Tobacco Europe statement on the Tobacco Excise Directive Review

Brussels, July 18,2025

Tobacco Europe takes note of the European Commission’s proposal to revise the Tobacco Excise Directive, published on 16 July 2025. TE welcomes the effort to create greater harmonisation across the EU, notably through the establishment of separate excise categories for electronic cigarettes, heated tobacco products, and tobacco-free nicotine pouches.

However, TE has serious concerns regarding the proposed minimum rates, which we believe are set too high for both combustible tobacco and newer nicotine products. The levels suggested go beyond what is justified by consumer income evolution and economic evidence, risking unintended consequences such as reduced excise revenue and increased illicit trade, particularly in lower-income Member States.

Importantly, an excessive increase to minimum rates applied to tobacco products will substantially compromise the tax rate setting sovereignty of national governments in most Member States. This will hinder those governments from pursuing the nuanced policies required to balance revenues with other political objectives and it will impose huge price shocks on millions of consumers in the EU.

TE urges EU policymakers to consider a more balanced approach that:

• Respects Member States’ ability to tailor excise rates to local economic conditions and purchasing power;
• Applies genuine purchasing power parity adjustments rather than arbitrary formulas;
• Adopts more moderate increases in minimum rates, aligned with inflation and income growth since the last Directive update;
• Focuses on monitoring flows of raw tobacco to fight fraud,  on semi-processed tobacco.

Tobacco Europe stands ready to engage constructively in the legislative process and remains available to support EU institutions and Member States in ensuring a fair, effective, and economically sound excise framework.