TABLE OF CONTENT

1. Introduction.................................................................................................................................................................. 1

1.1. Context....................................................................................................................................................................... 1

1.2. Application, implementation & enforcement of the current TPD and notifications from MS 2

1.2.1. Content of the existing TPD............................................................................................................................. 2

1.2.2. Application of the TPD..................................................................................................................................... 3

1.2.3. Implementation of the TPD.............................................................................................................................. 4

1.2.4. Enforcement of the TPD and legal challenges............................................................................................. 4

1.2.5. Notifications........................................................................................................................................................ 5

1.3. Consultations, expertise and other input.......................................................................................... 5

1.4. Impact Assessment Board.............................................................................................................................. 8

2. PROBLEM DEFINITION..................................................................................................................................................... 9

2.1. Market description............................................................................................................................................ 9

2.1.1. Tobacco products market................................................................................................................................. 9

2.1.2. The role of tobacco in the society................................................................................................................. 15

2.1.3. Non-tobacco products..................................................................................................................................... 16

2.1.4. Regulatory framework.................................................................................................................................... 19

2.2. Problem identification.................................................................................................................................. 22

2.2.1. Problem 1: Smokeless tobacco and extension of the product scope..................................................... 23

2.2.2. Problem 2: Packaging and labelling........................................................................................................... 30

2.2.3. Problem 3: Ingredients................................................................................................................................... 34

2.2.4. Problem 4: Cross-border distance sales...................................................................................................... 37

2.2.5. Problem 5: Traceability and security features........................................................................................... 39

2.3. Baseline scenario............................................................................................................................................... 40

2.3.1. Development of the market............................................................................................................................ 40

2.3.2. Development in Member States..................................................................................................................... 41

2.3.3. The demand side............................................................................................................................................... 43

2.4. EU Basis to act..................................................................................................................................................... 44

2.4.1. Legal basis......................................................................................................................................................... 44

2.4.2. Subsidiarity....................................................................................................................................................... 46

2.4.3. Proportionality................................................................................................................................................. 47

3. POLICY OBJECTIVES...................................................................................................................................................... 47

4. POLICY OPTIONS............................................................................................................................................................. 49

4.1. Discarded policy Areas.................................................................................................................................. 50

4.2. Problem 1a – Smokeless tobacco products (STP)........................................................................... 51

4.3. Problem 1B – Nicotine containing products (NCP).......................................................................... 53

4.4. Problem 1C – Herbal products for smoking...................................................................................... 54

4.5. Problem 2 – Packaging and labelling................................................................................................... 55

4.6. Problem 3 – Ingredients................................................................................................................................... 56

4.7. Problem 4 – Cross-Border distance sales of tobacco products......................................... 57

4.8. Problem 5 – Traceability and security features.......................................................................... 58

5. ANALYSIS OF IMPACTS................................................................................................................................................. 58

5.1. Assessment of policy option 0: No change.......................................................................................... 60

5.1.1. Economic impacts............................................................................................................................................ 60

5.1.2. Social impacts................................................................................................................................................... 62

5.1.3. Health impacts.................................................................................................................................................. 62

5.2. Smokeless tobacco products and extension of the product scope................................. 62

5.2.1. Smokeless tobacco products (STP)............................................................................................................... 62

5.2.2. Nicotine containing products (NCP)............................................................................................................ 77

5.2.3. Herbal products for smoking......................................................................................................................... 85

5.3. Packaging and labelling.............................................................................................................................. 87

5.3.1. PO1: Mandatory enlarged picture warnings............................................................................................. 87

5.3.2. PO2: PO1 & harmonise certain aspects of packets/prohibit promotional & misleading elements 91

5.3.3. PO3: PO2 plus full plain packaging............................................................................................................ 93

5.3.4. The views of stakeholders............................................................................................................................... 96

5.3.5. Comparing the options and preferred option............................................................................................ 96

5.4. Reporting and regulation of ingredients.......................................................................................... 98

5.4.1. PO1: Voluntary reporting. Prohibit toxic, addictive and attractive additives in tobacco products. 98

5.4.2. PO2: Reporting. Prohibit products w/characterising flavour/increased toxicity/addictiveness.... 99

5.4.3. PO3: Mandatory reporting. Prohibit all additives not essential for manufacturing...................... 102

5.4.4. The views of stakeholders............................................................................................................................ 104

5.4.5. Comparing the options and preferred option.......................................................................................... 104

5.5. Cross-border distance sales of tobacco......................................................................................... 105

5.5.1. PO1: Notification and age verification system........................................................................................ 105

5.5.2. PO2: Prohibit cross border distance sales of tobacco products.......................................................... 107

5.5.3. The views of stakeholders............................................................................................................................ 107

5.5.4. Comparing the options and preferred option.......................................................................................... 108

5.6. Traceability and security features................................................................................................... 109

5.6.1. PO1: EU tracking and tracing system....................................................................................................... 109

5.6.2. PO2: Tracking and tracing system, complemented by security features............................................ 111

5.6.3. The views of stakeholders............................................................................................................................ 112

5.7. Indirect effects / health impacts......................................................................................................... 113

5.7.1. Economic Stakeholders................................................................................................................................ 116

5.7.2. Governments/society..................................................................................................................................... 116

6. OVERALL CONCLUSION OF THE IMPACT ASSESSMENT............................................................................... 118

6.1. Comparing the options and the preferred options.................................................................... 118

6.2. Overall impacts of the preferred options...................................................................................... 121

6.2.1. Internal market.............................................................................................................................................. 121

6.2.2. Economic stakeholders................................................................................................................................ 122

6.2.3. Employment.................................................................................................................................................... 124

6.2.4. Governments/Society..................................................................................................................................... 124

7. MONITORING AND EVALUATION............................................................................................................................ 125

ANNEXES TO THE IMPACT ASSESSMENT:

Annex 1: Outcome of consultations and stakeholders' opinions

Annex 2: Market description, manufacturing and the role of tobacco in the society

Annex 3: Regulatory framework, developments in Member States and at international level

Annex 4: Assessment criteria and comparison of options

Annex 5: Socioeconomic impacts of the options

ABBREVIATIONS USED IN THE IMPACT ASSESSMENT

ENDS Electronic Nicotine Delivery System

FCTC WHO Framework Convention on Tobacco Control

FMC Factory Manufactured Cigarettes

NCP Nicotine Containing Products

NRT Nicotine Replacement Therapy

PA Policy Area

PO Policy Option

PoS Point of Sale

RYO Roll-Your-Own tobacco

STP Smokeless Tobacco Products

SKU Stock Keeping Unit

TEU Treaty of the European Union

TFEU Treaty on the Functioning of the European Union

TNCO Tar, nicotine and carbon monoxide

TPD Tobacco Products Directive

TVM Tobacco Vending Machine

WHO World Health Organisation

WTO World Trade Organisation

GLOSSARY OF TERMS[1]

Additive – substance contained in a tobacco product, its unit packet or its outside packaging with the exception of tobacco leaves and other natural or unprocessed parts of tobacco plants.

Characterising flavour - a distinguishable aroma or taste other than tobacco, resulting from an additive or combination of additives, including but not limited to fruit, spice, herb, alcohol, candy, menthol or vanilla observable before or upon intended use of the tobacco product;

'Cheap whites / illicit whites' - cigarettes produced (often legitimately) in their country of origin at very low cost, destined to be illicitly sold in other jurisdictions and not respecting the legal requirements in the jurisdiction of destination.

Chewing tobacco - a smokeless tobacco product exclusively designed for the purpose of chewing.

Cigar - a roll of tobacco consumed via a combustion process and further defined in Article 4(1) of Council Directive 2011/64/EU of 21 June 2011 on the structure and rates of excise duty applied to manufactured tobacco.

Cigarette – a roll of tobacco consumed via a combustion process and further defined in Article 3(1) of Council Directive 2011/64/EU.

Cigarillo – a small type of cigar with a diameter of up to 8 mm.

Contraband - products which have been diverted into illicit trade, not respecting the legal requirements in the jurisdiction of destination.

Counterfeit –brand protected products which have been falsified without consent of the brand owner and are not respecting the legal requirements in the jurisdiction of destination.

Electronic cigarette (Electronic Nicotine Delivery Systems, ENDS) – electronic device typically consisting of a mouth piece (containing an electronic evaporator) and a cartridge (typically replaceable) and designed to deliver nicotine to the lung through inhalation of a mixture of air & vapours into the respiratory system.

Factory manufactured cigarette (FMC) – a cigarette, produced by a tobacco manufacturer, capable of being smoked as such.

FCTC commitments –political commitments to implement the non-binding guidelines developed under the FCTC to assist Parties in meeting their implementation obligations under the FCTC.

FCTC obligations – obligations to implement the legally binding FCTC and the Illicit Trade Protocol .

Flavouring – an additive that imparts aroma and/or taste.

Herbal products for smoking – a product based on plants or herbs which contains no tobacco and is consumed via a combustion process.

Ingredient – an additive, tobacco (leaves and other natural, processed or unprocessed parts of tobacco plants including expanded and reconstituted tobacco), as well as any substance present in a finished tobacco product including paper, filter, inks, capsules and adhesives.

Illicit trade – any practice or conduct prohibited by law and which relates to production, shipment, receipt, possession, distribution, sale or purchase, including any practice or conduct intended to facilitate such activity.

Nasal tobacco - a smokeless tobacco product consumed via the nose.

Nicotine containing products (NCP) – a product usable for consumption by final consumers via inhalation, ingestion or in other forms and to which nicotine is either added during the manufacturing process or self-administered by the user before or during consumption.

Nicotine Replacement Therapies (NRT) - remedial administration of nicotine to the body by means other than tobacco, usually authorised under the pharmaceutical legislation as part of smoking cessation. Common forms of nicotine replacement therapy are nicotine patches and nicotine gum.

Novel tobacco product - a tobacco product other than a cigarette, roll-your-own tobacco, pipe tobacco, water-pipe tobacco, cigar, cigarillo, chewing tobacco, nasal tobacco or tobacco for oral use placed on the market after entry into force of the Directive.

Pipe tobacco – tobacco consumed via a combustion process and exclusively designed for the purpose of being used in a pipe.

Plain packaging – full standardisation of the packages, including brand- and product names printed in a mandated size, font and colour on a given place of the package; standardised package colour; standardised size and appearance of the package; display of required (textual and pictorial) health warnings and other legally mandated product information, such as tax-paid stamps and marking for traceability and security purposes.

Promotional / Misleading element – any element promoting a tobacco product by a means that is false, misleading, deceptive or likely to create an erroneous impression about its characteristics, health effects, hazards or emissions, any element suggesting that a tobacco product is less harmful than others or has vitalising, energetic or other positive health effects, any element referring to flavour or taste or the absence thereof, or any elements resembling a food product. Such elements can take the form (but are not limited to) texts, signs, pictures or other graphical elements, references to natural or biological characteristics or to certain flavours or flavourings or other additives, inserts and other additional material, e.g. adhesive labels, stickers, onserts, scratch-offs, sleeves.

Roll-your own tobacco (RYO) – tobacco which can be used for making cigarettes by final consumers or retail outlets.

Smokeless tobacco products (STP) – a tobacco product not involving a combustion process, including tobacco for oral use.

Tobacco for oral use/oral tobacco - all products for oral use, except those intended to be inhaled or chewed, made wholly or partly of tobacco, in powder or in particulate form or in any combination of those forms, particularly those presented in sachet portions or porous sachets.

Traditional use – Continuous use of a smokeless tobacco product in a Member State or part thereof for at least 30 years.

MAIN REPORTS/STUDIES USED FOR THE IMPACT ASSESSMENT

· First Report on the Application of the Tobacco Products Directive. COM(2005) 339 final (First Application Report 2005)

· Second Report on the Application of the Tobacco Products Directive. COM(2007) 754 final (Second application Report 2007): http://ec.europa.eu/health/ph_determinants/life_style/Tobacco/Documents/tobacco_products_en.pdf

· Report on the public consultation on the possible revision of the Tobacco Products Directive 2001/37/EC, European Commission, Health and Consumer Directorate-General, July 2011 (Public consultation Report 2011):

http://ec.europa.eu/health/tobacco/consultations/tobacco_cons_01_en.htm

· Commission Staff Working Document of 23.11.09: Report on the Implementation of the Council Recommendation of 2 December 2002 on the prevention of smoking and on initiatives to improve tobacco control (2003/54/EC) (Commission Staff Working Document 2009): http://ec.europa.eu/health/ph_determinants/life_style/Tobacco/Documents/tobacco_report09_en.pdf

· SCENIHR. Health effects of smokeless tobacco products. 6 February 2008 (SCENIHR 2008):

http://ec.europa.eu/health/ph_risk/committees/04_scenihr/docs/scenihr_o_013.pdf

· SCENIHR. Addictiveness and attractiveness of Tobacco Additives. 12 November 2010 (SCENIHR 2010):

http://ec.europa.eu/health/scientific_committees/emerging/docs/scenihr_o_031.pdf

· Special Eurobarometer 332; 2010 (Eurobarometer 2010):

http://ec.europa.eu/health/tobacco/docs/ebs332_en.pdf

· Special Eurobarometer 385, 2012 (Eurobarometer 2012) : http://ec.europa.eu/health/eurobarometers/index_en.htm

· GHK. A study on liability and the health costs of smoking (2008/C6/046) as revised 2012 (GHK 2012): http://ec.europa.eu/health/tobacco/docs/tobacco_liability_en.pdf

· Rand Europe. Assessing the impacts of revising the Tobacco Products Directive. TR-823-EC. September 2010 (RAND 2010): http://ec.europa.eu/health/tobacco/docs/tobacco_ia_rand_en.pdf

· Rand Europe. Availability, accessibility, usage & regulatory environment for novel & emerging tobacco, nicotine or related products. Rand Europe. 2012 (RAND 2012)

· Matrix insight. Economic analysis of the EU market of tobacco, nicotine & related products 2012 (Matrix 2012)

1. Introduction 1.1. Context

Directive 2001/37/EC of the European Parliament and of the Council on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products (Tobacco Products Directive, hereafter TPD), was adopted on 5 June 2001.[2]

More than ten years have passed since the adoption of the TPD. In line with market, scientific and international developments it has become necessary to update and complete the TPD. A revision is explicitly foreseen in Article 11 of the current TPD and was repeatedly called for by the Council and the European Parliament[3]. The initiative to revise the TPD is included in the Commission's Work Plan 2012.[4]

The overall objective of the revision is to improve the functioning of the internal market. In particular, the proposal aims to:

Update already harmonised areas to overcome Member States' obstacles to bring their national legislations in line with new market, scientific and international developments.[5]

Address product related measures not yet covered by the TPD insofar as heterogeneous development in Member States has led to, or is likely to lead to, fragmentation of the internal market.[6]

Ensure that certain provisions of the TPD are not circumvented by placing on the market of products not compliant with the TPD.[7]

It is also important to ensure a harmonised implementation of FCTC obligations and a consistent approach to non-binding FCTC commitments if there is a risk of diverging national transposition.

In line with Article 114(3) TFEU a high level of health protection has been taken as a basis for this impact assessment when choosing between different policy options. In this context, the revision seeks to regulate tobacco products in a way that reflects their specific characteristics (nicotine has addictive properties) and the negative consequences of their consumption (health risks such as various cancer types, cardiovascular problems, increased risk of blindness, impotence, lower fertility, impact on the unborn child etc.). Their treatment costs more than 25 bEUR per year. Furthermore, tobacco is the most significant cause of premature deaths in the EU, responsible for almost 700,000 deaths every year (see section 2.1.2). The revision focuses on initiation of tobacco consumption, in particular by young people, taking into account that 70% of the smokers start before the age of 18 and 94% before the age of 25 years[8]. This is also reflected in the selection and focus of the policy areas proposed and the products primarily targeted (FMC, RYO and STP).

From a broader perspective, the revision will contribute to the overall aim of the EU to promote the well-being of its people (TEU Article 3) and the Europe 2020 strategy as keeping people healthy and active longer, and helping people to prevent avoidable diseases and premature death, will have a positive impact on productivity and competitiveness. An unintended, but welcome side effect of the measures against trade of products not complying with the requirements of the TPD might be that the tax revenues of Member States are better protected as the products often also circumvent national tax legislations.

The revision of the TPD focuses on five policy areas: (1) STP[9] and extension of the product scope (i.e. NCP and herbal products for smoking), (2) packaging & labelling, (3) ingredients/additives, (4) cross-border distance sales and (5) traceability and security features. When preparing this impact assessment report economic, legal and scientific considerations were taken into account. Particular attention was given to the Fundamental Rights Charter and international obligations (FCTC, WTO-TRIPS, TBT).[10]

This impact assessment report presents the analysis and all relevant results of the impact assessment work. Due to space limitations, citations are limited to key publications and, as appropriate, relevant studies illustrating the current evidence base. More detailed information and supporting materials are also included in the five technical annexes accompanying the main report. The first four annexes provide more detailed information on stakeholders' views, the tobacco market, the regulatory framework and the assessment criteria used when assessing the impacts as well as scoring tables. Annex 5 outlines the socio economic impacts and explains in detail how a reduction in tobacco consumption will impact on stakeholders (indirect impacts).

1.2. Application, implementation and enforcement of the current TPD and notifications from Member States 1.1.1. Content of the existing TPD

The existing TPD was adopted to recast two previous internal market Directives.[11] According to its Article 1, the TPD aims at approximating certain national rules regarding tobacco products, e.g. tar, nicotine and carbon monoxide (TNCO), health warnings, ingredients and misleading description of tobacco products. The current TPD is limited to products containing tobacco (i.e. NCPs and herbal products for smoking are not subject to the TPD). It applies to all categories of tobacco: FMC, RYO, pipe tobacco, cigars, cigarillos, STP and other forms of tobacco.

Article 3 of the TPD sets the maximum levels for tar, nicotine and carbon monoxide (TNCO) and Article 4 explains how the TNCO levels should be measured. Regarding ingredients, Article 6 foresees reporting obligations for the industry (including available data on toxicology and addictiveness). Article 12 invites the Commission to submit a common list of ingredients authorised for tobacco products. The Commission has not suggested such a list taking into account a shift in regulatory priorities, including in the context of the FCTC and the adoption of partial guidelines on ingredients related to attractiveness.

Article 5 contains labelling requirements. It stipulates that all tobacco products except STP must carry a general health warning, (e.g. "Smoking kills"), covering not less than 30% of the front side, and a specific text warning (e.g. "Smoking causes fatal lung cancer"), covering not less than 40% of the back side.[12] The TPD also requires that all STP carry a health warning ("This tobacco product can damage your health and is addictive."). Moreover, the TPD empowers the Commission to adopt rules for the use of additional pictorial warnings that Member States have to comply with if they decide to require those warnings. In addition, the packages should display the levels of tar, nicotine and carbon monoxide (TNCO). Article 7 of the TPD prohibits the use of trademarks and texts suggesting that a particular product is less harmful than others (e.g. "mild" or "light"). To ensure product identification and traceability, the tobacco products should be marked by batch numbering enabling the place and time of manufacture to be determined (Article 5 (9) TPD). The Commission was invited to provide technical details, but has not responded to the invitation in the light of new international developments the Commission concluded that the information on time and location of manufacturing was not sufficient to ensure full traceability and reduce illicit trade effectively.

Article 8 prohibits the placing on the market of oral tobacco (snus) outside Sweden.

Articles 9, 10 and 11 of the TPD contain comitology provisions and reporting obligations. Article 13 sets out the conditions under which Member States can take stricter provisions.

1.1.2. Application of the TPD

Article 11 of the current TPD requires that the Commission reports regularly on the application of the Directive. Two such reports have been issued, a first one in July 2005 and a second one in November 2007.[13] Subsequent reports were not issued in the light of the pending revision/impact assessment process.

The First Report on the Application of the TPD concluded that the Commission should consider further the development of labelling, such as the wider use of quit line telephone numbers. As regards reporting of ingredients, it was stressed that Article 6 on the reporting of ingredients needs to be developed, that information transmitted from the industry varies greatly and that there is lack of capacity to analyse the data.

In its Second Report on the Application of the TPD, the Commission concluded that it should examine the possibilities with regard to an increased size of the warnings, mandatory pictorial warnings on both sides of the packets and the replacement of TNCO levels by other information. The Commission also stressed that it should explore the possibilities of generic standardised packaging. As regards reporting of ingredients, the report refers to the wish from a number of Member States and the industry to make the formats developed on a voluntary basis compulsory throughout the EU. In terms of oral tobacco, it was concluded that the scientific opinion on the health effects of STP (SCENIHR 2008)[14] should form the scientific basis for any future risk management decision of the Commission. In addition, it was concluded in the report that new tobacco and/or nicotine products should be studied with a view to ensure proper regulation. Both reports have provided input to the current impact assessment. Both reports also covered Article 12 of the TPD on ingredients. For the reasons outlined above, not concrete follow-up was given to this provision.

1.1.3. Implementation of the TPD

Member States have transposed the existing TPD and the Commission has used its powers to adopt rules for the use of colour photographs and other illustrations and to amend the textual health warnings in line with scientific and technical progress.[15] However, the Commission has not made use of its powers to adopt measures for identification and traceability purposes nor has the Commission responded to the invitation from legislators to develop a common list of ingredients.

1.1.4. Enforcement of the TPD and legal challenges

In general, enforcement of the TPD has not been seen as a problem and only a limited number of infringement procedures have been launched. However, the current TPD is unclear as regards to the level of harmonisation. While Article 5(5) allows Member States a degree of discretion to adapt the labelling of tobacco products to the requirement of public health protection, Article 13(1) stipulates that they cannot, for considerations relating to health warnings, prohibit or restrict the import of tobacco products complying with the TPD provisions. This Article has been subject to several consultations of the Commission's Legal Service.[16] The current situation implies that Member States are allowed to take certain actions, but only for domestically produced products while they cannot impose the same requirements on imported products.[17] This does not make sense in a globalised market such as the tobacco market and - taking in account the significant cross border trade - can easily result in production moving to countries where less stringent rules are required. Only a revision can address these shortcomings. In addition, the development of the internet as a distribution channel for tobacco products and the definition of “oral tobacco” represent particular challenges in terms of enforcement.[18] Also the current requirement for rotation of the health warnings has been subject to different interpretation and needs to be clarified.

The current TPD has been subject to several legal challenges since its entering into force. In 2001 British American Tobacco (BAT) and Imperial Tobacco, initiated legal proceedings in the British Courts on the validity and interpretation of the Directive. The case was referred to the ECJ (Case 491/01).[19] The companies argued that the legal basis for the directive (Article 95 TEC, current article 114 TFEU) was inadequate, because it was a public health measure being introduced as an internal market measure. The companies also argued that the introduction of Article 133 TEC as a second legal basis invalidated the directive. The principles of proportionality and subsidiarity were also claimed to have been infringed. They also argued that the labelling provisions for yields and larger health warnings, and the ban on misleading descriptors breached trade mark and intellectual property rights, as well as being an infringement of the obligation to give reasons. In 2002, the Court upheld the validity of the Directive and confirmed the validity of its provisions.[20]

The directive’s ban on the marketing of certain types of oral tobacco (snus) has also been challenged (Cases C-434/02 and C- 210/03).[21] These challenges were brought by Swedish Match, a manufacturer of oral tobacco (snus), against the UK government, and a German wholesaler who brought a case against the German government. They claimed that the directive was in breach of the rules laid down in Articles 95, 133 and 253 TEC. A claim was also made that the ban on oral tobacco was a breach of the principle of subsidiarity. They also alleged the directives' provision to constitute a restriction as referred to in Articles 28 and 29 TEC which prohibits quantitative restrictions in trade between Member States. One of the claimants also alleged that the ban was in breach of the principle of the freedom to pursue an occupation. Also in this case, the Court rejected the arguments and upheld the validity of the directive.

1.1.5. Notifications

A large number of notifications under Directive 98/34/EC[22] have been received from Member States in the area of tobacco including on pictorial health warnings, the maximum number of FMC sticks in the package, display of quit lines on the package, regulations on ingredients and rules for herbal products for smoking. In addition, fourteen RAPEX notifications have been received so far regarding electronic cigarettes (17 December 2012).[23]

1.3. Consultations, expertise and other input

Stakeholder consultations

A public consultation was held between 24 September and 17 December 2010. The Commission received more than 85,000 contributions from a wide range of stakeholders. Citizen contributions accounted for 96% of the survey response, 57% of which are “duplicate”/repeated responses[24] which appear to be the result of several citizen mobilisation campaigns that took place in some Member States.[25] The actions and efforts of these campaigns seem to have affected the overall quantitative data of the public consultation, which indicates that most of the citizens responding to the consultation were against changes to the TPD. This outcome deviates significantly from the latest Eurobarometer survey,[26] published in May 2012. Unlike public consultations, it is important to note that respondents in a Eurobarometer survey are selected randomly. Member States representatives and - even more so - health NGOs favour the introduction of strict tobacco control measures, while tobacco industry and retailers are against some of the stricter measures (for more details, see Annex 1 and separate sections under the assessment of each policy area). A report presenting the outcome of the consultation was published on 27 July 2011 and contributions have been published online.[27]

Targeted discussions with stakeholders took place throughout the revision process. A first exchange of views with health NGOs, tobacco- and pharmaceutical industries took place on 3 and 4 December 2009 and on 19 and 20 October 2010 and discussions with NGOs, growers, FMC producers, other tobacco producers, distributors of tobacco products and upstream suppliers of tobacco products have continued throughout 2011 and 2012.[28]A number of written contributions were also received, which were carefully considered in assessing the impacts of different policy options. In particular, the criticism received in relation to the external study from RAND Europe (see below) was taken into account. Alternative data submitted by stakeholders was also carefully studied. The Commissioner for Health and Consumer Policy met with Health NGOs and economic stakeholders in February-March 2012.[29] The revision of TPD has also been discussed regularly in the TPD Regulatory Committee from 2009 to 2012.[30]

The policy area "traceability and security features" was added to the revision in response to concerns put forward by some stakeholders that the selling of contraband and counterfeit products not complying with the requirements of TPD is already today a significant problem.[31] For the purpose of this Directive the main concerns associated with illicit products is that these products are non-compliant with the safeguards of the TPD. A more detailed summary of stakeholders' positions in the context of the consultations can be found in Annex 1.

Inter Service Steering Group (ISSG)

An Inter Service Steering Group (ISSG) was established in March 2009 to support the work of DG SANCO. The following services were invited: SG, SJ, AIDCO, AGRI, COMP, DEV, EAC, ECFIN, ECHO, ELARG, EMPL, ENTR, ENV, MARE, INFSO, JLS, JRC, MARKT, OLAF, REGIO, RELEX, RTD, TAXUD, TRADE and TREN.[32] The Group held 8 meetings: 5 March 2009, 26 November 2009, 2 July 2010, 18 April 2011, 3 October 2011, 1 March (information meeting and hand-out of draft Impact Assessment Report), 12 March 2012 and 19 July 2012. A meeting with associated services also took place on 30 November to present the legal proposal in the context of the inter-service consultation.

Expertise and input

A number of external studies have been commissioned to provide input to this impact assessment. First, a study on liability and the health costs of smoking was presented in December 2009. This study provided valuable input as far as the socioeconomic impacts of tobacco control policies are concerned. An updated version of this study was prepared in 2012.[33] Second, a study assessing the impacts of revising the TPD was presented in September 2010.[34] This report (by RAND Europe) was criticised by many stakeholders for its actual and perceived inaccuracies. In this respect, it is important to stress that this study has provided input to, but has not formed the exclusive basis of this impact assessment. The information was verified on the basis of other sources. Third, a study on novel and emerging tobacco, nicotine or related products was commissioned in 2010.[35] Fourth, a study on the economics of the EU market of tobacco, nicotine and related products was commissioned in September 2011 to fill some remaining data gaps.[36]

The Commission’s independent Scientific Committee on Emerging and Newly Identified Health Risks (SCENIHR) has presented two opinions relevant to the impact assessment: one on smokeless tobacco in February 2008 and one on additives in tobacco products in November 2010.[37]

Finally, the Eurobarometer surveys conducted in October 2009 and February 2012 have been used to provide better insight on tobacco and nicotine use in the EU and on attitudes towards tobacco control policies.[38] In particular the last Eurobarometer showed increased public support for the policy measures envisaged in this impact assessment.

Invitations from European Parliament and the Council

Since October 2007, the European Parliament has repeatedly called on the Commission to present a proposal for an amendment of the TPD and consider measures on ingredients and sales arrangements.[39] A large number of questions on the TPD revision have also been received from the European Parliament during the past years.

The Council has twice invited the Commission to consider strengthening the tobacco control legislation and, in this context, to consider product related measures aimed at reducing the attractiveness and addictiveness of tobacco products and to analyse the legal issues and the evidence base for the impact of plain packaging, including its effect on the functioning of the internal market.[40]

1.4. Impact Assessment Board

A first version of this impact assessment report was submitted to the Impact Assessment Board (IAB) on 21 March 2012. On 18 April 2012 DG SANCO representatives had a meeting with the Board and the written opinion of the Board was received on 20 April 2012. The opinion concluded that the draft report required further work and asked for resubmission. A second version was submitted to the Board in June 2012. The second opinion of the Board, of 12 July 2012, did not request a resubmission but made some further recommendations on how to improve it. The opinion criticised in particular the evidence base for the policy areas "display at PoS" and "STP", which were subsequently dropped/amended. The table below sets out the main comments of the second opinion of the Impact Assessment Board and describes how they have been reflected in this revised version of the report.

Main comments from the IAB || Revision of the draft IA Report

1. Better present the problem: -Present separately problems related to effectiveness, implementation, enforcement and currently non-harmonised areas. -Demonstrate recourse to Article 114 for non-harmonised areas, in particular for limitation of promotion at the PoS. -Clarify compatibility between inequality in health and Member States' competences in defining their health policies. || -Clearer references to effectiveness, implementation, enforcement and non-harmonised issues were introduced in the problem identification (2.2.1-2.2.5). -Internal market justifications were better explained under the problem identification (2.2.1-2.2.5). The policy areas on PoS and TVM were discarded (4.1). The preferred policy option for STP was amended. The section on the legal basis (2.4.1) was reviewed. -The references to equality were replaced by references to the objectives of Article 3 TEU (promote the well-being of its people) where relevant (for ex. 2.2). Health inequalities were, however, maintained as assessment criteria.

2. Develop a robust baseline scenario: -Explain foreseeable national actions in the context of FCTC. -Analyse further the likely take-up of STP, better explain circumvention possibilities of oral tobacco and acknowledge the uncertainty in relation to STP. || -National actions in the context of FCTC have been further explained under the baseline scenario (2.3.2). -The likely take-up of STP is described under the baseline scenario (2.3.3) and assessment of option 1(5.2.1). Circumvention is described in 2.2.1.

3. Better demonstrate the proportionality of policy options -Present measures going beyond current TPD and FCTC. -Discuss a wider range of discarded options. -Justify STP, NCP and cross-border distance sale preferred options and alternative ban-options. -Explain STP derogation, TVM verification and traceability obligations. || -A clarification of the options status in comparison with the current TPD and FCTC has been introduced in a table on TPD and FCTC commitments in Annex 3 (3.2). -A number of discarded options have been added to section 4. -The preferred option on cross-border distance sales have been further justified (5.5.4). New preferred options have been identified for STP (regulation of chewing and nasal tobacco, notification of novel tobacco products and maintaining the ban on oral tobacco, see 5.2.1), NCP (all NCP above a certain nicotine threshold are subject to the medicinal products legislation, see 5.2.2). -The definition of traditional use in the glossary was revised, but no longer part of preferred option (5.2.1). The policy area on TVM was discarded (4.1). Traceability obligations in the context of FCTC were clarified in section 2.1.4 and Annex 3.

4. Improve the assessment of impacts: -Better explain persisting divergences, in particular on ingredients. -Present discounted values. -Assess administrative costs for internet notifications. -Breakdown of overall health impacts. -Show where evidence is inconclusive. -Acknowledge trade-offs between internal market and health. || -Divergences were better explained, for example under 5.4 on ingredients. -Discounted values are presented in section 5.7.2 and Annex 5. -Administrative costs for internet notifications are better explained under 5.5.1. -Breakdown of health impacts are presented in more details under section 5.7 intro. -Evidence was reinforced and the conclusions to be drawn revisited, see for ex. STP baseline (2.3.3), plain packaging (5.3.3) and NCP impacts (5.7 intro) -Trade-offs are further clarified in the table under 6.1

2. PROBLEM DEFINITION 2.1. Market description 1.1.6. Tobacco products market

a) Supply side

The total value of the tobacco market at retail level, including taxes and excise duties, is 136,5 bEUR and the market currently consists of five main categories of products[41]: 1) Factory manufactured cigarettes (FMC), 2) Roll-your own tobacco (RYO), 3) Pipe tobacco, 4) Cigars and cigarillos and 5) Smokeless tobacco products (STP) (oral, chewing and nasal tobacco). The value and volume of sales as well as manufacturing methods and consumption patterns differ significantly between the product categories.

Figure 1 : Comparison of relative market value of tobacco products in 2010

Source: Euromonitor and

industry estimates

FMC represent almost 90% (121,3 bEUR) of the total tobacco market value and despite a decline in sales volumes over the last ten years, the overall market value has increased consistently over the same period. This is mainly due to the tax increases and continuous development of premium brands sold at higher prices. FMC manufacturing is increasingly in the hands of four large multinational companies (PMI, BAT, JT and IT) accounting for around 90% of the EU FMC market.

The FMC production is also highly concentrated in geographical terms, with only a few Member States (the United Kingdom, Netherlands and Germany) accounting for more than 50% of the total EU production.[42] American Blend (using a mixture of Burley, Oriental and Virginia leaves) accounts for 76% of the FMC market.[43]

The RYO market has increased significantly in recent years and accounts today for about 6,8% (9,3 bEUR) of the total tobacco market. This market is also characterised by strong presence of the four biggest FMC manufacturers (70% of the market), but to a lesser extent than FMC. The markets for pipe tobacco, cigars, and cigarillos are considerably smaller. These products as well as chewing and nasal tobacco products are to a large extent manufactured by SMEs.[44] The pipe tobacco and the cigar markets have been continuously declining in the last decade. The increase in cigarillo sales was partly driven by flourishing sales of so called eco-cigarillos which are not typical cigarillos and were recently re-classified as cigarettes.[45] The STP market is dominated by oral tobacco (snus) and concentrated to Sweden, the only Member State where the marketing of this product is allowed.[46] Chewing and nasal tobacco account for less than 0.1% of the total tobacco market and sales are concentrated to about 12 companies, mostly SMEs, who also sell other tobacco products.[47] Recent years have seen an increasing interest from bigger cigarette manufacturers to enter the STP market.[48] Novel categories of tobacco products are currently being developed but they are not yet placed on the EU market.[49] Most of these products are expected not to involve a combustion process and therefore would fall in the product category of STP.

Figure 2: Market value and volume 2000-2010

Category || Value 2000 (bEUR) || Value 2010 (bEUR) || Change (%) || Vol. 2000 (bsticks/ttonnes) || Vol. 2010 (bsticks/ttonnes) || Change (%)

FMC || 90.7 || 121.3 || +33.8 || 793.7 bs || 608.8 bs || -23.3

RYO || 4.2 || 9.3 || +123 || 53.1 tt || 75.5 tt || +42.2

Pipe || 0.576 || 0.480 || -17 || 6.33 tt || 4.03 tt || -36

Cigars/cigarillos[50] || 4.62 || 4.65 || +0.6 || 7.81 bs || 9.92 bs || +27

STP[51] || 0.48 || 0.83 || +73 || 5,3 || 5.9 || +10

Source: Euromonitor. Nominal prices

In terms of market development, a significant diversification of products has taken place in recent years. For example, the main manufacturer of oral tobacco (snus) increased its portfolio from 22 to 180 brands between 2002 and 2008,[52] distinctive flavoured FMC such as "pina colada" and "chocolate" have been put on the market[53] and FMC with new technology including capsules filled with flavourings embedded in the filter have been introduced in many Member States.[54] New market strategies have also been developed, in particular as a result of the tobacco advertising ban/restrictions in Member States, including innovative packaging and promotion at point of sale.[55]

Illicit trade in FMC currently accounts for 8.25 % of total trade in the EU and is estimated to increase by 1 % per year in the next five years.[56] Three broad categories exist: contraband, counterfeit and cheap whites/illicit whites (see glossary). Typically, these products do not comply with the safeguards of the TPD.

In terms of employment, there were 48,500 persons employed in tobacco manufacturing in the EU in 2009.[57] In addition to this, Eurostat data indicates that there are 86,113 farmers.[58] In 2010, there were almost 100 first processors[59] of tobacco in the EU located close to the growers’ areas, while the market of second processors[60] is in the hands of two global players[61] with similar market shares. 45,900 persons are employed in wholesale.[62] The retail sector differs widely between Member States, but according to the European retailer association (CEDT), there are almost 990,000 premises selling tobacco in the EU and around 230,000 of these are specialised shops which usually generate 45-50% of their turnover from tobacco.[63]

As far as raw tobacco is concerned, the EU was a net importer of around 430,000 tonnes (about 2/3 of the quantity needed) in 2010.[64] The EU tobacco production amounted to 294,000 tonnes. The production is often limited to small regions, very specialised and with large family labour requirements. Despite the fact that Virginia is the leading tobacco variety (46% of the EU production), most of the EU tobacco farmers (81%) are involved in labour intensive Burley and Oriental farming which is used in American blend cigarettes.[65] According to tobacco producers, adding certain substances, including sugar, is indispensable for the use of these tobacco varieties. This is because these varieties lose their sugar content during the drying process whereas other varieties (such as Virginia) keep it.

A number of upstream actors other than farmers and processors are also involved in the tobacco manufacturing process. These include suppliers of ingredients, cigarette papers, filters and packaging (see also figure 3). Based on industry reported data, the total value of those supplies is around 3 bEUR.

Figure 3: Composition of a FMC

Source: Background to Cigarette Manufacturing and Use of Additives.

Prepared by Philip Morris International Management S.A. 8 January 2010

The multinational dimension of the tobacco market combined with the geographic concentration of manufacturers and growers results in significant cross-border trade, both within the EU and with third countries. About 268,000 tonnes of raw tobacco were subject to internal trade between Member States in 2010 and the overall value of manufactured tobacco products traded across Member States' borders in 2010 was 9.5 bEUR.[66] Figure 4 illustrates the main intra-EU flows in the production of American blend cigarettes.

Figure 4: Trade flows between tobacco-growing, tobacco-producing and tobacco-consuming countries[67]

More than one third of tobacco products manufactured within the EU are sold across borders.[68] Figure 5 illustrates intra EU trade in tobacco, following the categories used by Eurostat.

Figure 5: Intra-EU trade in tobacco 2010

Category || Value 2010 (bEUR) || Vol. 2010 (100kg)

Cigarettes (containing tobacco) || 6.591 || 3,427,689

Cigars, Cheroots and Cigarillos (containing tobacco) || 0.644 || 68,641

Cigars, Cheroots, Cigarillos and Cigarettes of tobacco substitutes || 0.004 || 1,864

Smoking Tobacco (whether or not containing tobacco substitutes in any proportion) || 1.058 || 970,327

Manufactured Tobacco, Extracts and Essences, N.E.S. || 0.279 || 639,322

Total Manufactured Tobacco (whether or not containing tobacco substitutes) || 8.576 || 5,107,843

Source: Eurostat intra-EU trade figures

As regards trade between the EU and third countries, the total import to the EU of manufactured tobacco is less than 200mEUR, whilst the export of FMC and other manufactured tobacco products outside the EU accounts for 2.5 bEUR, i.e. a positive trade balance of 2.3 bEUR. On the other hand, import of unmanufactured tobacco (both raw and processed) counts for 2.17 bEUR, while the export accounts for 670 mEUR, what results in a trade deficit of 1.5 bEUR. For more details on the tobacco market and the manufacturing process, see Annex 2.

b) Demand side

According to the latest Eurobarometer 28 % of all EU citizens and 29 % of young people (aged 15-24 years) smoked in 2012.[69] FMC is the most widely used tobacco product. 70% of the smokers start before the age of 18 and 94% under the age of 25. The overall smoking prevalence differs widely between Member States and ranges from 13% to 40%. Menthol cigarettes account in the EU, for approximately 4% of the EU market, ranging from 25% in Finland to 0.1% in Greece. Cigars and pipes are smoked far less than FMC and tend to be smoked occasionally rather than daily and mostly by older individuals. STP use is most common in Sweden, where around 12% of the population uses STP (mainly oral tobacco/snus) on a regular basis, compared to 2% or less in other EU countries where marketing of oral tobacco is banned, but chewing and nasal tobacco is allowed. The figure is higher if one considers all citizens who have at least tried STP. Chewing tobacco appears to have most users in Denmark and nasal tobacco is mainly used in Germany. Some industry players see a significant growth potential for STP as well as NCP, also in the light of smoke free environments. Figure 6 indicates the trends in smoking prevalence 2006-2012 and STP use 2009-2012.

Figure 6: Smoking Prevalence 2006-2012 and STP use 2009-2012

STP || 2009 || 2012

Regular Users || Na || 1%

Proportion who have tried STP || EU 27 || 6% || 7%

DK || 12% || 15%

FI || 20% || 13%

SE || 39% || 44%

Smoking tobacco || 2006 || 2009 || 2012

Smokers || 32% || 29% || 28%

Proportion of smokers who use daily || FMC || || 79% || 80%

RYO || || 15% || 20%

Cigars || || 1% || 1%

Pipe || || 1% || 1%

Source: Eurobarometer

More than six out of ten smokers in the EU have tried to quit, with two out of ten in the previous twelve months.[70] Personal health concerns are the main motivation to quit. While the number of smokers in the EU, and with this also the smoking prevalence, has decreased in the past decades, some Member States have seen an upwards trend in young people since 2005. The Health Behaviour in School-aged Children (HBSC) study of WHO Europe from 2012 indicates an increase in smoking prevalence in 14 Member States for 15 year old boys and in nine Member States for 15 year old girls. [71]

According to the 2012 Eurobarometer,[72] smokers and non-smokers commonly perceive FMC with lower tar or nicotine levels to be less harmful. The most important factor in choosing a FMC brand is the taste of tobacco (84%), followed by the brand itself (69%) and price (65%), but packaging (23%) and specific tastes (such as menthol, spicy, fruity or sweet) (32%) are also important. Peer group pressure/behaviour is obviously the most important factor for smoking initiation. EU citizens, including smokers, are largely and increasingly in favour of various tobacco control measures. For example, three out of four citizens support putting pictorial health warnings on all tobacco product packages. A third of smokers and ex-smokers also say that health warnings had an impact on their attitudes and behaviours towards smoking.

Most EU citizens who smoke or have smoked purchase regularly their cigarettes in a specialised tobacco shop (37%), from a newsagent (26%) a supermarket (22%) or a convenience store (20%). 10% of EU citizens purchase their tobacco from TVM (mounting to 15% in Member States where TVM were accessible). Only 10 EU citizens in 100 report that they have purchased tobacco products in a country other than their country of residence in the past 12 months.[73] Cross border purchases via the internet are also limited (according to self-reporting). However, taking into account the increased use of e-commerce in other sectors, it appears likely that the market segment will grow.

1.1.7. The role of tobacco in the society

Tobacco is a legal product on the EU’s internal market, but is no ordinary commodity in the sense that it is the largest avoidable health threat in the EU, responsible for almost 700,000 deaths in the EU each year (see Annex 5). Moreover, millions of people in the EU suffer from one or more of the six main disease categories associated with smoking: 1) Bronchitis and other lower respiratory infections, 2) Chronic obstructive pulmonary diseases, 3) Stroke, heart attacks, arterial obstructions (especially in the legs) and other cardiovascular diseases, 4) Asthma, 5) Lung cancers and 6) Other cancers, such as pancreas, oesophagus, and stomach. Studies show that around 50% of smokers die prematurely and if they do so they die on average 14 years earlier. In addition, smokers have more life years that are characterised by serious disease.[74]

In addition to measures at EU and international level, strong tobacco control policies are pursued by Member States to address the harmful effects of tobacco and to protect public health. It is commonly agreed among tobacco control regulators that only a comprehensive set of continuously updated and adapted measures (e.g. price/taxation, smoke-free environments, advertising bans, labelling, ingredients regulations, information campaigns) is effective to reduce smoking prevalence over time, including reduced uptake among young people.

Tobacco consumption also has important economic implications for society and is associated with important expenditures/costs. Annual EU public healthcare expenditure on treating smoking attributable diseases is estimated around 25.3 bEUR and society loses 8.3 bEUR per annum due to productivity losses (including early retirements/deaths and absenteeism) linked to smoking. In addition, if monetised, the life years lost due to smoking correspond to 517 bEUR every year. Figure 7 summarizes the costs associated with smoking in table format.

Figure 7: Costs associated with smoking in EU27 in mEUR

Monetary value of life years lost || Smoking induced health care costs || Smoking induced early retirements || Smoking-induced absenteeism

516,713 || 25,300 || 6,081 || 2,162

On the other hand, revenue from excise duty on the sale of tobacco product in the EU exceeded 79 bEUR in 2010, contributing to almost 3% of the total Government revenue.[75] For more detailed information on economic impacts on the society, see Annex 5 (A5.2.3).

1.1.8. Non-tobacco products

Nicotine Containing Products (NCP)

In addition to the traditional tobacco market, recent years have seen the emergence of new nicotine containing products (NCP) marketed primarily as consumer/leisure products. Electronic cigarettes appear to be the most commonly available type.

The EU electronic cigarette industry is still quite fragmented and the absence of reliable trade statistics makes it difficult to summarise and analyse in terms of market size and value.[76] However, it can be concluded that the market is growing rapidly. An electronic cigarette supplier has estimates that the current value of the German market is around 100 mEUR and that the total value of the EU27 e-cigarette market (including devices and refills) is between 400 and 500 mEUR.[77] The Electronic Cigarette Industry Trade Association (ECITA) estimates that they represent 60-70% of the volumes sold on the UK market and reports that the market is growing 20-30% monthly.[78]

The EU market is mainly composed of distributors rather than manufacturers and dominated by small enterprises, although there is a growing interest from bigger cigarette manufacturers (including the big four FMC producers) to enter the market.[79]

Most of electronic cigarettes are produced in China. Once imported into the EU, they are subject to significant cross-border trade. For example, in the Netherlands vendors of electronic cigarettes are reported to operate as a hub, reselling most of the electronic cigarettes they import from China to the rest of Europe. Around 20% of their sales are internal to the Dutch market, while around 60% are sold to German vendors and the remaining 20% to vendors in Denmark, Spain, France, Austria and Switzerland.[80]

Figure 8: Value chain of the e-cigarette market in Europe

Source: Matrix Insight

As for the demand side, the current use of NCP is growing quickly. 7% of EU citizens have reported in the latest Eurobarometer that they have at least tried electronic cigarettes.[81] In the UK an increase in the number of electronic cigarette owners has been estimated from a small number in 2006 to over 1 million by 2013.

Figure 9: Projected growth in the UK market for e cigarettes

Source: Matrix insight 2012

Electronic cigarettes are widely advertised on the internet. A study monitoring Google search queries from January 2008 to September 2012 reported that online interest in electronic cigarettes has surpassed that of oral tobacco (snus) and nicotine replacement therapies.[82]

Electronic cigarettes are most often marketed by their producers as an alternative to FMC rather than a smoking cessation aid.[83] There are limited data available at this stage why people use electronic cigarettes. However, according to a recent survey among electronic cigarette users in Poland, most used the product primarily to quit smoking or to reduce harm associated with smoking (both 41%).[84] An online survey of more than 3500 e-cigarette smokers found that the vast majority of respondents were using e-cigarettes to quit smoking or reduce their smoking (92%) and a large proportion felt these products were less toxic than traditional tobacco products (84%).[85] These studies are well in line with information received from the Electronic Cigarette Industry Trade Association (ECITA), namely that the “vast majority of consumers” use e-cigarettes as a harm reduction alternative to smoking/a substitute for FMC/for smoking cessation purposes and that many use them to get around smoke-free environments (including lorry drivers).[86] Due to the high numbers of possible flavours, ECITA has also reported that e-cigarettes would be used as a “fun product” (annual “vape festivals”).[87] In terms of age of the users, ECITA has stated that statistics show that the proportion of users under 20 is low but they cannot exclude that young people or minors might use the products, although they believe that the comparatively high start-up costs, together with a lack of peer pressure would make this unlikely.[88] The previously mentioned Polish survey also found that one in five young people had tested electronic cigarettes.[89] As explained in subsequent sections of this report, the regulatory framework for electronic cigarettes and other NCP is complex and varies between Member States and a number of health and safety concerns are associated with the products. NCP other than electronic cigarettes appear, at this stage, to be less common on the EU market.

Herbal products for smoking

Euromonitor data indicate that herbal cigarettes were sold in significant amounts in seven Member States over the period 2000-2010. The overall size of the market grew from around 40.6 million units in 2000 to 50 million units in 2010, an increase of around 23%.[90] These products are often marketed as "healthier" and natural products with "no additives", which gives the impression that these products are not harmful.[91]

1.1.9. Regulatory framework 2.1.1.1. Tobacco control in the EU

Since the 1980s, there have been legislative initiatives in the EU to ensure harmonised product regulation for tobacco whilst also ensuring a high level of health protection. Today, the TPD constitutes, together with the Tobacco Advertising Directive from 2003,[92] the key legislation in the field of tobacco in the EU. The content of the current TPD is described in section 1.2. The Tobacco Advertising Directive bans all forms of cross-border advertising in printed media, information society services, radio and sponsorships of events.

These two main Directives are complemented by two non-binding Council Recommendations: one on the prevention of smoking and on initiatives to improve tobacco control from 2003 and one on smoke-free environments from 2009.[93]

Awareness-raising activities are also important instruments in EU’s tobacco control policy. The current campaign (Ex-smokers are Unstoppable) was launched on 16 June 2011 to encourage young adults in the 25 to 34 age group to stop smoking. The previous campaign, "HELP – For a life without tobacco ", which ran from 2005 to 2010, was focused on smoking prevention, cessation, and passive smoking, targeting young Europeans between 15 and 25 years of age.

Measures to regulate and control tobacco are not only initiatives by DG SANCO. Tobacco is a cross-cutting issue which affects numerous policy areas. High taxes on tobacco products are generally seen as a very effective means to reduce tobacco use, with a particularly big impact on young people and people with lower incomes. Council Directive 2011/64/EU amends the structure and rates of excise duty on manufactured tobacco in the EU and in this context more convergence and further increases of tobacco taxes can be expected in the EU. The European Anti-Fraud Office (OLAF) investigates cases of illicit tobacco trade, which deprive Governments of significant tax revenues and undercut the prices charged by legal traders. In the area of advertising, the Audiovisual Media Services Directive [94] complements the EU legislation on tobacco advertising, by providing a ban on all forms of audiovisual commercial communications, including product placement as regards tobacco. Direct tobacco subsidies to growers were once an important but controversial part of the EU's agricultural policy. They have now been phased out, but were partially replaced by other subsidies. The Commission (DG EMPL) is also considering measures addressing the risks of employees arising from exposure to environmental tobacco smoke at the workplace.

The EU also works with international partners to reduce the consumption of tobacco worldwide, including in the context of the WHO Framework Convention on Tobacco Control (FCTC) (see 2.1.4.2).

All the instruments described in this section are mutually reinforcing and play an important role in the comprehensive tobacco control policy.

Figure 10: Tobacco control in the EU

2.1.1.2. Obligations in the context of the WHO FCTC

The WHO Framework Convention on Tobacco Control (FCTC) was adopted by the World Health Assembly in May 2003 and is the first ever international treaty on public health developed in response to the globalisation of tobacco consumption. The FCTC includes both demand reduction provisions (such as price and tax measures, protection from exposure to tobacco smoke, content and disclosure of tobacco products, packaging and labelling, education and communication, advertising, promotion and sponsorship) and supply reduction provisions (such as illicit trade, sales to and by minors and support for economically viable alternative activities).

The FCTC is a legally binding instrument which needs to be implemented and enforced by all Parties having ratified the Convention (so far over 170 countries across the world), including the EU and its Member States. At the time of the final approval of the FCTC it was considered that both the EU and Member States have competence in certain areas covered by the Convention (mixed agreement) and need to work together on the uniform application.[95] A legally binding Illicit Trade Protocol based on Article 15 of the FCTC was adopted by the Conference of the Parties to the FCTC in November 2012. The EU and the Member States are expected to become Parties to this new instrument (as is the case for the FCTC). The core provisions of the protocol relate to the control of the supply chain for tobacco products through notably licensing (or equivalent approval), due diligence, record keeping, control of duty free sales, of internet sales and of free zones and a tracking and tracing system. Seven sets of guidelines have also been adopted (by consensus) to assist Parties in meeting their implementation obligations under the FCTC (figure 11). The guidelines, while not legally binding, give an indication of Parties' political commitments under the FCTC. In general, the guidelines are more far reaching than the FCTC and reflect scientific developments in tobacco control. For the purpose of this impact assessment, a distinction has been made between the binding “FCTC obligations” and the political “commitments” contained in the guidelines.

For the purpose of the revision of the TPD, it is relevant to distinguish between the following categories of obligations and commitments stemming from the FCTC:

Harmonised areas at EU level: obligations at EU level stemming from the legally binding FCTC:

The EU (as Party to the FCTC) has an international law obligation to ensure that the TPD provisions comply with the FCTC. Member States are bound by the TPD and cannot take action at national level. The Illicit Trade Protocol will also be a legally binding Treaty once adopted and entered into force. However it is not further considered in the context of this Impact Assessment.

Harmonised areas at EU level: commitments at EU level stemming from the non-binding FCTC guidelines:

The EU should ensure that TPD reflects new developments based on scientific facts and internationally agreed product standards (TPD Article 11). Member States are bound by the TPD (where it allows no discretion to the Member States) and cannot take action at national level.

Non-harmonised areas at EU level: obligations stemming from the legally binding FCTC:

The EU and its Member States are legally bound by the FCTC obligations and shall work together to ensure uniform application/avoid fragmentation of the internal market.

Non-harmonised areas at EU level: commitments stemming from the non-binding FCTC guidelines

The EU and the Member States have expressed their (political) support for the FCTC guidelines, but have no legal obligations to implement them. EU action is justified if divergent implementation in Member States leads to (or is likely to lead to) fragmentation of the internal market.

Figure 11: Obligations in the context of FCTC in harmonised and non-harmonised areas

EU should ensure that TPD complies with FCTC commitments, MS prevented from acting unilaterally.

1. EU to ensure that FCTC obligations are implemented. MS prevented from acting unilaterally.

TPD harmonised areas: Obligations stemming from the FCTC:

FCTC Art 11: Health warnings should be 50% or more, but not less than 30%

FCTC Art 15: Full traceability

2. TPD harmonised areas: Commitments stemming from FCTC guidelines (GL):

GL Art 11: Health warnings more than 50%

-Pictorial health warnings on both sides of the packets

-Removal of TNCO display

3. EU action to prevent fragmentation of the internal market if there is a risk of divergent implementation.

EU and MS to ensure uniform application. EU action to prevent fragmentation of the internal market caused by divergent implementation.

TPD non-harmonised areas: Obligations stemming from the FCTC:

FCTC Art 9 and 10: Effective ingredients regulation and measures for disclosure

FCTC Art 11:No misleading package promotion

FCTC Art 16: No small packages

FCTC Art 16:TVM not accessible to minors

4. TPD non-harmonised areas: Commitments stemming from the FCTC guidelines (GL):

GL Art 9 and 10: Restriction/ban on "attractive" ingredients

GL Art 11: Cessation information on the packages

-Consider the adoption of plain packaging

GL Art.13: -Consider the adoption of plain packaging

-TVM ban

-PoS display ban

-Internet sale ban

Annex 3 gives a more detailed description of developments and plans in Member States as well as the links between the TPD and FCTC (A.3.2).

2.2. Problem identification

Market developments, such as the appearance of new products (e.g. electronic cigarettes) and new market strategies (e.g. appealing packages and flavoured tobacco products) have taken place in recent years. The same is true for scientific development (e.g. SCENIHR opinions). In terms of international obligations, the FCTC was concluded after the adoption of the current TPD, which was later supplemented by guidelines. In particular the guidelines leave Member States with substantial discretion in terms of implementation. This could lead to heterogeneous development in Member States and have a negative effect on the internal market, in general, and, in particular, in Commission legislative proposal in the field of internal market .

The lack of EU action negatively affects EU citizens in terms of premature mortality, expensive health care treatment and inadequate consumer information. This is not in line with the overall aim of the EU to promote the wellbeing of its people (TEU Article 3) nor with TFEU Articles 168(1) and 114(3) which foresee a high level of health protection in all EU policies and activities.

Economic stakeholders have referred to some shortcomings with the current TPD (e.g. on the lack of a common ingredients reporting format) and the tobacco industry stressed that they are not against a revision of the TPD if it improves the functioning of the internal market.[96] The industry has also drawn the attention of the Commission to the risks associated with increased illicit trade. However, in general, the industry does not support further harmonisation, possibly in the fear of stricter regulation ("high level of public health"), although one company interviewed in the context of the revision stated that a single regulation on ingredients across EU might be less expensive than the continuous adaptation to national provisions, as long as the regulation is proportionate and science based.[97] The tobacco industry, in particular Swedish Match, has also asked for the lifting of the ban on oral tobacco. They strongly oppose measures such as plain packaging and display ban at point of sale (PoS). The health NGOs, on the other hand called for stricter measures in particular with respect to labelling and ingredients. They requested that the ban on oral tobacco (snus) is not lifted and that stricter measures for chewing and nasal tobacco are introduced. They also called for strict regulation of NCP and supported measures against illicit/non-compliant products. For further details, see Annex 1.

1.1.1. Problem 1: Smokeless tobacco and extension of the product scope

a) Smokeless tobacco products (STP)

Within the category of STP, the placing on the marketing of oral tobacco was banned in the EU in 1992 and this ban was maintained in the TPD in 2001 to stop the expansion of a product considered harmful to health, attractive to young people and new on the markets of all Member States.[98] Before the ban, Member States had started to take individual action, which in 1992 was replaced by action at the Community level. The producers of oral tobacco argue that the ban on oral tobacco is no longer appropriate. The health NGOs and most Member States are of a different view. This section also raises the question whether the current labelling requirements for all STP (Art 5(4) TPD) and ingredients regulation (reporting) are still adequate/sufficient, taking into account the high number of new products which are now marketed/attractive to young people.

· Effectiveness of the current TPD

General problems related to all STP

The current regulation of STP does not effectively address recent and foreseeable market developments. When the current regulation on STP (including the ban on oral tobacco) was introduced in 1992 and confirmed in 2001, chewing and nasal tobacco products were seen as traditional products on a declining market with virtually no market outside certain socio-professional groups (seafarers, miners and sectors of the army) and regions.[99] The situation has somewhat changed since the current TPD was adopted. Recent years have seen an increase in the sale of chewing tobacco as well as a modest increase in sale of nasal tobacco on the main markets concerned.[100] Chewing and nasal tobacco products are subject to cross-border trade, including via the internet, meaning that they can reach new user groups and new geographical markets.[101] However, one chewing tobacco manufacturer has reported a greater potential for growth as more restrictions are put in place for smoking tobacco products as STP provides an alternative to be used where smoking is not allowed.[102] The production method (partly done by hand) of traditional chewing tobacco and the relative expensiveness of the products is also an important factor in determining the market potential.

In addition, there has been an important product development in STP (both as regards chewing and nasal tobacco and as regards oral tobacco limited to the Swedish market). As indicated in the market description (section 2.1.1), the main manufacturer of oral tobacco (snus) increased its portfolio from 22 to 180 brands between 2002 and 2008.[103] New market strategies target consumers outside the distinctive population groups who traditionally used these products, including young people. For example, there are STP available which are especially developed for modern taste or a younger generation. STP with characterising flavours (including chewing tobacco with tropical or bergamot flavours, nasal tobacco with peanut butter or cheese and bacon flavour and oral tobacco with elderflower and rhubarb taste) are put on the market and nasal tobacco has recently been promoted at youth parties throughout Germany. The packaging and labelling has also become more attractive masking the health risks associated with these products. In this light some Member States have taken action and banned STP all together leading to discrepancy between national markets (see Annex 3). The accession country Iceland is also reflecting about the introduction of a ban on chewing and nasal tobacco.[104]

The current labelling requirements for STP (oral, nasal and chewing tobacco) do not adequately inform consumers about the adverse health effects of STP. In particular, the current warnings lack visibility as they are required on one side of the package only and are often placed on the bottom of the packet.[105] One of the countries (Norway) responding to the public consultation has argued that the current health warning on STP (including oral tobacco) is outdated, insufficient and needs to be strengthened. However, Norway cannot take action at national level due to the current TPD requirements (TPD Article 5(4)) which applies to this country through the EEA Agreement.[106]

In terms of health, there are considerable differences between various types of STP, but all STP contain nicotine and are addictive. While according to a relatively recent SCENIHR opinion (2008) STP are less harmful than for example FMC, the report also concluded that STP are not harmless. This is in line with the assessment of IARC, that has classified STP as carcinogenic to humans. These products contain carcinogenic substances, albeit at different levels, and are associated with a number of adverse health effects. The health effects, including findings from more recent studies, are further developed in section 5.2.1, assessing the impacts of lifting the ban on oral tobacco.

Oral tobacco (snus)

There are divergent views among stakeholders whether the current ban of placing on the market of oral tobacco is justified and whether the ban should be maintained, extended to other STP or lifted. Economic stakeholders, in particular those producing oral tobacco (snus), like Swedish Match, and citizens responding to the public consultation have argued that the ban of oral tobacco is no longer justified considering that oral tobacco is less harmful than FMC and also less harmful than other STP (chewing and nasal tobacco) which are not banned. These stakeholders also claim that oral tobacco can be used for smoking cessation. Other stakeholders, including most Member States and health NGOs, have defended the current ban and/or argued for an extension of the ban to all STP. The main arguments from these stakeholders relate to concerns about the harmful health effects of STP, the risk of STP as a gateway to FMC consumption and the risk of dual use (i.e. consumption of both cigarettes and snus). It was also argued that all STP need to be banned while these products still have relatively limited market shares as the supply of novel forms of STP is likely to increase. Respondents within this category also pointed to the fact that STP cannot be seen as an effective substitute for FMC.

The main producer of oral tobacco in the EU, has also claimed that the different treatment of oral tobacco and chewing tobacco is discriminatory. The producer has pointed to the huge marketing potential for oral tobacco (snus) outside Sweden and indicated that the current ban is equal to a hypothetical annual loss in export revenues to at least 3 bEUR and in the most optimistic scenario the market could even reach 9 bEUR per year.[107] The marketing potential for oral tobacco has increased significantly in recent years as STP is a means to consume tobacco/nicotine in public places where smoking is forbidden. Manufacturing of some other STP requires manual labour which significantly limits the growth potential. Also, this type of STP is produced by a very limited number of SMEs who do not have the market power to export into new markets where the products have no traditional use.

The authorities of the autonomous Finnish island Ǻland have argued in their submission to the public consultation on the revision of the Tobacco Products Directive (TPD) that the current ban on oral tobacco distorts competition. Ships under Swedish flag would be allowed to sell oral tobacco (snus), whilst vessels under the flags of Finland or Åland serving the same routes would not be allowed to do so.[108]

Novel tobacco products

The STP market development is not limited to conventional oral, chewing and nasal tobacco products. There are also important developments in other novel tobacco products, often claimed to be less harmful than FMC and targeted to consumers who cannot or will not cease smoking.[109] The tobacco industry seems to see a very significant potential in this new product development.[110] Like for other the STP, the question is whether these products can act as entry gates into tobacco consumption, in particular among young people, or whether these products prevent established smokers from quitting (dual use). The expected development in consumption of STP in the absence of further EU action is explored under section 2.3 (Baseline scenario).

· Enforcement of the current TPD

The current regulation of STP based on the mode of consumption of different STP categories is sometimes unclear and can facilitate circumvention of the current legislation. In particular, it may encourage STP manufacturers to market their products as chewing tobacco (allowed) instead of tobacco to be sucked (banned as oral tobacco). For example, the instruction on how to use a product marketed as a chewing tobacco found on an internet store refers to the placing “under your upper lip and keep in place for 5 minutes to a few hours according to your convenience", which describes a sucking and not a chewing mode of use.

It has been reported that the current ban of placing on the market of oral tobacco has also led to some enforcement difficulties. A recent study concludes that many internet retailers of Swedish oral tobacco (snus) target non-Swedish customers and that ordering oral tobacco from EU Member States other than Sweden is quick and straight forward despite the current ban. Out of 43 test purchases in 10 Member States, 41 were successfully made.[111] The availability of oral tobacco through internet throughout the EU was also pointed out in the Commission report on Sweden's implementation of measures necessary to ensure that oral tobacco is not placed on the market in other Member States.[112] Further action might be warranted on this issue upon receipt of supplementary information.

b) Nicotine containing products (NCP)

Electronic cigarettes and other NCP for leisure purposes did not exist when the current TPD was adopted in 2001. This raises the question whether there is a need for action and if so how these products should be treated.

· Implementation of the current legal framework for NCP

About half of the Member States have reported that they consider electronic cigarettes and other NCP as medicinal products by function, even if they are not presented as smoking cessation aid but rather as alternative to cigarettes (leisure products). One third have said they have no specific regulation in place which means that the General Product Safety Directive[113] applies and a minority of the Member States have chosen to ban these products or apply certain provisions that are used for tobacco products (for further details, see Annex 3, A.3.1.1.2.). So far, no electronic cigarette has been authorised in the EU under the pharmaceutical regulation, but at least one application has been submitted and others are foreseen.[114] The increasing market volume (section 2.1.3) and cross-border trade together with the different legislations in Member States affects negatively the functioning of the internal market. It contributes to legal uncertainty for manufacturers and distributors and may also negatively affect consumer confidence in the internal market, in particular considering the safety concerns related to NCP (see figure 12). It also prevents NCP from moving freely across borders as manufacturers and distributors are required to comply with many different legal systems. Member States have expressed an urgent need for orientation from the Commission as to which legislation applies to electronic cigarettes.[115]

Nicotine replacement products (NRTs) considered as medicinal products need to undergo strict marketing authorisation procedures and if other NCP can reach the market without such authorisation, it could lead to an unjustified advantage undermining a level playing field. The pharmaceutical industry has argued in favour of regulating NCP (some of them in the context of the pharmaceutical legislation and others by including them in the scope of the TPD), while Electronic Cigarettes Industry Trade Association (ECITA) representing primarily vendors of electronic cigarettes in the UK has argued that these products do not need to be further regulated (see Annex 1).

The current fragmented situation is a result of various efforts in Member States to respond to health concerns associated with NCP. The Commission has, so far, received fourteen notifications concerning (refill) liquids for electronic cigarettes via the RAPEX system, indicating serious health risks for consumers (17 December 2012).[116] The serious health risks were due to the toxicity of nicotine and misleading presentation, for example labelling referring to fruit.

Nicotine is a toxic and addictive substance.[117] Acute nicotine poisoning has occurred in children who accidentally ingest nicotine and the safety of heavy or long terms use are not (yet) known.[118] Cartridges are sometimes sold in containers with minimal protection against tampering, opening by children etc. Ingestion of a single replacement cartridge is very likely to be lethal and users have reported leakage when replacing cartridges, suggesting that the quality of cartridges themselves is highly variable. A study of five different brands of electronic cigarette also found that most brands' cartridges were poorly constructed and leaked.[119]

Studies of the nicotine content of cartridges have shown significant differences between labelled and true levels of nicotine cartridges and refill solutions.[120] Analyses of electronic cigarette samples conducted by the US Food and Drug Administration (FDA) have shown detectable levels of known carcinogens and toxic chemicals; including diethylene glycol, tobacco-specific nitrosamines and tobacco specific impurities.[121] A recent study has found immediate adverse physiologic effects (changes in the lung function) after short terms use which is similar to some of the effects associated with tobacco smoking.[122] Another recent study concludes that ‘passive vaping’ must be expected from the consumption of e-cigarettes due to prominent components in the gas-phase, including 1,2-propanediol, 1,2,3-propanetriol, diacetin, flavorings, and traces of nicotine.[123]

Some NCP also appear to be subject to vivid and innovative marketing, which could attract young people in particular. For example, e-cigarettes are available in a range of flavours, including coffee and cherry and a "smart pack" is being introduced that vibrates and flashes a blue light when a user is within 50 feet of someone with another "smart pack". The popularity of electronic cigarettes was also confirmed in a recent Polish survey which found that one in five young people had tested electronic cigarettes. [124] ECITA on the other hand claims that consumers are mainly established smokers using the product for cessation and reduction purposes.[125]

At this stage the evidence on the effectiveness of electronic cigarettes in smoking cessation is inconclusive.[126] As indicated, most users of electronic cigarettes seem to use them for cessation/reduction purposes, but the industry association, ECITA, explicitly advices its members to refrain from such claims as it could trigger application of medicinal products regulation (see section 2.1.3.). There are also some concerns that electronic cigarettes and other NCP can take advantage from national smoke-free environment policies,[127] in particular as the products are often promoted as an alternative to smoking which allows smokers to keep up nicotine addiction in situations where smoking is prohibited. Electronic cigarettes can also become a starter/re-starter product attractive to young people or former smokers.[128] However there are some studies being published that highlight the electronic cigarettes' potential as a smoking cessation aid. [129]

· Enforcement of the current legal framework for NCP

The current uncertainty in relation to the legal classification of NCP makes enforcement difficult and contributes to circumvention. It also undermines reaching a level playing field and leads to an unjustified differential treatment of different types of products containing nicotine. Today, there are two categories of products containing nicotine available on the market: NCP placed on the market without any prior control and NRT (Nicotine Replacement Therapies) which have been subject to a strict (and relatively costly) risk/benefit analysis and approved as medicinal products.

As illustrated under the market description (section 2.1.3), most electronic cigarettes are presented as alternatives to FMC rather than smoking cessation aids. It appears that the products are presented in this way in order to avoid the relatively burdensome authorisation procedure applicable to medicinal products.[130]

Regardless of the presentation of the NCP, a product which may be used to modify physiological functions falls under the definition of medicinal products by function and needs to be authorised under this framework before being put on the market. The pharmacological effects of nicotine in NRTs are well documented. Nicotine attaches itself to receptors in the brain and has a long tradition of use in NRTs to reduce craving and help people stop smoking.[131]

Moreover, electronic cigarettes without prior authorisation appear to be available also in Member States which have reported that they consider them as medicinal products or prohibit marketing.[132] According to ECITA, regulatory agencies struggle to provide monitoring and enforcement in regulating the electronic cigarette industry.[133]

c) Herbal products for smoking

· Fragmentation of the internal market

Herbal products for smoking, e.g. tobacco- and nicotine-free cigarettes and herbal fillings of water-pipes, fall outside the current scope of the TPD and are currently not subject to harmonised rules in the EU. This raises the question whether these products – considering their similarities with tobacco products – should be regulated in the revised TPD. Herbal products for smoking are subject to many different regulatory regimes in Member States. About half of the Member States have no specific regulation in place, while two Member States do not allow these products, one Member State has labelling requirements in place and the remaining Member States have other rules (see Annex 3, A.3.1.1.1). This negatively affects the cross border trade in these products, which appears to be quite significant considering that many products are marketed and sold on-line.[134] Manufacturers and retailers need to be familiar with and keep up to date with many different legal situations in all Member States. The free movement of goods and consumer confidence in the internal market cannot be secured in this case as the health requirements differ significantly from one Member States to another.

The divergent actions taken by Member States are a result of health concerns related to these products. Herbal products for smoking have not been extensively studied from a scientific/health perspective but it is generally acknowledged that inhalation of smoke of any kind can pose a health risk. This is also the reason for Member States' actions in this area. Evidence suggests that the combustion of these products produces a level of carbon monoxide similar to tobacco cigarettes as well as other toxic substances such as tar.[135] On the other hand, these products do not contain nicotine and may therefore not be associated with the same risk of addictiveness.[136] It is of particular concern that these products are often perceived as harmless or less harmful by consumers. This perception is reinforced by the current marketing of herbal products for smoking as "healthier" and "natural products without additives".[137]

A particularly worrying trend in this context is the increase in water-pipe (sisha) smoking among young people.[138] The content of the water-pipe filling is often unclear and sometimes herbal filling is used which does not contain tobacco.[139] Water-pipe smoking as such is also often perceived as a less harmful activity than traditional tobacco smoking. As indicated, this is expected to trigger further actions at national level in the years to come.

1.1.2. Problem 2: Packaging and labelling

The type, size and location of health warnings as well as the display of TNCO levels are already subject to harmonised provisions in the current TPD (see figure 12). However, it might be necessary to update these rules to bring them in line with international, market and scientific development.

· Effectiveness of the current TPD

The current provisions on packaging and labelling are no longer in line with scientific evidence and commitments in the context of the FCTC. For example, the current obligation to print the TNCO yields on the package have been shown to be potentially misleading, as it makes people believe that some products are less risky to their health.[140] Scientific evidence also suggests that bigger pictorial pictures on both sides are more effective than text-only warnings on a range of outcomes, including being a deterrent for new smokers[141] and a means to increase cessation among current smokers.[142] In particular, they increase smokers' and potential consumers' awareness of warnings, knowledge and credibility of health risks, depth of processing and also cessation behaviours such as forgoing FMC, quit intentions and actual quitting.[143] Thus, the current TPD provisions in this area are not as effective as they could be.

Figure 12: Comparison between harmonised TPD provisions and FCTC guidelines in the area of packaging & labelling

Current TPD Articles 5 and 7 || Article 11 FCTC and Guidelines for implementing Articles 11 and 13 FCTC

Text warnings not less than 30% + 40% of both sides (Art 5(5)). For Member States having more than one official language, the warnings should be increased to 32-35% and 45-50%. || Health warnings shall be large, clear, visible and legible and should be 50% or more of the principal display areas but not less than 30% (FCTC Art 11b(iii) and (iv)) Health warnings should be more than 50% of the display areas (GL Art 11)

Member States may introduce pictorial warnings on one side of the package (Art 5(3)) || Parties should consider pictorial health warnings on both principal display areas. (GL Art 11)

Mandatory display of TNCO levels on the package (Art 5(1)) || Parties should prohibit the display of figures for emission yields such as TNCO. (GL Art 11)

Ban on misleading product descriptions (Art 7) || Packaging, individual cigarettes or other tobacco products should carry no advertising or promotion, including design features that make products attractive. (GL Art 13)

Some of the current packet shapes make it difficult to effectively display health warnings affecting negatively the visibility and legibility of the warning. This is particularly the case for very narrow (including “lip-stick” shaped) packets which distorts text and picture warnings.[144]

Use of colours and other design features on packages and tobacco products undermines the effectivene