The new Tobacco Products Directive (TPD)

At the meeting of the ENVI Committee, the Taxpayers’ Association called for a hearing of all stakeholders and an impact assessment of the regulation.

According to criticism from the European Taxpayers’ Association (TAE), the public hearing on the new Tobacco Products Directive (TPD) before the ENVI Committee was dominated almost exclusively by supporters. Negative economic consequences, such as tax losses running into the billions due to smuggling, as well as the impact on retailers, were not adequately addressed. With

one exception, the first public hearing on the TPD in the Committee on the Environment, Public Health and Food Safety (ENVI) was an event dominated by supporters. Businesses were not heard. “All views must be heard and the economic impact of the Tobacco Products Directive (impact assessment) discussed. Only then can we speak of a democratic process,” said Rolf von Hohenhau, President of the TAE. The ENVI Committee has 69 members and is the European Parliament’s largest legislative committee.

The new Tobacco Products Directive stipulates, amongst other things, that 75 per cent of the front and back of cigarette and fine-cut tobacco packets must feature verbal and pictorial health warnings. The standardisation of cigarette size spells the end for slim cigarettes. Menthol cigarettes are also to be withdrawn from the market at the same time. This marks the first time the Commission has planned such extensive restrictions on the design of packaging and consumer goods within the EU.

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

He cites as an example the looming rise in cigarette smuggling and the associated tax losses running into the billions. “Consumers will not give up their preferred products and will instead turn to illegal purchases of menthol cigarettes, slim cigarettes or chewing tobacco,” says von Hohenhau. The Section for Employment, Social Affairs and Citizenship of the European Economic and Social Committee recently concluded that “tax revenues will fall not only because of increasing smuggling, but also because of falling prices”.

The President of the Taxpayers’ Association (TAE) estimates that the tax shortfall caused by the new Tobacco Products Directive (TPD) amounts to a double-digit billion figure. The EU is already losing more than ten billion euros in tax revenue due to cigarette smuggling. The top priority for legislators must be the responsible management of public funds, according to the president of the Taxpayers’ Association, Rolf von Hohenhau.

Munich/Brussels, 25 February 2013