The European Taxpayers’ Association warns against unnecessary time pressure

The implementation of the EU Tobacco Products Directive poses a threat to small and medium-sized enterprises in this sector.

Ahead of tomorrow’s hearing in the German Bundestag, the European Taxpayers’ Association (TAE) is warning of the consequences of a hasty implementation of the planned tobacco products legislation.

According to EU directives, all cigarettes and roll-your-own tobacco products must be packaged in unattractive packaging and feature shocking images. Whilst it is right to deter young people from smoking, the European Taxpayers’ Association argues that an excessively tight deadline threatens the very existence of an entire sector of the economy.

Rolf von Hohenhau, President of the TAE, warns against throwing the baby out with the bathwater. So far, nobody knows what the new packaging is supposed to look like, yet the industry is expected to be able to develop, assemble and install new machinery without any problems by May. This is bureaucratic nonsense which could push the tobacco industry – which is dominated by small and medium-sized enterprises – to the brink of ruin.

The TAE fears a competitive disadvantage and a further weakening, particularly for German small and medium-sized enterprises. There are around 3,000 brands on the tobacco market with different packaging, all of which are to be converted virtually overnight. An extended transition period of 12 to 15 months is the minimum, according to Rolf von Hohenhau, who has the backing of the German Bundesrat. The Bundesrat had already called on the federal government to refrain from setting an implementation deadline that is too short.

Finance Minister Schäuble earns 17 billion euros (including VAT) annually from tobacco products. The new law will make it impossible to use common packaging such as metal tins for loose fine-cut tobacco. Additives such as menthol will be completely banned. If this were actually to lead to a reduction in smoking, one might think it would benefit public health; however, the Finance Minister would have to forego revenue running into the hundreds of millions. This revenue would be missing from the national budget.

Munich/Brussels, 16 February 2016