Brussels is evaluating an increase in excise duties on all tobacco products. Risks for consumers (1 euro more per package), Made in Italy supply chain and inflation. And fear is an explosion of smuggling.
European stuck on cigarettes (also electronic) coming? Brussels is evaluating an increase in excise duties on tobacco (from +139% to +258%), to make cash and help make the next European budget. The consequences for Italy will be directed for consumers (up to 1 euro more per package), but also for the production chain, Made in Italy and inflation.
The EU proposal: higher excise duties on all tobacco products
The European Commission is working on a revision of the Tobacco excise duty (TED), with record increases in taxation on cigarettes, cigars, chopped tobacco, heated tobacco products, electronic cigarettes and nicotine sachets. According to indiscretions for traditional cigarettes, it could go from 90 to 215 euros per thousand pieces, equal to an increase of 139%. Even more drastic the increase for tobacco to be rolled, which would go from 60 to 215 euros per kilogram (+258%), and for cigars, from 12 to 143 euros per thousand units, with a surge of 1,090%. And for new generation products (electronic devices and nicotine sachets) the rates would reach up to 143 euros/kg for sachets and 0.36 euros/ml for liquids with high concentration of nicotine. Why? To uniform the European regulatory framework (now fragmented, in fact, tobacco -based products have very different costs in the various countries), to strengthen the fight against tobagism, but also (especially perhaps) to collect their own resources for the EU budget and for reimbursements related to the recovery fund.
Effects on Italian consumers: increases, inflation and smuggling
For Italian smokers, the stangata would translate into a dry increase of at least one euro per package, with increases over 20% for cigarettes and heated tobacco products. A price jump never recorded before. Economy Minister Giancarlo Giorgetti has already expressed its opposition to Brussels, highlighting how the current tax structure has contributed to making Italy a European model in the fight against smuggling: only 1.8% of cigarettes in Italy come from illegal trafficking, against an EU average of 10% and peaks of 38% in France. Such an increase could relaunch the black market. In addition, an intervention on the excise duties of this entity could cause an increase in general inflation of at least 0.5 percentage points, affecting the purchasing power of citizens, Italians and European in general.
Italian supply chain under pressure and exports at risk
In addition to consumers to pay the price it could then be the Italian tobacco chain, the most important in Europe for investments, innovation and exports. In Italy about 14 thousand farmers operate, concentrated above all in Campania, Veneto and Umbria, and over 30 thousand tons of raw tobacco are produced every year. The Italian export of heated tobacco products reached the value of almost 2 billion euros in 2023, of which over 800 million directed to other European countries. A generalized surge in excise duties, even in destination markets, risks compromising the competitiveness of these Made in Italy products, with repercussions on the industrial and employment fabric. For this Italy, Greece and Romania asked Brussels to maintain a separate tax regime for alternative products, but at the moment the prevailing line seems to be that of a uniform application and without derogations.