A confidential European Commission (EC) document, recently leaked, unveils a contentious proposal to impose substantial EU-wide taxes on nicotine pouches (NPs), also known as white snus. This initiative, driven by the Directorate-General for Taxation and Customs Union (DG TAXUD), has ignited significant apprehension among harm reduction advocates, economists, and industry stakeholders. citeturn0search0
Potential Economic and Political Fallout
The timing of this proposal is particularly troubling, given Europe’s current economic instability characterized by persistent inflation and escalating trade tensions with the United States. Critics argue that such a tax hike could further burden consumers and deter investment in European manufacturing sectors. citeturn0search0
High Taxes and the Rise of Illicit Trade
A recent Europol report, “The Changing DNA of Serious and Organised Crime,” underscores the direct correlation between excessive taxation and the proliferation of black markets, specifically highlighting tobacco and nicotine products. The report warns that stringent tax policies create lucrative opportunities for criminal networks to expand operations, smuggle products across borders, and launder illicit funds. Experts fear that a steep price increase on NPs could drive a surge in illicit sales, with products being illegally imported from non-EU nations like China. citeturn0search0
Contradiction to Harm Reduction Efforts
The proposed taxation strategy appears to contradict the EU’s harm reduction objectives. Countries like Sweden have demonstrated that embracing alternative tobacco products can significantly reduce smoking rates. Sweden’s pioneering policy on safer alternatives has contributed to lowering the country’s smoking prevalence to under 5%. By imposing heavy taxes on less harmful nicotine alternatives, the EU risks undermining public health gains achieved through harm reduction strategies. citeturn0search11
GINN´s Insights
The proposed revision of the EU Excise Duties Directive is expected to be presented in the coming months. Member States of the European Union will need to unanimously agree on the final text. The European Commission has already delayed the proposal for over three years, but several Member States have warned that further postponements are no longer acceptable, as some countries have already introduced their own taxes without waiting for Commission guidance.
Under the new proposal, nicotine pouches are expected to be taxed in the EU at 50% of the retail selling price (including all taxes) or at an EU-wide rate of EUR 120 per kilogram. Member States will be granted a four-year transition period to reach the €120/kg rate, allowing for the gradual implementation of progressive tax rates over that time.
A Call for Proportionate and Evidence-Based Policy
GINN advocates for taxation and regulation that reflect the relative risks of nicotine products. We urge the European Commission and Member States to engage with stakeholders, including public health experts and industry representatives, to ensure that policies are grounded in scientific evidence and do not inadvertently hinder harm reduction efforts.
Stay Informed and Engaged
We will continue to monitor developments and provide updates. For more information and to join the conversation, visit ginn.global or follow our advocacy efforts on LinkedIn.
🔗 Read GINN’s analysis on EU nicotine taxation here: EU Taxation and Regulation: A Case for Nicotine Pouches and the Swedish Model
References:
Leaked EU Plan to Tax Nicotine Pouches Sparks Economic, Political, and Criminal Concerns
