The New Tobacco Products Directive (TPD)

At the ENVI Committee Meeting, the Taxpayers’ Association calls for a hearing of all stakeholders and a regulatory impact assessment

According to criticism from the Taxpayers Association of Europe (TAE), it was almost exclusively supporters of the new Tobacco Products Directive (TPD) who got a chance to speak at the public hearing on the new Directive in front of the ENVI Committee. Negative economic ramifications, such as tax-revenue losses running in the billions caused by smuggling, as well as implications for dealers, had not been addressed sufficiently.

Save for one exception, the first public hearing on the new Tobacco Products Directive (TPD) at the Committee for the Environment, Public Health, and Food Safety (“ENVI”) was an event held by supporters. Corporate stakeholders were not being heard. “All opinions should be heard, and the economic implications of the Tobacco Products Directive (regulatory impact assessment) be discussed. It is only in this way that we will be able to speak of a democratic procedure“, says Rolf von Hohenhau, the TAE President. The ENVI Committee has 69 members and is the largest legislative committee of the European Parliament.

The new Tobacco Products Directive provides inter alia for verbal/pictorial warnings to cover 75 percent of the front and reverse packaging surfaces of cigarette and tobacco-fine cut packaging. Standardizing cigarette size means putting an end to Slim cigarettes. Menthol cigarettes, too, are to be eliminated concurrently. So this is the first time for the Commission to be planning for massive restrictions on the design of packaging and products for consumer goods within the EU.

TAE President Rolf von Hohenhau points out that during the ENVI Committee hearing, the serious economic consequences of the new Tobacco Products Directive were not being discussed sufficiently.

He cites as an example the threat of an increase in cigarette smuggling, and the tax-revenue losses running in the billions that will come with it. “Consumers are not going to do without their preferred products, and will be switching to illegal purchases of menthol and Slim cigarettes or chewing tobacco”, says Rolf von Hohenhau. The Section for Employment, Social Affairs and Citizenship of the European Economic and Social Committee of the EU has already concluded just recently that “tax revenues will fall, not only because of increased smuggling but also due to falling prices.”

The TAE President estimates the tax-revenue losses caused by the new TPD at an amount within the range of two-digit billions. For even now, the EU is losing more than ten billion Euros in taxes through cigarette smuggling. The top priority for legislators should be a responsible way of dealing with public money, says Taxpayers’ President Rolf von Hohenhau.

Munich/Brussels, February 25, 2013