought in from Germany, where prices are lower. Dijon customs said that the gradual rise in the price of tobacco in France, which started this month and is expected to result in a €10 pack of cigarettes by 2020, makes smuggling from some neighbouring countries more attractive. French customs seized 238 tonnes of contraband tobacco in 2017. Read More
BFM reports on an increase in the number of robberies of tobacco shops in France following recent tobacco excise increases. Between January 2017 and January 2018, the number of thefts from tobacconists increased by 7%. €407,400 of cigarettes were stolen in January 2018, compared with €350,500 worth last year. Some tobacconists interviewed said that they had to implement extra security measures to protect themselves against thieves. One tobacconist who now serves customers from behind a secure window says that ongoing excise increases on cigarettes mean they are “worth gold” to criminals. Read More
Le Parisien reports on more evidence of the failure of plain packaging for tobacco in France. Launched in January 2017, the policy was touted by activists as a measure which would bring down smoking rates. However, even the most ardent supporters of plain packaging admit that sales of tobacco products have been stable. In turn they now call for a price point of €10 for a packet of cigarettes to bring smoking levels down. Read More
The SME Circle, the European People Party’s initiative to support small and medium sized companies, has called for a strong share of the new EU Budget to be invested in promoting SMEs in Europe. The SME Circle points out that 99% of businesses in Europe are SMEs, amounting to over 20 million companies, and that these vital businesses need support now more than ever. Read More
A campaign launched this week in Yorkshire in the UK aims to tackle trade in illicit tobacco in the area. A recent survey in the region showed that 31% of smokers have tried illicit tobacco, illicit tobacco makes up 9% of the tobacco market, and that 16% of smokers feel comfortable with the sale of illicit tobacco. Read More
Les Echos has reported on the increased prices for tobacco which have come into effect this week in France. Under this plan the price of fine-cut tobacco has risen by €2, while the price of cigarettes has risen by €1. By raising the price of fine-cut this move is expected to significantly increase illegal tobacco sales and undermine the government’s tax base. Read More
An obvious correlation exists between the highest levels of illegal and non-domestic consumption (e.g. France, UK, Ireland, Poland and Finland) and the highest taxation rates applied to fine-cut toconsbacco, in comparison with cigarettes. The figures clearly show that any alignment of tobacco taxation, regardless of the products’ specificities, will prevent fine-cut tobacco from fulfilling its buffer function, leading to increased illegal trade of cigarettes and driving down government revenues.
Read more about the relationship between tax and illegal trade