Economic contributions of traditional tobacco and new nicotine products to the EU 27

The tobacco and new nicotine products industry’s economic footprint in the EU-27 is a significant contributor to the economy of the European Union and its communities: supporting over a million jobs across the value chain, creating value, generating a substantial GDP impact, and significantly contributing to public revenue through excise and VAT. As the industry is experiencing changes due to evolving consumer demand and regulation, Tobacco Europe and its members commissioned S&P Global a report to quantify the industry’s economic footprint in terms of jobs, sales activity, GDP, and wages at the Member State and aggregate EU-27 levels.

The key findings of the Study show that:

  • Consumers in the EU-27 spent €151.3 billion on traditional tobacco products and new nicotine products, representing about 2.5% of total EU-27 consumer expenditure.
  • Serving that consumer demand ultimately supported over 1.5 million jobs, meaning that 1 out of every 130 jobs in the EU-27 was supported by the tobacco industry.
  • In 2021 only, the industry stimulated €194.5 billion in GDP across the EU-27. If embodied as an individual country, it would rank as the 16th largest in the EU.

The report also provides counterfactual analysis using traditional tobacco products sales and new nicotine products sales to share insights on how subtle changes in consumer preferences could affect the baseline economic indicators such as jobs and GDP:

  • A 5% decline in traditional tobacco product sales could put over 70,700 jobs at risk and lessen EU 27 GDP by 8,9 billion euros;
  • A 5% decrease in new nicotine product sales could put at risk 6,800 jobs and lower EU-27 GDP by 854,3 million euros.

Considering the on-going transitions, the industry is facing, this report’s findings can inform current and future dialogues on how to effectively navigate the transitions necessitated by shifts in consumer demand for traditional tobacco and new nicotine products.
Please find the report here.

To further illustrate these findings, Tobacco Europe launched a micro-site aggregating the top-line contributions made by the traditional tobacco and new nicotine products to key economic indicators in 2021, both at EU and national levels. The micro-site with aggregated figures is available here.

Tobacco Europe has also developed factsheets with the EU aggregated figures that are free of use: to download them, click on the carousel of pictures on the right side of the webpage. For country figures’ factsheets, please reach out to Tobacco Europe.