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EU Court clarifies that International Treaty does not exclude tobacco industry from dialogue with policy makers

By In the news

Today the Court of Justice of the European Union (CJEU) delivered its judgment (English version here) in Case 160/20 “Stichting Rookpreventie Jeugd and Others”. The Court ruled that the 2014 Tobacco Products Directive legally and justifiably used Methods and Norms of the International Standardisation Organisation (ISO) to measure emission levels for cigarettes.

The Court made it clear that these ISO Norms and Methods are not disqualified because they were developed with the assistance of the tobacco industry as was argued by tobacco control organisations. According to the Court (§58-61), the International Treaty referred to by the tobacco control organisations (i.e. the WHO FCTC) must be interpreted differently: “It is clear from the very wording of that provision that it does not prohibit all participation of the tobacco industry in the establishment and implementation of rules on tobacco control, but is intended solely to prevent the tobacco control policies of the parties to the convention from being influenced by that industry’s interests”. Continuing, the Court highlighted that the, non-binding, guidelines of the Treaty in question are further evidence of its interpretation as these recommend that contacts with the industry must be transparent and limited, rather than fully absent or prohibited.

ESTA believes that this Ruling by the Court fully supports the European Commission’s general approach to the tobacco industry, allowing meetings in full transparency on tobacco legislation and implementation. However, the European Commission’s DG SANTE to this date systematically refuses meetings, even to solve problems with implementation and enforcement of laws to the detriment of consumers, governments and smaller and mid-sized tobacco companies.

Tobacco Tax Revenues: Belgium slowly recovering from fiscal shortfall

By In the news

The Belgium government reported yesterday an increase of 123,8 million euros of excise receipts from tobacco, which amount to 2,373 billion euros in 2018. This increase is partly due to higher prices in neighbouring countries, such as France where cigarettes packs increased by around 1 euro.

This increase of government revenues follows difficult years for the Belgium government, which recently suffered from severe fiscal shortfalls due to poorly-conceived tax policy on fine-cut tobacco. As demonstrated in the 2018 London Economics Study, Belgium has implemented sharp increases in tobacco excise duties (up to 17-19% in 2016-2017) since 2013, which heavily impacted domestic duty-paid sales and significantly reduced taxation receipts. In 2016 excise duties were increased to raise revenues, but there was a fiscal shortfall of almost 5% (€3.087 billion instead of the expected €3.238 billion). By 2017, tobacco duties had further declined to €3.004 billion, thereby exacerbating the fiscal shortfall.

ESTA Secretary General Peter van der Mark said: “Belgium’s example illustrates the sensitivity of the demand for fine-cut tobacco to changes in excise duties (and price), but also the importance of taking into account the speed of changes in consumer behaviour in response to excise changes; the buffer function of fine-cut tobacco; and the long run consequences on public finances of sudden and ill-conceived policy changes.

Release of the 2018 London Economics study

By In the news

ESTA is pleased to announce the release of a study commissioned from London Economics on the fine-cut tobacco (FCT) excise taxation in the European Union. This study illustrates the key economic mechanisms of fine-cut tobacco taxation by using the examples of 4 meaningful FCT markets: Belgium, Germany, the Netherlands and the United Kingdom. The study is based on data coming from publicly available sources including national statistical agencies and the European Commission. The 2018 London Economics study reaffirms the key findings of the initial 2015 study, underlining the buffer function of fine-cut tobacco. By providing an affordable legal alternative to price-sensitive consumers when faced with prohibitive tobacco excise increases, fine-cut tobacco mitigates losses in government revenue resulting from rises in illicit trade and non-domestic consumption. Read More

EU health Commissioner calls to increase taxes on tobacco across Europe

By In the news

In an interview with Die Welt, EU health commissioner Vytenis Andriukaitis said Europe needs to think seriously about the accessibility of tobacco products and called for full implementation of the Framework Convention on Tobacco Control by all signatories. When asked where money for preventative measures would come from, Andriukaitis said: “Consumption taxes on alcohol and tobacco, which in any case are quite low in many countries, could be increased by a Europe-wide uniform percentage, and the revenue from this increase would then flow into the EU budget.” Read More

Belgium to follow the footsteps of the UK and France on plain packaging

By In the news

Following the decision of some European countries, Belgian Health Minister Maggie De Block recently announced that an agreement had been found to introduce plain packaging for tobacco products. If the effective date of the measure has not yet been specified, the Minister of Health has announced that the ban on branding will apply to cigarettes, rolling tobacco and water pipe tobacco. Ms. De Block justified this measure as she believes it will reduce tobacco consumption as demonstrated in other countries. Read More

Project sun key figures demonstrate the importance of responsible and adequate tax policy making

By In the news

The KPMG 2017 Project Sun report on counterfeit and contraband cigarette consumption in Europe shows an overall decrease in the trade of illicit cigarettes, although they are still estimated at 8.7% of total consumption. In total this represents a tax revenue loss of €10bn for EU member states, making illicit cigarettes one of the largest sources of overall consumption. Read More

Germany not planning to follow Paris on restrictive smoking ban in parks

By In the news

The city of Paris has turned six parks into non-smoking areas. This ban on smoking is supposed to last for a trial period of four months before a probable extension to all gardens and parks in the capital. So far, there has only been a smoking ban on 500 playgrounds, but this move is considered to be the next step in the city’s anti-smoking policy. Countries like Finland, Iceland, the UK and some US cities have implemented a similar ban. Read More