Navigating EU’s TPD3

By Timothy S. Donahue

Dortmund, Germany – Sept. 19, 2025 — Europe’s next wave of tobacco and nicotine regulations is coming fast. At InterTabac 2025 in Dortmund, industry leaders delivered a clear message: companies must prepare for harmonization where possible, and unpredictability where necessary, to survive the upcoming rules.

The panel session, “Navigating the TPD3, Tobacco Excise Directive and WHO FCTC COP11,” featured regulatory experts including Robert Sidebottom (Global Institute for Novel Nicotine, Arcus Compliance), Tim Phillips (Managing Director, Tamarind Intelligence), Ciprian Boboi (Founder & Board Member, Independent European Vape Alliance – IEVA), and Peter Schweinschwaller (President, European Confederation of Tobacconists – CEDT).

The discussion covered compliance, excise harmonization, retail challenges, illicit trade, and the role of harm reduction.

Combustibles Still Dominate, But Alternatives Are Growing Fast

Phillips highlighted market dynamics: novel nicotine products such as heated tobacco, vaping, and nicotine pouches now generate over $80 billion annually. In contrast, the global combustible cigarette market is worth $800 billion—ten times larger, but shrinking.

“Nicotine pouches remain the smallest category—around $7.5 to $8 billion globally—but they are also the fastest growing, expanding far beyond Nordic countries into the UK, U.S., and worldwide,” Phillips explained.

Boboi reinforced IEVA’s position: vaping and novel products should be recognized as harm-reduction tools, potentially helping 100 million smokers in Europe transition away from cigarettes. Clear regulatory differentiation between combustible and reduced-risk products, he argued, is the only sustainable approach.

Retailers Call for Stability

Retailers are on the front lines of change. Schweinschwaller, himself a tobacconist, stressed that frequent regulatory changes make investment and planning nearly impossible.

“Shops need stability,” he said. “We want to adapt and offer consumers choice—but constant rule changes undermine that.”

Compliance, Excise, and the Risk of Illicit Trade

Sidebottom and Phillips agreed that stable, long-term compliance frameworks are essential. On taxation, Phillips warned that overly high excise rates could backfire.

“Illicit trade and lack of proper regulation are bigger threats than excise itself,” he said. “If minimum EU pouch taxes are set above current national levels, the risk is markets shifting underground.”

Boboi echoed this, citing Italy’s experience where lower liquid taxes actually increased government revenue after punitive rates failed. His advice: “Don’t impose something you can’t enforce.”

Cross-border enforcement remains a problem. With bans and restrictions varying widely across the EU, consumers often travel or buy online to bypass rules. Sidebottom cautioned: “Consumers will always find a way to access products—if regulation diverges, illicit markets thrive.”

Harm Reduction: The Divided Debate

Harm reduction was a central theme. Boboi maintained that vaping and pouches should be recognized as reduced-risk alternatives. However, Phillips noted that the political climate in Brussels is currently hostile to harm reduction messaging, with governments focused more on regulation and taxation.

Still, both agreed that long-term progress depends on consumer education, clinician engagement, and responsible industry practices.

The Need for Self-Regulation

Panelists stressed that the industry must self-police to gain credibility. Sidebottom criticized youth-targeted packaging, warning it damages trust with regulators and the medical community.

Schweinschwaller called on retailers to be proactive: “Keep new products in-store, enforce strict age checks, and act responsibly even when laws are vague.”

Key Takeaways for TPD3 and Excise Directive

• Stability for Retailers: Consistent rules allow investment, training, and enforcement.

• Differentiate Reduced-Risk Products: Don’t regulate vaping and pouches like cigarettes.

• Smart Excise Policies: Excessive taxes push consumers to illicit trade; balanced rates support both revenue and harm reduction.

• Self-Regulation is Critical: The industry must lead with responsible marketing and age verification.

• Prepare for Harmonization: Expect the EU to push for tax and compliance alignment, but anticipate national-level unpredictability.