Tobacco Lobby Urges More Dialogue With EU Officials on Tax Bill

The tobacco industry’s insistence on having a greater say in an EU proposal to double tax rates on cigarettes is facing pushback from the European Commission, which says keeping the industry at arm’s length is justified.

The commission follows the UN Framework Convention on Tobacco Control, which applies strict rules on protecting public officials from the tobacco lobby. That means keeping meetings at a minimum and publishing records that describe the contents of the meetings that take place.

“European institutions in the past have set limitations for European politicians to interact with the sector,” EU tax chief Wopke Hoekstra said in an interview. “And from my perspective, rightfully so.”

Tobacco companies are warning the EU that excluding them from the legislative process will lead to bad policy, fraud and lower revenue.

Tobacco Europe, a trade association representing firms including British American Tobacco Plc and Imperial Brands Plc, said it hadn’t been consulted while the European Commission was preparing the legislation.

The group “regrets the absence of opportunities beyond formal public consultation processes to bring its contribution transparently and constructively,” Nathalie Darge, its secretary general, wrote in an email.

The commission proposed the Tobacco Excise Directive in July, which would more than double minimum tax rates on cigarettes across the bloc and introduce new taxes on products like e-cigarettes and nicotine pouches.

Hoekstra said the tobacco industry had the opportunity to provide comments through a public consultation on the bill that was launched in September and closed Oct. 31.

But the industry says that isn’t sufficient, especially since it’s unclear whether the consultation would prompt the commission to change the legislation after it has already been published.

Hoekstra accused tobacco companies of helping governments “produce letters that are then being sent to the European Union full of bogus argumentation.”

Tobacco Europe said it works “in full compliance with all applicable rules, ensuring our interactions with EU institutions and stakeholders are transparent, properly disclosed, and responsibly undertaken.”

Representatives of the industry have met commission officials this year, including the financial services and environment commissioners, Maria Luis Albuquerque and Jessika Roswall. They haven’t met with Hoekstra, according to the EU’s Transparency Register.

Hoekstra has played a central role in publishing the tobacco tax bill.

Countries Divided

Countries are divided on the proposal, with many voicing concern over high rates on new products, smuggling, and the length of the transition period between current rates and the proposed ones.

Tobacco companies argue that their expertise is necessary to ensure the law will be sound, but Hoekstra has called the industry “merchants of doubt.”

Darge said the claim was “a new attempt to avoid the substantive debate on the European Commission’s proposal, which should be the core of the discussion.”

Gijs Van Wijk, policy and communications officer for Smoke Free Partnership, a tobacco control nonprofit, argued against greater involvement from the industry.

“Allowing tobacco companies access to policymakers has historically led to interference that weakens, delays, or blocks life-saving measures such as higher tobacco taxes, advertising bans, and plain packaging,” he said in a statement.

Given that smoking kills 700,000 people in Europe every year, “giving this industry access to policymakers, even under the pretext of dialogue or ‘stakeholder consultation’, risks legitimising their influence and allowing them to shape policy environments to their commercial advantage,” he said.

Citing the UN framework rules, he said industry shouldn’t have access to policy makers “beyond what is absolutely required for regulatory compliance.”

Massimo Andolina, Philip Morris International Inc.'s president for the Europe region, said in an interview last month that the EU was applying “all possible ways to keep the industry away from the table.”

“I don’t think that speaks for the type of public-private collaboration that Mario Draghi is advocating,” he added, referring to the former Italian prime minister’s report on making Europe more competitive, which recommended increased public-private collaboration.

Darge said the lack of consultation has meant “several gaps” in the legislation, “including insufficient analysis of illicit trade, inaccurate data on price elasticity, and little consideration for parts of the supply chain.”