ESTA

Brussels, August 2025 – ESTA announces the publication of a comprehensive study on the consumption of fine-cut tobacco (FCT) across key European markets commissioned from London Economics. The analysis underscores FCT’s essential “buffer function” – its ability to help retain consumers within the regulated domestic market when consumers of factory-made cigarette (FMC) are outpriced.

The study allows policymakers across Europe better decision-making based on data and correct economic analysis when considering the development of legislation.

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Yesterday, the European Commission adopted not only the first part of the so-called Multiannual Financial Framework, but also agreed on a proposal for a revised Tobacco Excise Directive.

The Tobacco Excise Directive proposal demonstrates a total lack of understanding of the economics of tobacco taxation and breaks with the EU’s 50-year framework, which has historically ensured stable government revenues, a proper functioning of the internal market, and allowed Member States to achieve their health objectives.

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After Peterson of Dublin closed its doors in 2018, another small pipe tobacco company ceases manufacturing. Planta Tobacco Company from Berlin closed its doors due to the significant costs resulting from the EU Tobacco Products Directive adopted in 2014 and the subsequent EU regulations.

When proposing the EU Tobacco Products Directive, the European Commission admitted that smaller and mid-sized companies would be impacted much more than large multinational cigarette manufacturers, but from its point of view that was a price worth paying. However, few real impacts were calculated and, in the cases, where they were, they hugely underestimated the real compliance costs.

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