In connection with the proposal of the European Commission (EC) for much higher taxation of cigarettes, the tobacco industry in Germany is warning that this could make the product much more expensive - from the current around 8.50 euros to over 12 euros for a pack of branded cigarettes. The German public media ARD quotes Jan Mücke from the Federal Association of the Tobacco Industry and New Products (BVTE) in this regard, according to whom a 30-gram pack of finely cut tobacco for rolling cigarettes will cost not 10, but more than 18 euros in the future.
Mücke is referring to the EC's proposal to increase the minimum tax rate on cigarettes to 215 euros for 1,000 pieces of cigarettes. It is currently 90 euros, ARD recalls. For rolling tobacco (finely cut), the rate will jump from 60 to 215 euros per kilogram.
Warnings about the expansion of the black market
EU regulations do not contain price prescriptions, but tobacco companies can raise their prices if they are obliged to pay higher taxes. The Commission's proposal also includes a premium on purchasing power, which will make sales in relatively rich countries like Germany even more expensive.
"This is completely disproportionate. Such a price shock would fuel the illegal trade, which turns the idea into an economic stimulus program for the black market," says Mücke.
Even now, one in five cigarettes smoked in Germany is not taxed - either because it comes from the black market or because it is imported legally from foreign countries where cigarettes are cheaper. "This share could increase significantly in the future - in the UK it already exceeds 40%", adds the head of the industry association.
Criticism from the European Parliament
Whether the proposal will be adopted in its current form, however, is questionable, as the member states and the European Parliament have yet to give their opinion, and there are critical voices from politics. "If we turn the tax tap too far, we risk shifting more and more business into the shadow economy", warns German CSU MP Markus Ferber, quoted by ARD. "The Commission must act with a sense of proportion here - otherwise it will harm honest companies and help smugglers", he added.
"Many smokers who have previously bought cigarettes legally could switch to illegal flows", warns Jan Mücke of the Federal Association of the Tobacco Industry. The expected boom in the black market could lead to an increase in the number of smokers among young people, because "black marketers do not check age" to their customers.
Support for Brussels' plans
Health experts, on the other hand, recall that smoking can cause cancer and are positive about the European Commission's plan. "A significant increase in taxes on tobacco products is the most effective measure to motivate smokers to quit and to prevent non-smokers - especially young people - from starting to smoke", says Kathrin Schaller from the German Cancer Research Center (DKFZ). "A ten percent price increase reduces tobacco consumption in high-income countries by around four percent," she assures.
According to industry figures, last year the German government collected 15.6 billion euros from taxes on tobacco and tobacco products. In future, Brussels wants to receive a share of this revenue from the member states - around 15 percent. There is no solution to this yet, but the idea is already encountering strong resistance in the member states, the ARD also points out.