Brussels – Europe develops alternatives to traditional smoking. That is the hope of the European Policy Innovation Council (EPIC) think tank, which today published the report titled “The End of Smoking? How Europe can save millions of lives while promoting economic growth.” The study outlines the economic impact of the tobacco value chain at the European level and offers a pragmatic viewpoint on regulation that can mitigate the harms caused by smoking.
Given that tobacco and nicotine users will not disappear overnight, according to the author, Antonios Nestoras, founder and CEO of the European Policy Innovation Council, Europe should encourage the adoption of safer alternatives to traditional smoking. This approach would achieve three goals: to preserve the economic contribution of a fully Made in Europe industry; to improve public health through a regulatory framework that balances harm reduction with the need to phase out the most harmful tobacco products, such as cigarettes; and to prevent market invasion by illicit products with low safety standards, mainly from China.
The economic impact of tobacco in Europe
At the European level, the tobacco sector contributes €223.7 billion a year to GDP, or 1.3 per cent of the European Union’s total GDP. Total annual tax revenues from tobacco amount to €112.9 billion (a figure equivalent to 55.4 per cent of current total EU defence spending). The industry directly and indirectly employs more than 2.1 million people, with a wage bill of more than €60 billion.
The illegal market
Due to the illegal cigarette market, €11.6 billion is lost annually, accounting for 8.3 per cent of total consumption. These financial losses could be used to increase public research and development activities in all EU member states by 52.5 per cent, thereby improving innovation and progress in Europe.
The report shows how incentivising investment in less harmful alternatives to traditional smoking can be an effective strategy for reducing its health impact, maintaining the economic contribution of an all-European supply chain, and countering the illicit market for low-quality products.
In relation to the European Commission’s review of the Tobacco Products Directive (TPD) and the Tobacco Taxation Directive (2011/64/EU), the report points out that taking extreme measures could undermine the competitiveness of the European market, benefiting foreign competitors such as China and encouraging the expansion of the illicit market.
Hence, the call for institutions to adopt a regulatory framework aimed at safeguarding the entire European tobacco value chain and its more than 2.1 million jobs.
