Tobacco industry has little to fear from EU TPD proposals

The European Commission believes that its proposed revisions to the Tobacco Products Directive would, if adopted, have limited adverse impact on the tobacco industry – and some positive impacts.

“The adoption of the proposal for a revised Tobacco Products Directive was preceded by a thorough impact assessment, including an assessment of the economic impacts on the tobacco industry, their upstream suppliers (e.g. growers, ingredients suppliers, paper industry) and downstream distributors (wholesale, retail),” the commission stated in a written answer to questions posed by the Czech MEP, Ivo Strejček.

“It is estimated that the proposal will result in a reduction in the consumption of tobacco products of no more than 2 percent within a five year period following the transposition of the Directive. The adverse impact on the industry would therefore remain limited. Jobs lost in the production of cigarettes would be offset by the creation of jobs in other sectors, reflecting ex-smokers’ expenditure on such sectors.

“In addition, the proposal is expected to lead to some benefits for the industry through reduced production costs as a result of harmonization (one … production line instead of different production lines to comply with different national rules) and through the expected reduction in illicit trade (as a result of the proposed measures on tracking and tracing of products). Even the most specialized tobacco retailers do not generate more than 50 percent of their revenues from tobacco products, thus the impact is not expected to be disproportionate.”

The commission said that to avoid imposing an unnecessary burden on small- to medium-sized enterprises, pipe tobacco, cigars and cigarillos were exempted from the stricter labelling and ingredients rules that the revisions proposed for other tobacco products. The proposal, it added, was neutral in respect of the different types of tobacco, Virginia, Burley and oriental. This meant that smaller farms involved in Burley and oriental tobacco production would not be affected.