EU directive revisions threaten jobs, the economy and tax revenues

| July 15, 2013

The European economic and social committee (EESC) has said that changes to the EU’s Tobacco Products Directive proposed by the European Commission would have serious consequences for jobs, the economy and tax revenues.

The committee adopted an opinion on the commission’s review of the directive following what was described as a heated debate at its July 10-11 plenary session.

In a press note, the committee said the tobacco sector employed almost 1.5 million people in the EU; it promoted rural and economic development and was one of the few major export sectors still to maintain a positive balance, both at the EU level and in many member states.

“The EESC today argued that the changes proposed by the Commission would have serious consequences for jobs, the economy and tax revenues, thereby breaching other fundamental EU objectives such as full employment and restored growth,” the committee’s press note said. “However, the European Economic and Social Committee is also fully aware of the risks that tobacco poses to public health. It is crucial that health takes priority over all economic considerations, though skepticism remains on how effectively the European Commission’s proposed measures help the gradual process of quitting.

“The Committee stresses the importance of school-based educational and counseling strategies at EU level to ensure that every child or young person is informed of the realities of smoking and its harmful effects. It is strongly in favor of promoting public education and awareness-raising campaigns concerning the serious health effects of exposure to environmental tobacco smoke.”

Disease prevention should not be neglected, said José Isaías Rodríguez García-Caro, rapporteur of the EESC opinion on “Manufacture, presentation and sale of tobacco and related products.” “However, as a player of the internal market, tobacco also involves jobs and the industry,” he said. “Health and economic considerations must both be considered.”

The press note made the point that tobacco production contributed to rural employment. “The current tobacco leaf harvest in the EU amounts to 250,000 tonnes of tobacco per year and provides employment to 400,000 people,” the note said. “The EESC acknowledges the threat that may be caused to employment in agricultural areas where no other alternatives have been developed and where CAP [Common Agricultural Policy] subsidies are no longer available. The cohesion and structural funds, regional funds and funds for research and innovation should be used effectively to minimize these labor market risks and implement training schemes for workers, together with scientific, technical and innovation support for enterprises and farms.

“The EESC notes that the proposal on the inclusion of health warnings, covering 75 percent of both faces of the cigarette pack, together with the new text covering 50 percent of the sides, is not based on definitive scientific evidence. In addition, this change in packaging may threaten jobs in the packaging industry, which remains a sector of great economic importance in several European countries. It would also undermine the legitimate intellectual and industrial rights of manufacturers to use their registered trademarks.

“According to the EESC, allowing differentiation only on the basis of price will reduce the attractiveness of producing high-quality tobacco in the EU, since all products will end up almost the same. Standardizing format and taste could likely lead to an increase in tobacco smuggling, satisfying public demand through unregulated channels. Member state tax authorities already lose 10 billion euro in tobacco tax receipts every year. In addition, the absence of any quality control of such products will severely compromise consumer safety.”

Category: Breaking News

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