Why excise policy matters for harm reduction in Europe
Europe’s nicotine policy framework is entering a critical phase. Recent reporting on draft revisions to the EU Tobacco Excise Directive suggests that forthcoming tax proposals could significantly reshape the market for nicotine pouches, heated tobacco products, and other smoke-free alternatives. While excise taxation is a legitimate public-health tool, the design of tax policy matters, particularly when it affects products with substantially different risk profiles.
For stakeholders focused on reducing smoking-related disease, the current debate raises an essential question: will Europe’s tax framework support transitions away from combustible cigarettes, or will it unintentionally undermine them?
What is being proposed at EU level
According to reporting, a draft circulated under the Danish EU Council Presidency would introduce substantially higher minimum excise taxes on newer nicotine products. In the case of heated tobacco, the proposal reportedly goes well beyond earlier European Commission scenarios, combining a high specific tax per kilogram with a significant minimum percentage of retail price.
Several Member States have characterised this approach as a fundamental policy shift rather than a technical update. The proposal would move reduced-risk products closer to the tax treatment historically reserved for cigarettes, despite long-standing recognition that combustion is the primary driver of tobacco-related harm.
Implications for nicotine pouches
Nicotine pouches are particularly affected by the reported draft. High minimum tax floors and rigid product definitions could override national tax models that have supported harm-reduction outcomes, notably in Nordic and Baltic countries.
In Sweden, where oral nicotine products have contributed to historically low smoking prevalence, price increases of several euros per can have been cited as a likely outcome. This matters because price differentials strongly influence consumer behaviour. If nicotine pouches approach cigarette prices, the economic incentive for smokers to switch weakens, particularly among lower-income groups.
Evidence from tobacco control consistently shows that substitution toward lower-risk products depends not only on availability, but also on affordability relative to cigarettes. Tax frameworks that compress this price gap risk slowing or reversing progress.
Broader concerns about policy development
The reporting also raises questions about the policy development process itself. Several Member States are said to have requested impact assessments, phased implementation, and clearer evidence on behavioural effects before agreeing to sweeping tax changes. These requests appear to have been largely absent from the draft under discussion.
There are also concerns about the alignment between advocacy proposals and official draft language. For regulators, transparency matters as much as intent. Effective public-health policy depends on clear separation between evidence generation, advocacy, and legislative design. When these boundaries blur, confidence in the regulatory process can be weakened.
Why tax proportionality matters for public health
Excise taxation has long been used to reduce cigarette consumption, and there is strong evidence supporting high taxes on combustible tobacco. The challenge arises when the same logic is applied uniformly to products that do not involve combustion.
A risk-proportionate tax framework recognises that while no nicotine product is risk-free, products that eliminate smoke exposure should not be treated as equivalent to cigarettes. Uniformly high excise rates across all product categories may preserve revenue, but they do not necessarily maximise health gains.
There is also a practical concern. Excessive taxation on legal, regulated products can incentivise illicit trade, reduce product quality oversight, and push consumers back toward cigarettes or unregulated alternatives. These outcomes would be counterproductive from both health and regulatory perspectives.
What this means for the future of nicotine pouches in Europe
If adopted in its current form, the revised directive would lock in tax structures and definitions for many years, shaping the trajectory of nicotine use across the EU. The long-term consequences could include reduced switching from cigarettes, disproportionate impacts on vulnerable populations, and the erosion of national harm-reduction models that have demonstrated success.
This is not solely a fiscal debate. It is a strategic decision about how Europe balances revenue, regulation, and public-health objectives at a time when smoking remains the leading preventable cause of death.
A GINN perspective
For GINN, the developments described underscore the importance of proportionate, evidence-led regulation. Tax policy should support, not undermine, the transition away from combustible tobacco. That requires careful impact assessment, respect for national experience, and alignment with the scientific consensus on the continuum of risk.
As discussions continue, the priority should be ensuring that excise frameworks remain coherent with public-health goals: protecting youth, discouraging smoking, and enabling adult smokers to move toward demonstrably lower-risk alternatives. The coming months will be decisive in determining whether Europe’s tax policy advances or constrains those aims.
