EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 16.7.2008 
SEC(2008) 2266 
  
COMMISSION STAFF WORKING DOCUMENT 
Accompanying document to the  
 
Proposal for a 
 
COUNCIL DIRECTIVE 
 
amending Council directive 95/59/EC, 92/79/EEC  and 92/80/EEC on the structure and  
the rates of excise duty app lied to manufactured tobacco 
   
IMPACT ASSESSMENT  
{COM(2008) 459 final} 
{SEC(2008) 2267} 
 
EN 2   EN  T HIS IMPACT ASSESSMENT WAS CONSIDERED BY THE IMPACT ASSESSMENT BOARD 
ON 7 MAY 2008.  THE OPINION OF THE IMPACT ASSESSMENT BOARD DATES OF 8 
MAY 2008.  THE FOLLOWING CHANGES HAVE BEEN MADE BASED ON THIS OPINION : 
• A description of the base line scenario has been  added at the end of the problem definition 
section, describing the causal re lationship between tobacco du ties, public health, national 
budgets and the effects on the Industry 
• The description of the current system of excise duties on tobacco has been clarified. 
• The section on policy objectives has been made more specific as concerns the desired 
impact on the internal market and the reducti on of tobacco consump tion. In addition it has 
been clarified how the objectives are inte r-related and what are the trade-offs. 
• The available estimations on cross-border shopping and illicit trade have been added in the 
relevant parts on budgetary impacts. In the absence of fully reliable data a hypothetical 
example has been added to illustrate the po ssible negative effects on the budgets of some 
Member States. In addition a separate chapte r on compliance costs (f ight against illicit 
trade) has been added, paying  particular attention to the impact of trade from third 
countries. 
• As concerns the presentation, a non-technica l summary has been added and a glossary 
explaining the technical term inology and the abbreviations . The table comparing the 
options has been simplified. Finally, a descrip tion of the data source s and data collection 
method has been added. 
 
EN 3   EN EXECUTIVE  SUMMARY   
The Commission services have made an impact ass essment focusing on potential measures that could 
modernise or add more transparency to the struct ure of excise duties on tobacco products. In addition, 
particular attention has been paid to the relations hip between public health and the final price of the 
products, taking stock of the WHO Framework C onvention on Tobacco Control, as well as to the 
options to bring the structure and the rates of ex cise duties for fine-cut smoking tobacco ("roll-your-
own"), into line with excise duties for cigarettes. 
A broad consultation process preceded this impact  assesment. Associations and other stakeholders 
(trade, health, etc.) were invited to submit pos ition papers via a public web- consultation.  
In order to examine how the different objectiv es for tobacco taxation could be addressed, the 
Commission assessed four basic approaches. 
The first approach consists of not intervening  further at Community level (the no policy change 
option). This approach will not solve the problem  of distortions of cross-border shopping and 
smuggling currently existing on the tobacco market, which has consequences in terms and revenue and 
health protection.  
In addition, it will not resolve the fiscal instabilit y and distortions of competition which are currently 
created by the most popular price category (MPPC) concept. It  will also not address the problem of 
substitution and tax induced distortio ns of competition between the diffe rent products of manufactured 
tobacco. It was therefore not an opti on that the Commission chose to pursue. 
The second approach consists of changing only the structure of excise duties  on cigarettes . In 
order to resolve the problems which are curren tly created by the MPPC concept, the Impact 
assessment examines abolishing the concept of the MPPC as benchmark for minimum requirements. 
Currently excise duties must be at least 57% of th e tax inclusive retail price and at least €64 per 1000 
cigarettes of the MPPC. Instead, the Impact assessment  examines two alternatives: a) applying the EU 
minimum requirements of 57% and €64 to all ciga rettes or b) applying the minimum requirements in 
accordance with weighted average prices (WAP). Simultaneously the impact is assessed of providing 
more flexibility to Member States as concerns the structure of the excise duties at national level. 
Both alternatives would simplify the arrangements as compared to the curr ent situation. Neither 
applying minimum requirements on all cigarettes or on WAP  would entail an increase of 
administrative costs for any of the stakeholders. Both  alternatives would also resolve the problem of 
the fiscal instability and distortions of competition wh ich are currently created by the MPPC concept. 
However only applying the minimum of €64 on all ciga rettes would create a tax floor for all cigarettes 
in the EU. It would also reduce the tax and price gap between Member States more than the other 
options and, to an appreciable extent, integrate public health concerns. Therefore this option gets 
priority from an internal market and a health point of view. However, applying the 57% rule on all 
cigarettes would for a number of Member States result in a compulsory ad valorem duty and not be in line with the objective to provide more flexibility to Member States as concerns the relation specific 
and ad-valorem duties. Therefore applying the 57% rule on WAP is the favoured option. 
The second approach would, however, not  take sufficient account of health considerations.  
The third approach  consists of increasing the minimum rates of excise duties on cigarettes (in 
addition to changes to the structure). The Impact  assessment simulated a number of increases of the 
minimum rates of excise duties on cigarettes, either the 57% or the minimum of €64 per 1000 
cigarettes. It concludes that an increase of the monetary minimum of €64 is the best instrument to 
achieve approximation of taxes and prices of cigarettes in  the EU in the interest of the Internal market 
 
EN 4   EN and with a view to tobacco control. However an increase of the monetary minimum should be 
combined with an increase of the 57% minimum re quirement, which would require an update of the 
escape clause, currently set at €101 (when the excise duty is at least €101 on the MPPC member States 
do not any longer have to comply with the 57% requirement). An update to €122 would keep pace 
with the recent evolution of excise duties on cigarette s in the Internal Market and would have the same 
effect as in 2001, i.e. it would have the effect of  covering the five highest taxing Member States.  
Over the last five years the consumption of cigarett es in the EU declined by more than 10%. In the 
same period the excise duties have increased by more than 30%. In order to trigger a similar decline in 
consumption over the coming 5 years further increases in excise duties would be desirable. Taking 
into account a price elasticity of -0.43 as suggested by the World Bank, a 25% price increase is needed 
to achieve a 10% reduction in demand. A 10% reducti on over a period of 5 years would also be inline 
with the European Strategy for Tobacco Contro l" (ECTC), adopted by the Regional Committee for 
WHO Europe which has as a principal target to bring smoking prevalence down by 2% per year.  
In view of the above, the Commission has considered a number of possible increases. 
An increase to €90 on all cigarettes and 63% on WAP would trigger a probable decrease of demand of 
on average 10% in 22 Member States1. In addition it would pave th e way for further increases of 
excise duties on cigarettes, also by those Member States which already have a high level of taxation. Apart from BG and RO it would not render prices ex tremely expensive as compared to the local 
purchasing power in the Member States. 
All in all, in the field of cigarettes, this approach  appears best suited to ensure the proper functioning 
of the Internal Market and, at the same  time, a high level of health protection. 
The fourth approach  consists of changing the structures and mini mum rates of excise duties on 
other products , in particular fine-cut tobacco, in order to  avoid substitution of cigarettes by less taxed 
tobacco products. 
The substantial differences in ta x levels among Member States on fine-cut tobacco courage smuggling 
and cross border shopping between a number of neighbour ing countries and give rise to distortions in 
the internal market. In addition, the gap between the level of taxation of cigarettes and fine-cut tobacco 
gives rise to substitution. Official releases for cons umption of cigarettes in the EU 27 decreased during 
2002-2006 by around 13%. Conversely, the releases for consumption of fine cut tobacco increased by 
around 10%. There is little justification for signif icant differences in the minimum rates for these 
products at Community level. This applies both from  a perspective of fair competition and, given the 
harmful character of both products, from a health point  of view. Therefore the minimum rates for fine-
cut tobacco intended for the rolling of cigarettes should be brought into line with the rate for 
cigarettes. 
For fine-cut Member States may choose between complying with a monetary or
 an ad valorem 
minimum rate. However since the monetary minimu m requirement is the best approximating factor, 
there should be (in addition to the ad valorem minimum rate a compulsory monetary minimum rate for 
all Member States, as is the case for cigarettes. 
Taking account of the specific characteristics of fi ne cut tobacco, the pr evious Commission report 
stated the minimum excise for fine-cut tobacco could be fixed at about two thirds of the minimum excise incidence for cigarettes. In order to respec t a two thirds relationship between fine-cut and 
cigarettes, the monetary minimum requirement should be fixed at €43 per kilogram and the 
proportional minimum requirement at 38%.  
                                                 
1 Not in DE, UK, IE, FR (and RO was not included in the simulation) 
 
EN 5   EN Applying the aforementioned 2:3 relationship on the s uggested increases for cigarettes, would increase 
the minimum rates for fine cut to €60 and 42% over a period of five years. Assuming the same price-elasticity as for cigarettes, an increase of the mi nimum requirements to €60 and 42% would trigger a 
reduction in demand of around 20% in 19 Member States. 
GLOSSARY  
Specific excise duties:  Duties which are levied on the quantity (e.g. per 1000 cigarettes). 
Ad-valorem excise duties or proportional excise duties:  Duties which are levied on the price. 
Minimum excise tax:  The minimum amount of tax which is always due per quantity, even if the sum 
of specific and ad-valorem duties is lower. 
EU minimum requirements:  The minimum level of taxation, a bove which Member States are free to 
set their national excise duties: 
• the monetary minimum requirement or the "minimum of €64 ”: The national excise 
duties should be at leas t €64 per 1000 cigarettes; 
• the proportional minimum requirement or the“57% rule":  The national excised duties 
should account for at least 57% of the retail se lling price inclusive of all taxes (TIRSP); 
• "the escape clause" : Member States which levy an excise duty of at least €101 per 1000 
cigarettes for cigarettes need not comply with the 57% rule; 
• the "5% to 55% rule":  The specific component of exci se duty may not represent less 
than 5% or more than 55% of the amount of th e total tax burden (proportional and specific 
excise duty plus VAT).  
MPPC:  the Most Popular Price Category: this is  the current benchmark for the EU minimum 
requirements on cigarettes. Only this category of cigarettes has to comply with the minimum 
requirements. 
TIRSP:  the Tax Inclusive Retail Selling Price: the su m of the pre-tax price, the ad-valorem and 
specific excise duties and the VAT. 
WAP:  the Weighted Average Price: The total price of all quantities divided by the total quantity. 
 
EN 6   EN IMPACT  ASSESSMENT   
SECTION  1: PROCEDURAL  ISSUES  AND  CONSULTATION  OF INTERESTED  
PARTIES 
Lead Directorate-General : DG TAXUD 
Other Involved Services : SG, LS, SANCO, COMP, ECFIN, ENTR, OLAF 
Agenda Planning/Work Programme reference : 2006/TAXUD/011  
• Organisation and timing 
The impact assessment was launched in February 20 07. The following services were invited to the 
inter-service group: the Secretariat general, the Directorates-General LS, SANCO, COMP, ECFIN, 
ENTR and OLAF. The group had three meetings. It s output was presented during the meeting on 31 
March 2008. 
• Collection of data 
Data on the tobacco markets was collected from the Member States. 26 Member States have provided 
data. Only Romania had no data available on the 2005 and 2006 market. Consequently the Romanian 
tobacco market could not be taken into  account in this impact assessment. 
• Consultation and expertise 
The assessment is based on the wide range of contri butions produced by various stake holders through 
various means such as the Public Consultation,  position papers, articles, and meetings.  
Consultation methods, main sectors target ed and general profile of respondents 
Written questionnaires have been sent to the ministri es of finance of the Member States in order to 
give their views on a possible overall review of excise rates and structures for tobacco products on the basis of a questionnaire. The replies were used as a basis for subsequent bilateral discussions between 
the national administrations and the Commission departments concerned. 
Associations and other stakeholders  (trade, health, etc.) were also invited to submit preliminary 
position papers and were given th e opportunity to discuss the issues in bilateral meetings. 
In addition, a study2has been undertaken to assess the need to  adapt the structure of excise duties. 
On 30 March 2007, an online consultation was launched in order to gather the views of the public and 
stakeholders on reforming excise duty for manufac tured tobacco. The consultation was based on a 
position paper which gave information on the current  fiscal situation and on the possible options for 
change which could be considered.  
A total of 87 external contributions were received in response to the consultation. Of these, 39 were 
from tobacco industry, 21 were from the national a nd international health organisations (including 
                                                 
2 Study on the collection and interpretation of data concerning the release for consumption of cigarettes 
and fine-cut tobacco for the rolling of  cigarettes; KPMG December 2005 
 
EN 7   EN public institutes), 10 from government or ministries of  Member States, 7 were from European citizens 
and 10 others (not possible to specify).  
How responses have been taken into account 
All responses received were analysed and the main  results were published on the Commission website. 
They can be summarized as follows.  
The tobacco industry : the great majority of the industry supports a change in the current tax system 
for cigarettes. The preferred option is the abolition of the MPPC and the application of the minimum 
rate of €64 to all cigarettes. Ho wever, simultaneously the industry  advocates an abolition of the 
minimum requirement of 57%. In the event that th is option is not realistic, they could accept the 
implementation of a minimum requirement on the basi s of a weighted average price as a second-best 
option. A clear majority calls for retention of the mixed structure of excise duties on cigarettes 
(consisting of a specific and an ad-valorem component ). However a large number of the contributions 
favour increased flexibility in determining the struct ure of excise duties on cigarettes and, in this 
connection call for an easing of the restriction on the specific component (5% to 55% rule).  
The vast majority of contributions from the tob acco sector are opposed to any increase in taxation. 
Only a few contributions call for an increase in the le vel of taxation for health or for an adjustment or 
indexation of tax rates in line with inflation. 
As regards fine-cut and smoking tobacco the indu stry argues against any increase in taxation. The 
contributions also discuss the relatively small market share as compared to cigarettes and the so-called 
'buffer function' given the expansion in illicit trade.  
Finally, the great majority of the industry supp orts a change in the definition of other tobacco 
products. 
All 21 contributions from the national and international organisations in the health sector  take the 
same line 
Generally speaking, the health sector takes the vi ew that the different t obacco products should be 
taxed as far as possible at the same rate since, from a health perspective, as there is no justification for 
any differentiation, whether significant or not. The contributors point throughout to the enormous importance of the issue for society as a whole give n the large number of deaths and serious illnesses 
that can be traced back to tobacco consumption and the huge costs this imposes on Member States' 
health systems. Taxes on tobacco products should,  therefore, be raised in order to reduce the 
affordability and thus the availability of cigarettes. As regards the structure of tobacco taxation, there 
is a clear preference and a direct call for specific taxation as this guarantees equal treatment for all price categories of tobacco products. 
A total of 10 contributions were received from other stakeholders
, which included, for example, 
consumer associations and associations representing the parents at European or national level. The 
following points in particular were made: the importance not only of tax measures but also of 
comprehensive political measures, particularly in the form of  awareness-raising and information 
measures aimed at protecting young people. The stakeholders also allied themselves with the 
demand made primarily in the health sector for ta x increases, since taxes are an essential component of 
the price. Only seven individuals  sent in contributions. As to substance, the individuals concerned 
mainly called for higher taxation, even at the expens e of the internal market, or for harmonisation with 
the high-taxing Member States as a means of protecting public health.  
A full report of the consultation results has been published under the following link:  
http://ec.europa.eu/taxation_customs/c ommon/consultations/tax/index_en.htm  
 
EN 8   EN The representatives of the ministries of finance   
The Commission and the Member States discussed on  26 September 2007 the consultation paper. 
There is broad support for the abolition of the MPPC-c oncept, for more flexibility as concerns the ratio 
between specific and ad-valorem duties, for an increase  of the taxation level of fine cut tobacco, for an 
adjustment for inflation of the minima for cigars  and pipe tobacco, and for an amendment of the 
definitions. 
Almost all new Member States are opposed to increase of the 64€ minimum requirement for cigarettes 
before the end of the transitional periods. There we re also diverging opinions with regard to the 
alternatives for a benchmark for minimum duties on cigarettes (a single rate or a weighted average 
system). Finally a few Member States were  not convinced of the need for change. 
The Commission took the responses into account a nd as a consequence made some modifications 
to the options under scrutiny.  
SECTION  2: PROBLEM  DEFINITION 
2.1 SUMMARY OF THE CURRENT COMMUNITY EXCISE DUTY ARRANGEMENTS  
2.1.1 Excise duty on manufactured  tobacco other than cigarettes 
The total tax burden (excise and VAT) on cigarettes is often close to 80%. In order to ensure a certain 
level of price competition, excise duties on cigarettes c onsists of an ad-valorem duty (a percentage of 
the price) and a specific duty (a monetary amount per 1000 pieces). By putting more emphasis on the 
ad-valorem duty, the price gap between cheaper and more expensive cigarettes will increase. By 
putting more emphasis on the specific duty, one will obtain the opposite effect. Because of this ad-valorem duty the total tax burden will differ be tween cheaper and more expensive cigarettes. 
The current Community legislation lays down rules both as regards the structure of the duty and the 
minimum level of the rates that must be respected by all Member States. 
Under these rules, excise duties levied on cigarettes must fulfil the following conditions: 
• They must include a proportional  component, calculated on the basis of the maximum retail selling 
price, and a specific  component, levied on each unit of the product. 
• They must account for at least 57% of the retail selling price and be at least €64 per 1000 cigarettes 
for the cigarettes belonging to the most popular price category (MPPC). These minimum requirements refer to the MPPC, because the tota l tax burden differs between cheaper and more 
expensive cigarettes. On 1 January Member States  must ensure that the sum of specific and ad-
valorem excise duties on the MPPC, complies with these requirements. Subsequently the specific 
and ad-valorem excise duties on the MPPC will be applied to all cigarettes. 
• The specific component of excise duty must not re present less than 5% or more than 55% of the 
amount of the total tax burden on cigarettes falling in the MPPC (the proportional excise duty plus 
the specific excise duty and the VAT).  
• In addition, Member States may levy a minimum excise tax. This is a minimum amount of tax 
which will be due per 1000 cigarettes, when the su m of specific and ad-valorem duties is lower. 
This minimum excise tax may not be more th an 100% of the total excise on the MPPC.  
 
EN 9   EN In this report, these concepts will be referred as the “57% rule” , the "minimum of €64 per 1000 
cigarettes, the “MPPC" and the  “minimum excise tax”.  
However there are also a number of derogations and transitional periods: 
• Member States which levy an excise duty of at least €101 per 1000 cigarettes for cigarettes of the 
MPPC need not comply with the 57% rule. This "escape clause" is needed  to ensure that the 
higher-taxing Member States do not have to constan tly raise the excise duty in order to comply 
with the 57% rule. 
• Under their Acts of Accession, a number of ne w Member States were granted derogations to 
postpone the application of the minimum excise du ties for periods ranging from 31 December 2006 
to 31 December 2009. 
2.1.2. Excise duty on manufactured  tobacco other than cigarettes 
The Community rules currently in fo rce relate to cigars and cigarillo s, fine-cut tobacco intended for 
the rolling of cigarettes, and other smoking tobacco. As opposed to cigarettes, Member States can levy 
a wholly proportional excise duty calculated on the basis of maximum retail selling prices, a wholly specific excise duty or a combination of both. In addition, Member States may levy a minimum excise 
tax (without any restriction).  Unlike cigarettes, Member States do no t have to comply with an ad-
valorem and a specific EU minimum requirement, but they may choose between the one and the other. 
The minimum rates  in force since 1 July 2004 are as follows: 
• fine-cut smoking tobacco intende d for the rolling of cigarettes
: 36% of the retail selling price 
inclusive of all taxes or €32 per kilogram; 
• other smoking tobacco : 20% of the retail selling price inclusive of all taxes or €20 per kilogram; 
• cigars and cigarillos : 5% of the retail selling price inclusive of all taxes or €11 per 1000 items or 
per kilogram. 
Under the Act of Accession Estonia was granted a tr ansitional period up to 31 December 2009 to 
postpone the application of the minimum excise duties on smoking tobacco  
2.2. PROBLEMS IDENTIFED UNDER THE CURRENT COMMUNITY EXCISE DUTY ARRANGEMENTS  
• The differences in TIRSP pave the way for substantial cross border shopping and 
smuggling 
An analysis of the prices and excise rates for cigarettes in the EU shows that there are still 
considerable differences between the Member Stat es. Moreover, with the recent enlargement of the 
EU, the tax and retail selling price differentials between Member States has actually widened. For 
example, in 2006 cigarettes belonging to the MPPC were nearly seven times as expensive (all taxes 
included) in the United Kingdom compared to Latvia.  
The following graphs give an overview of ex cise duties and prices of cigarettes in the EU: 
Table 1: Excise duties and TIRSP (MPPC) of cigarettes in Europe in 2006 
 
EN 10   EN 050100150200250300350400
Member StateEuro MPPC
excise tax
MPPC 155 178 62 144 74 208 63 250 205 224 140 88 318 155 32 54 144 181 184 75 138 49 90 94 113 215 378
excise tax 91 103 38 85 37 114 34 160 118 139 81 51 192 91 16 22 82 110 105 43 84 24 49 54 72 106 238AT BE BG CY CZ DK EE FR FI DE EL HU IE IT LV LT LU MT NL PL PT RO SK SI ES SE UK
 
Table 2: Comparison of lowest, weighted average and highest price of cigarettes  
in Member States in 2006 (per 1000 sticks) 150
160,42
55
143,95
59,12
157,45
49,54
182,28
223,33
180
75
66,98
300
160
25,14
31,71
132
151,41
157,89
42,12
125
65,63
89,77
87,5
161,15
305,15174,77
183,96
60,00
167,35
74,14
197,63
66,86
194,09
237,96
214,14
117,39
89,60
322,09
165,12
39,90
49,10
155,49
175,00
188,46
58,61
138,89
78,91
102,83
112,81
201,31
341,58190
210,53
62,5
196,3
101,35
227,8
89,48
198,4
250
230
150
113,7
335
200
63,92
72,4
180
186,35
210,53
82,32
157,5
105,52
118,99
137,5
225,6
391,18
0255075100125150175200225250275300325350375400
AT
BE
BG
CY
CZ
DK
EE
FI
FR
DE
EL
HU
IE
IT
LV
LT
LU
MT
NL
PL
PT
RO
SK
SI
ES
SE
UK
Member StateEuro
lowest price
WAP
highest price 
The differences in TIRSP pave the way for subs tantial cross border shopping and smuggling. These 
cross-border operations create distortions of compe tition in the tobacco market, lead to revenue losses 
and losses of business to retailers on the high-tax si de of the border and undermine health policy 
objectives. Based on an in-depth analysis of the data collected, the aforementioned 2005 study on the 
collection and interpretation of tobacco data on tobacco estimated that total non-domestically taxed 
market penetration in 2004 repr esented approximately 13% of the EU-25 tobacco market whereas 4% 
to 5% consisted of legitimate cr oss-border shopping and 8% to 9% of  illicit trade. However, the non-
domestically taxed part of tobacco consumptions re presents more than 20% in a number of Member 
States. 
As part of the conditions governing the derogations  granted to the new Member States, the other 
Member States were given the possibility to maintain  limits on the quantity of tobacco products that 
individuals could bring into their territories from those new Member States. 11 Member States made use of this possibility. However, in an intern al market without border controls, these quantitative 
restrictions are difficult to enforce.  
• Efforts made by Member States in order to  improve tobacco control are undermined 
by substantial cross-border shopping and also by smuggling 
Smoking is still the biggest single form of avoidable death in the Community. Despite the considerable 
progress already made, the number of smokers is still high – around one third of the Community population – and the health effects are equally signi ficant, with about 650,000 smoking-related deaths 
per year in the Community. Almost half of these deaths are of persons aged between 35 and 69 – well 
below the average life expectancy. Smoking also aff ects the health of non-smokers, particularly in 
vulnerable groups, who are increasingly demanding protection.  
Taxation forms part of an overall strategy of pr evention and dissuasion, which also includes other 
measures aimed at reducing demand such as non-pri ce measures, protection from exposure to tobacco 
 
EN 11   EN smoke, regulation of the contents, etc. However,  according to the World Bank price increases in 
tobacco products are the most effective single inte rvention to prevent smoking. A price increase of 10 
% decreases among adults consumption on average by about 4% in high income countries. More 
importantly, the impact of higher prices is likely to be greatest on young people, who  are more 
responsive to price rises than older people. In a ddition, price increases are an effective policy tool, 
which prevents people from taking up smoking, especially young people, encourages smoking 
cessation, reduces the number of ex-smokers who resume the habit, and reduces in the long run 
average cigarette consumption among continuing smokers.  
For these reasons a steadily growing number of Memb er States has increased excise duties on tobacco 
products. However, as stated above, the efforts of Member States to increase the prices of cigarettes 
and control tobacco consumption are undermined by a lack of coordination. In this context it is 
important to note that there is asymmetry between th e effects of relatively high and of relatively low 
tax rates. A Member State that raises its tax rate  relative to taxes in neighbouring Member States 
increases cross-border shopping, but the costs are largel y internal to the Member State concerned. On 
the other hand, a Member State that reduces the tax rate or maintains a low tax rate attracts cross-
border shopping and revenues, thus imposing external  costs on other Member States. In order to 
restrict the negative effects on other Member States of  a (relatively) low tax-policy, there should be an 
EU-wide minimum floor for excise duty at an effec tive level to address Internal Market and Health 
objectives. 
• The current arrangements for cigarettes complex, not transparent and result in 
division of markets and di stortions of competition 
Member States have to check their compliance with  the 57% rule and the minimum of €64 per 1000 
cigarettes regarding the MPPC on 1 January of each y ear and, in case of changes of the MPPC, adjust 
their national rates accordingly.  
During the consultation process, the MPPC received a certain amount of criticism. 
• The MPPC fluctuates due to changes in ta x components, price st ructure, external 
components, etc. Consequently, government tax revenues are volatile as changes in the 
MPPC can trigger tax rate changes. As the M PPC is outside the control of governments, it 
makes tax planning difficult. 
• The link between the excise duty rates and the MPPC also distorts price competition 
between tobacco manufacturers. Dominant tobacco manufacturers can increase the tax 
burden of their competitors by strategically sh ifting the prices of their brands so as to 
create a different MPPC.  
• The MPPC concept was introduced more than 30 years ago. At that time, the national 
cigarette markets were typically dominated by one brand that was clearly ‘the most popular’. However, currently the average mark et share of the MPPC is circa 35%. In 
addition, the current international market environment is very dynamic, with many 
different brands at different price points. Price changes are a regular feature. 
• In certain Member States the MPPC falls within a low price category while in other 
Member States it falls within  a high price category. Consequently, the MPPC cannot 
ensure a uniform minimum level of tax in all Member States. 
• Finally, from a health perspective it is not ju stifiable to use the MPPC as the reference 
point for setting minimum tax requirements. All cigarettes without exception are harmful 
to health, not just those in the MPPC. The growing popularity of cheap and discount 
brands is a concern in many Member States. Therefore minimum tax rates should be applied to all cigarette price categories. 
 
EN 12   EN Consequently, the Commission takes the view that the MPPC as benchmark for minimum rates is no 
longer in line with Internal Market and health objectives.  
• Since different categories of manufactured to bacco are taxed differently, imbalances in 
taxation lead to substitution by other categori es of tobacco products, which entails distortions 
of competition and undermines health objectives  
Fine-cut tobacco and cigarettes have different characteristics; nevertheless they are in a way 
competing with each other. Currently Member Stat es are free to determine the excise structure for 
fine-cut smoking tobacco intended for the rolling of ci garettes (specific or ad-valorem or mixed). The 
EU minimum requirement for fine-cut tobacco is set at 36% of the retail selling price inclusive of all 
taxes, or €32 per kilogram. As a result, there are situations today where the tax level on hand-rolled 
cigarettes is less than 30% of the tax level on ciga rettes. The substantial di fferences in tax levels 
among Member States on fine-cut tobacco encour age smuggling and cross border shopping between a 
number of neighbouring countries. In addition, the ga p between the level of taxation of cigarettes and 
fine-cut tobacco gives rise to substitution. In  the period 2002 to 2006 the weighted average of 
quantities of cigarettes released in the EU-25 decre ased by 15%. However, the quantities of fine-cut 
tobacco increased by around 10% with a clear upward trend in a number of Member States. From a health point of view, both products are equally harm ful and, consequently, there is little justification 
for significant differences in the minimum rates for these products at Community level.  
2.3 Treaty base and subsidiarity principle.  
A legislative proposal would be based on Article 93 of the EC Treaty. It would not fall under the 
exclusive competence of the Commun ity: Article 93 of the Treaty lays down that the Council has to 
adopt provisions for the harmonisation of legislation concerning excise duties to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market. The 
subsidiarity principle therefore applies. 
Although the existence of the current EU minimum rates limits the divergences in national excise duty 
rates on tobacco products, it has not been suffici ent to prevent the persistence of significant 
divergences, despite the increasing attention paid by  Member States to the achievement of health 
objectives in this field. These divergences entail substantial cross border shopping and smuggling, 
which creates distortions of competition in the tob acco market, lead to losses in budgetary resources 
for those Member States applying a relatively high  excise duty and undermines the health policy 
objectives. No EU action would be detrimental sin ce tax policy interaction among Member States has 
not led to a reduction in divergences.  
2.4
 SECTION 4: THE NO POLICY CHANGE OPTION  
2.4.1 The base line scenario for cigarettes  
During recent years, a number of Member States have significantly increased excise duties on 
cigarettes. Since this happened wit hout any coordination at EU level, it gave rise to substantial cross-
border shopping and smuggling. In addition, with th e recent enlargement of the EU, the tax and retail 
selling price differentials between Member States ha ve actually widened. This gap resulted again in 
significant cross border shopping and smuggling. Wh en all new Member Stat es eventually comply 
with the minimum requirement of €64 per 1000 cigarett es, the price differentials will be around to 1 to 
4. Given these remaining tax differentials, it is unlikely that tax driven cross-border flows will 
decrease.  
The 2005 study on the collection and interpretation of data on tobacco estimates that total non-
domestically-taxed consumption in 2004 represente d approximately 13% of the total EU tobacco 
 
EN 13   EN market. The markets share of legitimate circum vention represented 4% to  5% and of illegitimate 
circumvention 8% to 9% of the EU tobacco market. In the EU, more than 12% of the population lives 
near internal frontiers. These people have an incen tive to buy cigarettes across the border when price 
differences are or become substantial due to tax hi kes and/or enlargement of the EU. For example: 
– France: substantial cross-border shopping  in Belgium, Luxembourg and Spain; 
– Germany: substantial cross-border shoppi ng in the Czech Republic, Luxembourg and 
Poland. 
Although the total non-domestically-taxed consum ption in 2004 represented approximately 13%, it 
should be noted that in a number of Member States the non-domestically-taxed consumption 
represents more than 20% (in particular in the ma in markets such as FR, DE and UK). In addition, 
Industry sources indicate that since the latest acce ssions the tax driven cross-border flows from EU-12 
towards EU-15 Member States are increasing significantly.  
No EU action would maintain these divergences. 
• The effects on the national budgets. 
There is an asymmetrical relationship between the effects of relatively high and relatively low tax 
rates. Member States with a relative high tax rate  face cross-border shopping and illicit trade, which 
leads to revenue losses. On the other hand, Member St ates that maintain a relative low tax rate attract 
cross-border shopping and illicit trade, thus imposi ng external costs on other Member States. The 
baseline scenario would maintain the negative eff ects on other Member States of low taxing policies. 
In 2006 the excise duties collected on cigarettes re presented in the EU Member States (including 
Romania and Bulgaria) almost 70 billion Euro, whic h results in significant amounts of revenue being 
misallocated.  
In addition, without coordination of tax increases, a number of Member States will refrain from further 
increases. This will result in a loss of potentia l tax receipts and undermine health objectives (see 
further).  
However, it should be said that a part of the illicit trade consists of third country smuggling. 
According to the same study, also Member States sharing land borders with third countries (Estonia, Finland, Hungary, Latvia, Lithuania, Poland, Slovakia) suffer from third country smuggling as tax rates in the neighbouring third countries (e.g. Balk an countries, Belarus, Russia and Ukraine) are 
considerably lower. Although it is minor when  compared to the EU non-domestically-taxed 
consumption, this problem is probably increasing. As a result some Member States are in a position 
where they face on the one hand illicit trade from third countries and on the other hand attract cross-border shopping and illicit trade from EU Member States. The budgetary loss resulting from third country smuggling is consequently compensated by imposing external costs on other Member States. The base-line scenario would maintain this situation.  
• The effects on health objectives 
Smoking is still the biggest single form of avoidabl e death in the Community and one of the leading 
causes of morbidity and mortality in the EU, with about 650,000 smoking-related deaths per year in 
the Community. A number of Member States have significantly increased excise duties on cigarettes 
for reasons of tobacco control. For example, the excise duties on cigarettes increased in the EU-15 on 
average by 33% over the period 2002-2006. Over the same period the consumption of cigarettes went 
down by more than 10%. Since this happened withou t coordination with neighbouring Member States, 
it has given rise to substantial cross borde r shopping and smuggling. This increase of non-
domestically-taxed consumption undermines the health objectives and discourages further increases in taxes for reasons of health protection.  
 
EN 14   EN Without an increase of the minimum level of ta xation in the Community, tax competition between 
Member States will prevent Member States wishing to further implement a policy that takes into 
account health policy objectives, from doing so. In addition, it will sustain the level of non-
domestically-taxed consumption undermini ng directly the health objectives. 
Consequently, unless all Member States start to coor dinate their health polic y, the base-line scenario 
will lead to a lower level of tobacco control at EU level and would hamper taxation as a means to 
reduce cigarette consumption.  
• The effects on the industry 
The current link between the excise duty rates and the MPPC distorts competition between tobacco 
manufacturers. Dominant tobacco manufacturers can increase the tax burden of their competitors by 
strategically shifting the prices of their brands. No policy change would confirm and maintain the 
market distortions. 
2.4.2 The base line scenario for fine-cut toba cco intended for the rolling of cigarettes  
The EU minimum requirement for fine-cut tobacco is set at 36% of the retail selling price, or €32 per 
kilogram. For cigarettes the minimum requirements are 57% of the retail selling price inclusive and 
€64 per 1000 pieces. As a result of this gap, there are situations where the price of fine-cut tobacco is 
less than 30% of the price of cigarettes (see a nnex). Moreover in 2007 the excise duties on fine-cut 
tobacco were 10 times higher in some Member States (e.g. UK and IRL) as compared to others (e.g. in HU) (see annex 14). 
The substantial differences in ta x levels among Member States on fine-cut tobacco give rise to 
smuggling and cross border shopping between certain neighbouring countries. A number of Member 
States with high taxes on cigarettes (in particular FR and UK) and which have aligned excise duties on 
cigarettes and fine-cut face a substantial infl ow from cross-border shopping and smuggling.  
In addition, in the period 2002 to 2006 the quantities of cigarettes released in  the EU decreased by 
approximately 13%. However, the quantities of fine-c ut tobacco increased by around 10% in the same 
period. The lower levels of excise duties in a number of Member States lead to tax-induced distortions 
of competition. From a health point of view, both products are harmful and, consequently, there is 
little justification for significant differences in th e minimum rates for these products at Community 
level. 
 
Unless Member States under their own volition adjust the taxation of fine-cut and cigarettes, the no 
policy change option will maintain a situation of tax-induced distortions of competition between the 
two products and further undermine health protec tion objectives. In addition, it will maintain 
significant cross-border shopping imposing external costs on a number of Member States.  
SECTION  3: OBJECTIVES   
Pursuant to Article 4 of Council Directive 92/79/ EEC and of 92/80/EEC the Commission is required 
to examine the taxation of tobacco every four years, taking into account the smooth operation of the single market, the real value of excise duty rates and the wider objectives of the Treaty.  
Although excise duty is primarily an instrument fo r generating revenue at national level, policy-
making in this area has to take the wider objectives of the Treaty into account. Given the characteristics of manufactured tobacco products, policy in this field should pay particular attention to 
health considerations, taking stock of C ouncil Recommendation of 2 December 2002 on the 
prevention of smoking and on initiatives to improve tobacco control and of the Framework 
 
EN 15   EN Convention on Tobacco Control, negotiated under th e auspices of the World Health Organisation.  
More in particular the polic y objectives are the following: 
• Future policy should ensure the smooth operati on of the single market and narrow the 
differences in TIRSP levels in order to protect Member States budgetary and health 
objectives. 
Substantial differences in TIRSP of tobacco products lead to cons iderable cross-border shopping and 
smuggling and both undermine the budgetary and health  objectives of the Member States and distort 
the functioning of the internal market. Therefore future policy should aim to ensure the smooth 
operation of the single market and attempt to  narrow the differences in TIRSP levels. 
Member States' budgetary objectives: Tobacco excise duties represent between 0.7% and 7.3% of 
the total tax revenues of the Member States. Consequently for a number of Member States the budgetary impact is significant and future policy sh ould seek to safeguard Member States' budgetary 
objectives.  
Table 3: Tobacco excise duties as a % of total tax receipts in 2005 
 
However, as stated above, there is an asymmetrical relationship between  the effects of relatively high 
and relatively low tax rates. Member States with a ta x rate that is high relative to taxes in neighbouring 
Member States faces cross-border shopping and ill icit trade, resulting in revenue losses and the 
undermining of health objectives. On the other hand,  Member States that ma intain a low tax rate 
attracts cross-border shopping and revenues, thus im posing external costs on other Member States. 
Therefore, future policy should reduce the duty differe ntials between Member States that give rise to 
cross-border shopping and intra-EU-smuggling, in  order to safeguard Member States budgetary 
objectives and to reduce fiscal externalities. 
Member States' health objectives: The efforts of Member States to increase the prices of cigarettes 
and control tobacco consumption are undermined by cross-border shopping and illicit trade. Therefore, 
future policy should also reduce the duty differentials  between Member States that give rise to cross-
border shopping and intra-EU-smuggling, in order to safeguard Member States health objectives. 
Increases of the minimum rates:  Elimination of tax induced cr oss-border shopping and intra-EU-
smuggling would require harmonisation of rates and st ructures. However the Council has rejected this 
approach and has adopted a system of minimum ra tes. Minimum rates provide a "safety net" for 
 
EN 16   EN Member States by ensuring that other Member Stat es do actually apply excise duty and that the levels 
are meaningful. This makes it easier for Member States to pursue their fiscal policies, without the 
threat of those policies being undermined by other Member States and, in pa rticular, by cross-border 
shopping and smuggling.  
In order to reduce the cross bor der flows, the gap between th e cheapest and most expensive 
cigarettes in the EU should be reduced. Howe ver taking account of the geographical spread of 
the enlarged EU, this would only solve a part of the probl em. There are significant differences 
in the level of excise duties between the EU Me mber States that have or had derogations to 
the current minimum rates and the other Member  States, but also in-b etween the EU-15 as 
well as in between the new Member States. 
Consequently the impact on the Internal ma rket should be examined from two angles: 
– reducing the gap between the cheapest and mo st expensive cigarettes in the EU;  
– reducing the gap at regional level, taking in to account the geographical spread of the 
enlarged EU.  
Finally those minimum rates should on the one hand reflect the recent evolution in the 
Internal Market, where the excise duties have been increased significantly, inter alia for 
reasons of health protection. On the other hand they should take account of the recent 
enlargements and the fact that most new Member States have excise duty levels which are low 
in relation to the averag e level in the EU-15. As a balanced approach th ey should be close to 
the average excise level in the EU-27, wh ich was around €94 in 2006 (assuming that all 
Member States would have reached the minimum of €64) and around 61%.  
• Future policy should contribute to the Community objectives of creating a high level of health 
protection 
A number of Member States have in recent years increased taxation of tobacco as a key measure as 
part of a comprehensive tobacco control strategy. 
At Community level, the Council recommendation of 2 December 2002 on the prevention of smoking 
and on initiatives to improve tobacco control (200 3/54/EC) recommends in Article 7 that Member 
States should adopt and implement appropriate pri ce measures on tobacco products so as to discourage 
tobacco consumption. Additionally, the Commun ity has widely developed regulations on the 
manufacture, presentation and sale of tobacco products  (directive 2001/37/EC) and to ban any tobacco 
cross-border advertising (directive 2003/33/EC). Re gulatory measures are complemented with other 
initiatives such as prevention campaigns.  
Moreover, these health policy cons iderations have become more important recently. In 2005, the 
European Community became Party to the Worl d Health Organization’s Framework Convention on 
Tobacco Control (FCTC). Article 6 of the FCTC reco mmends tax policies so as to contribute to health 
objectives aimed at reducing tobacco consumption. In  this context, it should be noted that the 
"European Strategy for Tobacco Control" (ECT C), adopted by the Regional Committee for WHO 
Europe, has set as the principal target to at  least double the average annual reduction of smoking 
prevalence in the WHO Euro Region. This was at the time of the adoption of the strategy standing at 
nearly 1%, consequently it means bringing smoking prevalence down by 2% per year. 
Official releases for consumption of cigarettes in the EU decreased during the period 2002-2006 by ca. 
13%.This percentage takes into account intra EU cro ss-border flows, but needs to be adjusted for the 
 
EN 17   EN illicit trade from third countries towards the EU. C onsequently the real decline of cigarette 
consumption in the EU can be estimated at slightly more than 10%.3.  
In order to trigger a similar decline in consumpti on over the coming 5 years as well as to contribute to 
a decline of smoking prevalence of 2% per year, furt her increases in excise duties would be desirable. 
Taking into account a price elasticity of -0.43 as s uggested by the World Bank, a 25% price increase is 
needed to achieve a 10% reduction in demand.  
However, because of the current tax and price diffe rentials, tax competition between Member States 
hinders Member States wishing to implement an autonomous policy that would take into account 
health policy objectives, from doing so.  Therefore, future tax policy should reduce tobacco 
consumption by increasing the overall level of taxa tion and consequently the retail selling prices. 
Finally, in order to optimise the reduction in demand, the tax increases should as far as possible 
involve price increases of cheaper cigarettes in th e markets. They should be spread over as any  
Member State as possible. However they should not entail price levels which are disproportional when 
compared to the local purchasing power in the Member States.  
• Future policy should simplify and modernise th e current arrangements and create a level 
playing field for producers, importers and retailers 
The current arrangements were introduced 30 years ago.  At that time, national cigarette markets were 
typically dominated by one brand that was clearly ‘the most popular’. However, currently, the average market share of the MPPC is circa 35%. In addition,  the current international market environment is 
very dynamic, with many different brands for sale at  different price points. Price changes have become 
a regular feature. The current arrangements are not designed for this new situation in most Member 
States. Therefore, future policy should modernise the arrangements and create a level playing field. 
In particular, the link between the excise duty ra tes and the MPPC distorts competition between 
tobacco manufacturers. Dominant tobacco manuf acturers can increase the tax burden of their 
competitors by strategically shifting the prices of their brands so as to create a different and higher 
price category which becomes the MPPC. In additi on, the vast majority of Member States have 
recently introduced minimum taxes, which are a percentage of the excise duties due on MPPC. 
Consequently the manufacturers of cigarettes form ing the MPPC can, by increasing the price of the 
MPPC, increase the minimum tax burden on its competitors' products. 
In addition, minimum excise duties should be define d in a comparable and equal way for all Member 
States and should apply to all tobacco products of a pa rticular category. This is currently the case for 
minimum duties for most tobacco products other than cigarettes. However for cigarettes minimum 
duties are determined only with reference to the MPPC. The MPPC as an average represents a 
minority share of the cigarette markets (around 35%).  Moreover, in certain Member States the MPPC 
falls within a low price category while in other Memb er States it falls within a high price category. 
Consequently, the MPPC cannot ensure a unifo rm minimum level in all Member States. 
Finally, it should be noted that under current provisions government tax revenues are volatile as 
changes in the MPPC can trigger tax rate cha nges. As the MPPC is outside the control of 
governments, using this concept as a reference point  makes tax planning difficult. The future policy 
should therefore pay attention to the need for budgetary stability. 
• Future policy should reduce tax-induced substitution of cigarettes by other categories of 
tobacco products 
                                                 
3 Only the increase of inflow from third countries between 2002 and 2006 should be taken into account, 
which is most probably less than 3% of the total market. 
 
EN 18   EN Since the current Directives maintain the differe nce in excise duties on cigarettes and on fine-cut 
tobacco, the Commission, upon request of a numb er of Member States, entered the following 
statement in the Council minutes on Directive 2002/10/EC: " The Commission states that, in its next 
review report provided for under Article 4 of Directive 92/79/EEC and Directive 92/80/EEC, it will 
present sufficient elements in ord er to proceed to an overall review of the possibility to bring the 
structure of excise duties for fine-cut smoking tobacco  into line with the struct ure of excise duties for 
cigarettes." 
Given that EU minima for cigarettes are set by way of overall minimum requirements, the alignment 
of taxation between cigarettes and fine-cut tobacco should proceed on the basis of the structure and the 
rates of the EU minimum requirements.  
As stated in the previous Commission report4, given the different characteristics of the two products, it 
seems reasonable that the minimum excise for fine-cut  tobacco could be fixed at about two thirds of 
the minimum excise incidence for cigarettes . Such a ratio would allow Member States to take into 
account the difference between a semi-finished and a finished product. 
SECTION  4: POLICY  OPTIONS 
The impact assessment considers four policy approaches:  
The first approach (Option A) consists of not intervening further at Community level (the no policy 
change option). 
The second approach consists of changing only the structure of excise duties  on cigarettes.  
It is proposed to abolish the concept of the MPPC  as benchmark for minimum requirements. Instead of 
the MPPC, two basic approaches can be considered.  
• The minimum requirement could be applied to all cigarettes on the market. This would follow the 
principle of excise duty rates for other excisable products (alcohol, energy products, other tobacco 
products). 
• Taking account of the taxation principles regarding ci garettes for the last 35 years, the MPPC could 
also be replaced by a WAP. This could be seen as an alternative which on the one hand better 
represents the market realities in the EU in 2008 bu t keeps the reference to the price of cigarettes.  
Due to the fact that the minimum requirement consis ts of two different elements (57%, €64), the above 
mentioned two basic approaches have to be assessed w ith view to each of these elements in order to 
verify the impact of anyone of those changes on the various Member States.  
This leads to the following options: 
– either apply the 57% rule (Option B)  and/or the minimum of €64 per 1000 cigarettes (Option C)  
to all  cigarettes; 
– or apply the 57% rule (Option D)  and/or the minimum of €64 per 1000 cigarettes (Option E)  in 
accordance with weighted average prices .  
Simultaneously the impact is assessed of providing more flexibility as concerns, in particular, the 
relationship of specific versus ad-valorem duties (the  "5% to 55% rule").  
                                                 
4 COM(2001) 133 final, 14.3.2001 
 
EN 19   EN The third approach  consists of changing in addition to the structure also the minimum rates of excise 
duties on tobacco products. Therefore the minimum ra tes of excise duties on cigarettes are increased, 
either the 57% and/or the minimum of €64 per 1000 cigarettes. ( Options B+, C+, D+ and E+ ) 
The fourth approach (Option F)  consists, in parallel to the othe r options, to change the structures 
and minimum rates of excise duties on other products , in particular fine-cut, in order to avoid 
substitution of cigarettes by less taxed tobacco products. 
SECTION  5: THE  OPTIONS  CONCERNING  CIGARETTES:  ANALYSIS  OF IMPACTS 
5.1. THE ECONOMIC IMPACTS  
Several aspects have to be examined: impact on ta xes and prices, on the functioning of the internal 
market, on demand, consumption and health, on indust ries (distortions of competition, administrative 
costs…) and the budgetary impacts.  
5.1.1. The impact on excise duties and the prices of cigarettes  
5.1.1.1  DIRECT EFFECTS ON EXCISE DUTIES AND THE PR ICE OF CIGARETTES OF THE DIFFERENT 
OPTIONS WITHOUT INCREASES OF THE CURRENT MINIMA . 
Option B: the effect of applying the 57% rule to all cigarettes Because excise duties on cigarettes consist of a specifi c and an ad-valorem duty, the % of total excise 
duties will be lower on more expensive cigarettes. Applying the 57% rule to all cigarettes would 
introduce a de-facto minimum ad-valorem rate for a ll cigarettes and would, in principle entail, an 
increase of taxation of upper and, in some cases, middle market segments. It would not affect the 
cheaper market segments. 
In the vast majority of Member States this opti on would have no impact, since the general taxation 
level as compared to the pre-tax price relatively hi gh, or because the MPPC is a premium brand (see 
annex table 1). However for eleven Member States (with a lower level of taxation compared to the pre-tax price or where the MPPC is a low priced cigarette) this would result in tax increases for upper 
and middle market segments. The impact would be  significant in DK, NL and SE. However, these 
Member States currently qualify for the "escape clause". For other Member States it would have a 
minor impact on the level of the excise duties, 
although  the market share affected is significant in a 
number of Member States (e.g. AT 63%; LU 75%). 
Option C: The effect of applying the minimum of €64 per 1000 to all cigarettes 
Again in the vast majority of Member States this option would have no impact, because the excise 
duties on all brands already exceed €64 per 1000 cigare ttes. In the other Member States where this is 
not the case, increases in excise duties will be neces sary for brands which are cheaper than the MPPC, 
only to the extent, however, that there is no minimum duty in force equal to the tax due on the MPPC. Applying 2006 excise rates, the followi ng Member States will be affected:  
Table 4: The effect of appl ying the minimum of €64 per 10 00 on all cigarettes in 2006 
Member State Market share below the 
MPPC % in 2006 %- points increase in 
excise duty needed to 
reach excise level of the 
MPPC in 2006 
Bulgaria 33,28% 3,04 
Czech Republic 56,13% 0 
Estonia 56,05% 3,04 
Greece 41.21% 7,28 
 
EN 20   EN Hungary 37,92% 0,56 
Latvia 27,24% 1,29 
Lithuania 54,59% 5,6 
Poland 88,15% 12,43 
Romania  No data No data 
Slovakia 79,21% 6,21 
Slovenia 11,32% 0,56 
Spain 16,05% 1,37 
Source: questionnaire to Member States  
It should be noted that the position of the MPPC in the price-range of cigarettes changes from year to 
year. It is likely that the more the tax burden on cigarettes increases in the new Member States, the 
more the MPPC will be down-traded with the resu lt that the market share of cigarettes below the 
MPPC will fall. 
In order to achieve a minimum of €64 per 1000 on a ll cigarettes, Member States will have to apply a 
minimum excise tax of at least €64. Most Member States apply already a minimum tax which is close to the level applicable to the MPPC: CZ 100%; SK, RO and SI 90%; PL: 80% and EL 75%. 
Consequently, for these Member States, no (o r only minor) tax increases are needed. From 2007 
onwards ES applies a minimum duty of €70 and is therefore no longer affected. The impact will be 
more important for BG, EE, LV and LT where the ma rket share below the MPPC is considerable, and 
no minimum duties are in force yet. This is also the case for Poland where an important part of the 
market is below the MPCC. Consequently much will depend on the market position of the MPPC at 
the end of the transitional periods in these Member States.  
Option D: The effect of applying the 57% rule in accordance with weighted 
average  prices  
(WAP ) 
If the current minimum incidence of 57% was mainta ined and applied on a weighted average basis, 
small tax increases could become necessary in a limited number of Member States. The most affected 
Member States currently qualify for the “ escape  clause” (see annex table 2). 
In general, applying the 57% rule in accordance w ith weighted average prices would not lead to major 
changes. Apart from DK, NL and LUX, which are slightly under 57%, all Member States would comply with the 57% rule. In SE the impact would be significant, but SE (as well as DK and NL) 
would qualify for the escape clause. 
Option E: The effect of applying the minimum of €64 per 1000 cigarettes rule in accordance with 
weighted average prices (WAP)  
In the majority of Member States the excise duties on all brands already exceed €64 per 1000 
cigarettes. Applying the minimum of €64 on the basis of weighted 
average  prices will only have a 
minimal impact on a limited number of Me mber States (see annex table 3) . 
It will have no impact on Member States that  have already reached the €64 on MPPC in 2006. 
Consequently only the new Member States with tran sitional periods might be affected. However only 
BG, LT, PL and SK will probably have an excise yield on WAP under the €64, and therefore would 
have to increase their excise duties as compared to the current system. 
The impact of the options on the TIRSP of cigarettes 
All things being equal, the impact on the prices of cigarettes will be in line with the impact on excise 
duties, multiplied by the VAT rate. The change of the benchmark for minimum  requirements will 
only have a minor impact on the excise duties; therefore it will also have a minor impact on the prices 
of cigarettes. 
Conclusion 
In general, all the options would have no direct impact on the level of excise duties in the vast 
majority of Member States. Only a limited number of Member States would be affected.  
 
EN 21   EN Table 5. 
0,001,503,004,506,007,509,0010,5012,00
Member State%-points
Option B Option C Option D Option EOption B 0,37 0,002 0,50 0,51 1,97 0,04 0,0003 0,21 0,02 0,09 0,15 0,81 1,71 0,10 0,00 0,29 0,004 5,02
Option C 3,04 3,04 7,28 0,56 1,29 5,60 12,43 0,00 6,21 0,56 1,37
Option D 0,07 0,23 0,71 0,78 0,00 4,48
Option E 2,2 2,12 10,42 0,00 4,76AT BE BG CY CZ DK EE FI FR DE EL HU IE IT LV LT LU MT NL PL PT RO SK SI ES SE UK
 
Option B  (57% on all) would increase the excise duties on value-for-money and/or premium 
cigarettes in eleven Member States . Although the market share affected  is significant in a number of 
Member States (e.g. AT and LU, see table 3), it would only entail a small increase of excise duties. DK, NL and SE currently qualify for the escape clause. . 
Option C (€64 on all) will increase the excise duties on th e cheaper market segments in nine Member 
States . The impact will be more important for EE, LV and LT where the Market share below the 
MPPC was considerable in 2006, and no minimum duties are in force yet. This is also the case for 
Poland where an exceptionally large proportion fe ll below the MPCC in 2006. However, all will 
depend on the market position of the MPPC at the end of the transitional periods in these Member 
States. 
In general  Option D  (57% on WAP) would not lead to major changes . NL, DK and LU are slightly 
under 57%. Only SE was in 2006 at  52.5%. However SE, DK and NL qualify for the escape clause. . 
Option E (€64 on WAP) would probably affect four new Member States. BG, LT, PO and SK will 
probably have an excise yield on WAP slightly under  the €64, and therefore would have to increase 
their excise duties as compared to the current system . However, again, all will depend on the market 
position of the MPPC at the end of the tr ansitional periods in these Member States. 
5.1.1.2 Impact of the different options on excise duties and the price of cigarettes in case 
of increases in the current minimum rates  
Tables 4.a and 4.b in annex give an overview of the impact on the WAP under Option B, Tables 5.a 
and 5.b under Option C, Tables 6.a and 6.b under Option D and Tables 7.a and 7.b under Option C. 
An increase in the 57 % rule ( Option B+ and D+ ), combined with an updated escape clause, would 
have a significant impact on excise duties and prices of cigarettes  in AT, LU, IT, PT, SI and EL  and a 
moderated impact on BE, NL, HU, CZ, CY and (only under Option B+) SK. However, it would hardly 
have an impact on ES (because pre-tax prices are low). 
Currently the 57% rule is combined with an  "escape clause" for high-taxing Member States5. The aim 
is to avoid an increase in the excise duties in tho se Member States where they are already high, and 
consequently to avoid an increase in the gap be tween high and low taxing Member States. From an 
Internal Market perspective this ru le should be maintained, but could be increased to €122 (see further: 
                                                 
5 Member States which levy an excise duty of at least €101 per 1000 cigarettes for cigarettes of the 
MPPC need not comply with the 57% rule. 
 
EN 22   EN 5.1.2). With a capping of €122, four high taxing Memb er States would not be affected by any increase 
of the 57% rule: UK, DE, FR and IE, and for SE the impact would be negligible. 
All things staying equal, increases of the €64 rule ( Option C+ and E+ ) would have a significant 
impact on the new Member States  (except MT and CY) and on LU, PT, ES and EL . 
Option  B+ would first increase the tax burden on premium and value for money cigarettes (leaving 
the cheap market untouched). Subsequently it would gradually transform into a pure ad-valorem duty.  
Option  C+ would first increase the tax burden on cheap cigarettes (leaving the premium market 
untouched). Subsequently it would stepwise transform into a pure specific duty.  
Consequently, for these two options, in order to ma intain a mixed system (ad-valorem and specific) 
Member States would have to set th eir national rates at an appropriate level above the EU minimum, 
depending on the desired tax structure. 
Increases of the minima under Option D+ and E+  would as such not affect the relation between the 
different price categories . Member States would have full flexibility to determine the taxation structure 
(in particular the relation between ad-valorem and sp ecific duties) that best suits the requirements of 
their national market. 
5.1.2. The impact on the Internal Market 
As said before, the i mpact on the Internal market shoul d be examined from two angles: 
– reducing the gap between the cheapest and mo st expensive cigarettes in the EU;  
– reducing the gap at regional level, taking in to account the geographical spread of the 
enlarged EU.  
Option B and B+: the effect of applying th e 57% rule to all cigarettes (and subsequent 
increases) 
Applying the 57% rule to all cigarettes would in principle increase the price of premium cigarettes and 
consequently would affect cross-border flows of these cigarettes.  
Reducing the gap between the cheapest and most expensive cigarettes in the EU. 
Increases in the 57% rule will not have any impa ct on the gap between the cheapest and most 
expensive cigarettes in the EU since the excise dut y on the cheapest cigarettes represents more than 
65% of the TIRSP as a result of the current monetary minimum requirement of €64.  
Moreover if not combined with an “escape clause“, it would even widen this gap. Currently, the 57% 
rule is combined with an "escape clause" for high-taxing Member States6. The aim is to avoid an 
increase in the excise duties in those Member States  where they are already high and consequently to 
avoid an increase in the gap between high and low ta xing Member States. From an Internal Market 
point of view this escape clause should be maintained. However, its level needs to be adapted to keep 
pace with the evolution of excise duties on cigarett es in the Internal Market. In 2001, when the €101 
was adopted by the Council, the average excise duty on MPPC was €87 At 1 January 2007 it was €120 in the EU 15. Consequently in order to maintain status quo with the situation in 2001, the €101 should 
be increased. An increase to €122 would have the sa me effect as in 2001, namely exempt the five 
highest taxing Member States. 
                                                 
6 Member States which levy an excise duty of at least €101 per 1000 cigarettes for cigarettes of the 
MPPC need not comply with the 57% rule. 
 
EN 23   EN Table 6: TIRSP of cigarettes in the EU-27: 
EU 57% 59% 61% 63% 65% 
lowest €80,72 €80,72 €80,72 €80,72 €80,72 
highest €335 €335 €335 €335 €335 
(Only brands with a national market share of more than 2.5% are taken into account) 
The standard deviation between WAP of 1000 ci garettes in the EU would under this option only 
decrease from €66 (57%) to €63 (65%) (see annex table 4.a). 
Reducing the gap at regional level, taking into account the geographical spread of the enlarged 
EU. 
It should be noted that the 57% limit has not been increased since 1992. Although it reflected the 
average level of taxation in 1992, in the period si nce most Member States have increased their excise 
duties on tobacco, inter alia for reasons of health pr otection. It would also contribute to maintaining 
the current level of approximation between the EU-15 Member States and in case of increases would narrow the gap between the EU15, MT and CY. 
On the other hand it would not entail any approx imation between the EU15, except MT and CY 
Option D and D+: The effect of applying the 57% rule in accordance with weighted 
average prices (and subsequent increases)  
The impact of these options would be similar to Option B and B+. A 57% rule in accordance with 
weighted average prices should also be combined with an "escape clause" for high-taxing Member 
States in order not to increase the gap between high  and low taxing Member States. It will not have 
any impact on the price gap between the cheapest and most expensive cigarettes in the Internal 
Market. 
Option D and D+ would also contribute to maintain ing the current level of approximation between the 
EU-15 Member States as long as the monetary requireme nt is too low to reflect  average taxation levels 
in the Internal Market.  
Option C and C+: The effect of applying the minimum of €64 per 1000 to all cigarettes (and 
subsequent increases) 
Reducing the gap between the cheapest and most expensive cigarettes in the EU. 
Applying the minimum of €64 per 1000 on all cigarettes  would create a tax floor in the Internal 
Market. Increases (up to €100, see below) would si gnificantly reduce the price gap between Member 
States and related cross-border shopping and smuggling.  
Table 7: TIRSP of 1000 cigarettes in the EU-27 
EU minimum duty  €64 €70 €75 €80 €90 €100 
lowest €80,72 €88,04 €94,14 €100,24 €112,44 €124,64 
highest €335 €335 €335 €335 €335 €335 
(Only brands with a national market share of more than 2,5% are taken into account) 
 
EN 24   EN Theoretically, an increase in the monetary minimum requirement to €100 would result in an increase 
of 56% of the lowest TIRSP. In practice it would affect cigarettes in the new Member States and in 
AT, BE, IT, LU, EL and ES (see annex table 5.a). The standard deviation between WAP of 1000 
cigarettes in the EU would decrease from €66 (€64 ) to €51 (€100). Consequently increases of the 
monetary minimum requirement are a better instru ment to achieve approximation of tax inclusive 
prices of cigarettes in the EU and to improve  the functioning of the internal market.  
However, as previously mentioned, a number of new Member States have land borders with 
neighbouring third countries where cigarettes prices ar e significantly below the EU level (e.g. Ukraine, 
Moldova, and Russia). Consequently a sudden incr ease of the monetary minimum requirement would 
probably increase the incentive for smuggling from these neighbouring third countries, if not 
combined with an increase of th e fight against illicit trade.  
Reducing the gap at regional level, taking into account the geographical spread of the enlarged 
EU. 
An increase of the monetary minimum would have li ttle impact on the EU-15 plus Cyprus and Malta. 
An increase to €90 would only affect ES, EL and PT. An increase to €100 would also affect CY and 
IT.  
On the other hand it would significantly approximate the prices of cigarettes in the new Member States 
(The standard deviation between WAP of 1000 ci garettes in the EU would decrease from €23 to €13 
(€90) or even to €11(€100). 
Option E and E+: The effect of applying the minimum of €64 per 1000 cigarettes rule in 
accordance with weighted average prices (and subsequent increases) 
The effect on patterns of demand in the internal  market of applying the minimum of €64 per 1000 
cigarettes rule in accordance with weighted averag e prices would be similar to Options C and C+.  
Increases in the minimum requirements would significantly reduce the price gap between Member 
States and related cross-border shopping and smugg ling. The standard deviation between WAP of 
1000 cigarettes in the EU would decrease from €66,5 (€64) to €51 (€100). However there would be no EU-wide tax floor and depending on the implementation by the individual Member States the bottom-
priced market segments might be cheaper than under a minimum applied to all cigarettes. Consequently from an Internal Market point of vi ew preference should be given to Option C and C+. 
Conclusion 
The standard deviation between WAP of cigarette s in the EU would be the lowest (€51) under Option 
C+ and E+ , as compared to €63 and €64 for Option B+ and D+. Consequently increases in the 
monetary minimum requirement are a better instru ment to achieve approximation of TIRSP of 
cigarettes in the EU and to improve th e functioning of the internal market.   
Option  C and C+ (€64 on all) would create a tax floor in the Internal Market. Increases (up to €100 - 
see below) would reduce significantly the price gap between Member States and related cross-border 
shopping and smuggling.  Increases in the minimum requirements under Option E+  (€64 on 
WAP)would reduce the price gap between Member States and related cross-border shopping and 
smuggling . However the bottom-priced market segments might be cheaper as compared to Option C+. 
Option  B+ and D+  will not have any impact on the pr ice gap between the cheapest and most 
expensive cigarettes  in the Internal Market. Nevertheless they would also contribute to maintaining the 
current level of approximation between the EU-15 Member States as long as the monetary requirement 
is too low to reflect the average taxation level in the Internal Market.  
 
EN 25   EN Consequently as long as the monetary minimum requirement cannot be increased to a level, which 
corresponds at least to the average taxa tion in the Internal Market, one of Option C, C+, E and E+ 
should be combined with either Option B, B+, D or D+ . 
5.1.3 The impact on industry  
5.1.3.1 The impact on competition between different price categor ies of cigarettes 
The link between excise duty rates and the MPPC distorts competition between tobacco 
manufacturers. Dominant tobacco manufacturers can increase the tax burden of their competitors by 
strategically shifting the prices  of their brands so as to create a different and higher price category as 
MPPC. In addition, recently a vast majority of Me mber States have introduced minimum taxes, which 
are a percentage of the excise duties  due on the MPPC. Consequently the manufacturer of the MPPC 
can, by increasing  the price of the MPPC, increase the minimum tax burden on the products of its 
competitors. 
Because excise duties on cigarettes consist of a specifi c and an ad-valorem duty, the % of total excise 
duties will be lower on more expensive cigarettes. C onsequently the options will have an impact on 
the competitive relationship between cheap and premium cigarette and on the related industry. 
Option B and B+: The effect of applying th e 57% rule to all cigarette (and subsequent 
increases) 
Option B and B+ would resolve the fiscal instability and distortions of competition which are currently 
created by the MPPC concept. Applying the 57% rule  to all cigarettes would in principle result in 
increasing taxes for upper price segments in those Member States where the MPPC is not a premium 
brand. 
Increases (especially over 60%) could significantly  increase the price competition between the 
different price-categories of cigarettes.(see annex tabl e 4.c). However, it should also be noted that the 
57% is only a minimum requirement across the EU, and a lot would depend on how the Member 
States implement the 57% rule, taki ng into account the fl exibility to determine the relation between 
ad-valorem and specific duties. 
Option C and C+: The effect of applying the minimum of €64 per 1000 on all cigarettes 
(and subsequent increases) 
Option C and C+ would also make the existing s ituation more transparent and resolve the fiscal 
instability and distortions of competition which are currently created by the MPPC concept. However, applying the minimum of €64 per 1000 on all cigarettes would increase the excise duties on the market 
share under the MPPC in a number of new Member States. Consequently it would result in a 
disadvantaged position for some cheaper brands in  those Member States (see annex table 5.c). 
Again, it should be noted that also the €64 is on ly a European minimum requirement across EU and a 
lot would depend on how the Member States implement it, taking into account that Member States have flexibility to apply a mixed structure.  
Option D, D+, E and E+: The effect of appl ying the 57% rule or the minimum of €64 per 
1000 cigarettes in accordance with  weighted average prices (and subsequent increases)  
These options would also resolve the fiscal instability and distortions of competition which are 
currently created by the MPPC concept. 
 
EN 26   EN Applying the 57% rule in accord ance with weighted average prices would as such not affect the 
relation between the different price categories. It leaves full flexibility to Member States to determine 
the taxation structure (in particular the relation betw een ad-valorem and specific duties) that best suits 
the requirements of their national market.  
Conclusion 
All options resolve the fiscal instability and distortions  of competition which are currently created by 
the MPPC concept. All options would make the existi ng situation more transparent  and would 
simplify the current arrangements. Option B, B+, C and C+ would simplify  current arrangements more 
significantly  as compared to Options D, D+, E and E+.  
Option B  and B+  (57% on all) would in principle in crease the excise duties on value-for-money 
and/or premium cigarettes . Albeit that without increases the impact  in most Member States would be 
minor. Further increases could nevertheless have a significant impact on premium cigarettes. 
Option C and C+ (€64 on all) would in principle increase the excise duties on the cheaper market 
segments in nine Member  States. The impact will be important for EE, LV, LT and PO. However, all 
will depend on the market position of the MPPC at the end of the transitional periods in these Member 
States. 
In general Option D, D+, E and E+  (57% and €64 on WAP) woul d not affect the relationship 
between the different price categories . 
5.1.3.2 The impact on small and medium sized enterprises 
In general small and medium seized enterprises only represent a very minor share in the manufacturing 
of cigarettes (less than  0.5%).  
5.1.3.3 The impact on administrative and operating costs 
None of the options  will entail an increase of administrative costs  for the industry. Operating costs 
(due to the adjustment of prices in response to cha nges in excise duties) will occur but are expected to 
be negligible. 
5.1.4. The budgetary impact 
Table 8 in annex sets out estimates of the impacts (at present values) that the tax rate changes in the 
different scenarios would have on government budgets. It takes into account reductions in 
consumption due to price increase (price elasticity -0.43).  
The yearly total increases of revenue will be as follows: 
Table 8 
Option B+  59% 934.466  61% 2.135.643 63% 3.288.237 65% 4.070.068 
Option D+  831.035 1.980.855 2.987.650 3.796.497 
Option C+  €70 1.165.273  €80  2.429.977 €90 3.727.456 €100 5.209.014  
Option E+  886.295 2.319.773 4.546.278 5.130.658 
In principle, increases of the minimum rates under all Options would entail a significant increase of 
the total receipts from tobacco taxation, notwithst anding reductions in dema nd. However the increase 
 
EN 27   EN will be higher under Options C+ and E+  as compared to Options B+ and D+.  In addition Options C+ 
and E+ will mainly increase the receipts in the new Member States.  
The actual impacts can be expected to be different  for some Member States since a reduction in excise 
duty differentials could lead to a reduction in the present demand shifts between countries, which will 
offset part of the adjustments in excise rates. Th is might lead to a reduction of revenues for a number 
of Member States which currently attract significant revenues from sales of cigarettes consumed in other Member States.  
For example: a Member State, with a significant lo wer level of excise duties on tobacco as compared 
to its neighbouring countries, has 30% of releases fo r consumption which are sold to inhabitants of 
other Member States. As a result of an increase of 40% of excise duties, this Member State attains a taxation level comparable to the neighbouring coun tries, which reduces the cross border sales to 10%. 
The theoretical increase in revenue should be adju sted for the reduction in national consumption as 
well as for the reduction in cross border sales. Assuming a price elasticity of -0.43, the real effect 
would be a reduction in revenue of around 5%. 
5.1.5 Administrative and operating costs for tax administrations  
None of the options  will entail an increase in administrative costs
 for tax administrations. Although 
Options B, B+, C and C+ (all cigarettes) would be simpler to implement, also Options D, D+, E and 
E+ would be easier to administer and more transparent as compared to the current arrangements.  
Under the current arrangements Member States have to determine on the 1 January of every year the 
MPPC. This requires data on all market segments in year n-1. In addition, the MPPC can change significantly from one year to another.  
Options B, B+, C and C+ would remove the need to monitor the markets. In addition, the tax rate and 
structure will be stable and not subject to market fluctuations. Under Options D, D+, E and E+, the tax 
administration will have to determine the WAP on the 1 January of every year. The WAP can be 
calculated by dividing the total TIRSP by the total quan tity (number of sticks) of year n-1. This data is 
available to tax administrations as a result of the re leases for consumption. There would be no need for 
monitoring of the market segments anymore. In addi tion, the WAP are expected not to be subject to 
sudden significant changes.  
5.1.6 The impact on inflation  
Tables 9 in annex set out estimates of the impacts on inflation in the Member States of the different 
options. The estimation takes into account of reducti ons in consumption due to price increases (price 
elasticity -0.43). These estimates can be considered  as the upper limits. The actual impacts can be 
expected to be lower since a reduction in excise du ty differentials will lead to a reduction in the 
present demand shifts between countries, which will off set part of the adjustments in excise rates. It 
should also be noted that the impact on inflati on will depend on the impact  of other tax measures, 
which may be taken as a result of the increase in tax revenue. For instance, if the additional tax 
revenue is used recycled to finance a corresponding tax cut in other indirect taxes, the impact on 
inflation will be lower.  
Without increases of the minimum rates all options would have no or only insignificant impact
 on 
inflation in Member States.  
Increases in the minimum rates would have a more significant impact on inflation under Options C+ 
and E+  as compared to Options B+ and D+.  
Option B+  (57% on all) and Option D+  (57% on WAP) would not affect or affect insignificantly the 
inflation in the following Member States: Bulgar ia, France, Germany, Ireland, Latvia (Only Option 
D+), Poland, Spain and UK. All th ings being equal, Luxembourg would experience a significant rise 
 
EN 28   EN in the inflation rate under both Options. However the actual impacts can be expected to be lower since 
a reduction in excise duty differentials will lead to a reduction in the present demand shifts between 
Luxembourg and neighbouri ng countries. Increasing the minimum rate to the level of 63% and more 
would affect the following Member States by 0.3 pe rcentage points or more: Austria, Cyprus, Greece, 
Italy, Slovakia, Czech Republic, Hungary, Malta and Portugal. On average the impact on inflation in 
the EU would be slightly lower under Option D+ as compared to Option B+. 
Option C+  (€64 on all) and Option E+  (€64 on WAP) would not affect or only affect insignificantly 
the inflation rate in the EU-15 (except Greece,  Luxembourg, Portugal and Spain). Increasing the 
minimum rate to the level of €90 per 1000 cigarettes and more would affect the inflation rate with 0.6 
percentage points or more in the countries of th e EU-12 (except Cyprus and Malta) and in Greece It 
would affect the inflation rate with 0.3 percentage  points or more in Luxembourg and Spain. However 
on average the impact on inflation in the EU would be slightly lower under Option E+ as compared to Option C+.  
5.2
 THE SOCIAL IMPACTS  
5.2.1 The impact on health objectives 
Taxation forms part of an overall strategy of prevention and dissuasion which also includes other 
measures aimed at reducing such as non-price meas ures, protection from exposure to tobacco smoke, 
regulation of the contents, etc. According to th e World Bank price increases in tobacco products are 
the most effective single measure that can be take n to prevent smoking. A price increase of 10% will 
decrease consumption on average by about 4% in  high-income Member States among adults. More 
importantly, the impact of higher prices is likely to be greatest on young people, who are more responsive to price rises than older people. In additi on, price increases are an effective policy tool to 
prevent people from taking up smoking especially among young people, encourage smoking cessation, 
reduce the number of ex-smokers who resume the habit, and reduce in the long run the average 
cigarette consumption am ong continuing smokers.  
5.2.1.2 Options B, C, D and E: no increases of the minimum rates 
Applying a monetary minimum per 1000 on all cigarettes (Option C) would allow for the setting of a 
tax "floor" for all cigarettes sold in the EU. It would increase the prices of cheap cigarettes in a 
number of low taxing Member States. However th e current minimum of €64 per 1000 on all cigarettes 
would not be sufficient to address health concerns in the internal market as a whole. The average 
excise yield in the EU-15 is currently €120, nine  Member States have an excise yield over €100 and 
two even over €200. The average excise yield in  the EU-27 will be around €94, when all new member 
States have reached the current minima. Consequen tly the minimum rates are not in line with the 
increase average excise yield in the EU.  
Options B and D  (change of the benchmark for the 57% rule) would have no impact from a health 
perspective, as it would only have a minor impact on, in particular, cheap cigarettes. 
On the other hand, Option E  (€64 on WAP) raises some questions from a health perspective, as . it 
would reduce the minimum requirements for some Member States which is not desirable from a health point of view. 
5.2.1.3 Options B+, C+, D+ and E+: increases of the minimum rates 
Official releases for consumption of cigarettes in the EU decreased during the period 2002-2006 by 
around 13% (see table below). This percentage take s into account intra EU cross-border flows, but 
needs to be adjusted for the in crease of the illicit trade from third countries towards the EU. Industry 
sources estimate currently that illicit trade fro m third countries is around 3.5% of total EU 
consumption. Although no data is available on the e volution of the third country illicit trade over the 
 
EN 29   EN last 5 years, the real decline of cigarette consumption in the EU can be estimated at slightly more than 
10%. 
Table 9: Releases for consumption of cigarettes - 2002-2006 (1000 pieces) 
EU-27 2002 2003 2004 2005 2006 2002/2006
Austria 15.358.733 15.062.233 14.463.704 13.280.238 13.883.290 -10% 
Belgium 14.314.440 14.286.561 13.634.112 13.384.484 13.705.663 -4% 
Cyprus 2.017.325 1.985.432 1.655.603 1.921.873 1.888.343 -6% 
Czech Rep. 19.096.775 25.613.577 22.459.838 26.231.340 28.262.528 48% 
Denmark 7.156.722 7.872.682 8.177.705 7.762.472 8.215.985 15% 
Estonia 2.294.900 2.239.173 2.189.850 2.421.679 2.277.728 -1% 
Finland 4.923.954 4.798.725 4.929.521 5.078.000 4.986.000 1% 
France 80.529.400 69.647.800 54.924.400 54.810.412 55.772.177 -31% 
Germany 145.152.720 132.603.170 111.716.210 95.826.690 93.465.500 -36% 
Greece 31.987.518 32.369.492 35.185.190 34.408.444 33.383.128 4% 
Hungary 18.319.609 19.435.456 13.853.849 14.184.287 15.810.596 -14% 
Ireland 7.015.555 6.294.855 5.330.593 5.419.638 5.857.276 -17% 
Italy 105.215.836 101.581.626 98.846.737 92.822.302 93.807.356 -11% 
Latvia 3.787.340 3.994.500 5.062.364 4.197.236 4.753.872 26% 
Lithuania 4.979.270 3.666.203 2.957.084 3.721.841 5.216.700 5% 
Luxembourg 5.780.790 5.610.803 6.374.169 5.309.000 4.745.000 -18% 
Malta 596.247 576.900 565.376 589.151 578.686 -3% 
Netherlands 17.024.215 17.080.472 14.999.591 13.654.000 13.963.000 -18% 
Poland 82.047.368 80.244.262 75.283.084 87.553.826 79.769.525 -3% 
Portugal 17.924.867 19.623.143 18.069.016 17.134.790 18.963.003 6% 
Slovak Rep. 4.989.533 2.997.609 4.564.499 9.410.743 4.786.986 -4% 
Slovenia 4.794.979 4.611.836 4.487.482 4.556.764 4.947.442 3% 
Spain 90.615.611 92.333.287 93.261.002 92.699.536 91.834.325 1% 
Sweden 7.656.792 7.482.187 7.281.953 6.859.511 7.674.016 0% 
UK 56.088.000 53.952.287 52.620.073 50.503.000 49.011.000 -13% 
Bulgaria 22.612.855 26.245.083 23.043.814 20.596.677 14.836.821 -34% 
Romania  na  na  na 36.490.906 32.452.729 -11% 
Total EU 15 606.745.153 580.599.323 539.813.976 508.952.517 509.266.719 -16% 
Total EU 12 
(excl RO) 165.536.201 171.610.031 156.122.843 175.385.417 163.129.227 -1% 
Total EU 27 
(excl RO) 772.281.353 752.209.353 695. 936.819 684.337.934 672.395.947 -13% 
This trend is mainly due to the EU-15  where releases for consumption of cigarettes went down by 
16%. Over the same period the excise duties on ciga rettes of the most popular price category increased 
on average by 33%. This trend is mainly driven by  FR and DE which have significantly increased the 
excise duties on cigarettes over the last five years. Some other Member States, such as UK and IE had 
already increased significantly the excise duties before 2002. 
On the other hand, in the EU-12 (excl. RO) releases for consumption decreased on average by only 
1%. There is no data available to compare the evolution of excise duties during 2002-2006. However from the accession until the end of 2006, there has been  on average an increase of 34% in the excise 
duties on the most popular price category. This in crease in excise duties has not entailed a similar 
decrease in releases for consumption compared to the EU-15. This is main ly because in the EU-12 
historically cigarettes were cheap in relation to  local purchasing power as well as because of cross-
border sales to the EU-15 in a number of new Member States (e.g. CZ). However in the coming years, 
 
EN 30   EN further increases will be needed in most of the EU -12 Member States to reach the EU minima by the 
end of the transitional periods.  
In order to trigger a similar decline in consumpti on over the coming 5 years further increases in excise 
duties would be desirable. Taking into account a price elasticity of -0.43 as suggested by the World Bank, a 25% price increase is needed to achieve a 10% reduction in demand. With a view to attaining 
this objective, the EU minimum requirements (whi ch were agreed upon in 2002) should not only 
consolidate the current situation, but should be further increased over the following 5 years. 
Taking into account that the average excise yiel d in the EU-27 will be around €94 when all new 
member States have reached the current minima, th is impact assessment examines the impact of 
increases up of the monetary minimum to €90 and €1 00. As such an increase would entail an increase 
of the average excise burden to around 63%, it also  examines the impact of an increase of the 
proportional minimum requirements. 
5.2.1.3.1 Increasing the minimum of €64 per 1000 cigarettes (Option C+ and E+) 
Theoretically, an increase of the monetary minimum re quirement to €90 would result in an increase of 
around 40% of the lowest TIRSP and would entail a pot ential reduction in demand of 17%, taking into 
account a price elasticity of -0.43. An increase of the monetary minimum requirement to €100 would result in an increase of around 55% of the lowest  TIRSP and would entail a potential reduction in 
demand of 22.5%. However, as most Member States are far above €64 in practice the effect would be 
less. 
An increase to €90 would more or less consolidate the current situation in LU and PT. It would affect 
by more than 10 % the price of cigarettes in the new Member States and in ES. (SI 23%, SK 36%, PL 
47%, LT 33%, LV 29%, HU 29%, EE 28%, CZ 30%,  BG 36%, EL 22% and ES 7%, see table 10 in 
annex). 
An increase to €100 would more or less consolidate th e current situation in AT and IT. It would affect 
by more than 10 % the price of cigarettes in the new Member States and in LU, PT, EL and ES. (SI 
33%, SK 48%, PL 61%, LT 45%, LV 41%, HU 40%, EE 40%, CZ 41%, BG 50%, EL 32%, ES 28%, 
PT 14% and LU 9%, see table 10 in annex). 
It should be noted that  as it concerns a minimum requirement above which Member States are free to 
increase their national rates, it would pave the way fo r further increases of excise duties on cigarettes, 
also by those Member States which already have a high level of taxation.  
5.2.1.3.2 Increasing the "57% rule" (Option B+ and D+) 
Another alternative consists in increasing the 57%  rule in order to achieve health objectives. 
Given that pre-tax-prices are mainly related to the purchasing power of the Member States, the 57% 
rule ensures a minimum tax incidence that takes a ccount of the purchasing power in all Member States 
and, if increased, would be a tool to re duce cigarette consumption and demand.  
Theoretically, an increase of the 57% rule to 65% w ould entail a price increase by more than 25% and 
consequently, taking into account a price elastic ity of 0.4, would offer a potential reduction in 
consumption of 10%. However, on the one hand, it would not affect those Member States where 
cigarettes are currently low priced (certain new Memb er States, but also for example ES). On the other 
hand, it should be combined with an "escape clause " for the high taxing Member States in order to 
prevent high taxing Member States being forced to  increase their excise duties further, which would 
entail a widening of the price differentials in the In ternal Market. Consequently the impact in practice 
would be moderated (see table 10.c in annex).  
 
EN 31   EN An increase to 63% would not affect BG, EE, FR, DE, IE, LV, LT, PL, SK, ES and UK It would more 
or less consolidate the current situation in BE, CZ, DK, FI and HU. It would affect by more than 10% 
the price of cigarettes in AU, CY, EL, IT, LU and SI (see table 10 in annex).  
An increase to 65% would more or less consolidate th e current situation in BE, DK, FI, HU and ES. It 
would affect by more than 10% the price of cigarettes in AU, CY, EL, IT, LU, SI, CZ, and PT. It would not affect BG, FR, DE, IE, LV, LT, PL, SK, and UK (see table 10 in annex). 
5.2.1.3.3 Combining increases of the 57% (Option B+ and D+) and the €64 rule (Option C+ and 
E+) 
Since most Member States have set their nationa l rates above the monetary or proportional EU 
minimum requirements, the real impact on current  demand would be modera ted. Consequently, in 
order to trigger an decrease of 10% in consumpti on over a period of 5 years and to spread the efforts 
over a wide number of Member States, the increase in  the 64 € requirement should be combined with 
an increase in the 57% rule. In order to ensure a minimum tax floor for health purposes, at least the 
monetary requirement should be applied to all cigarettes. As it concerns a minimum requirement 
above which Member States are free to increase their national rates, it would pave the way for further 
increases of excise duties on cigarettes, also by those Member States which already have a high level of taxation.  
An increase in prices of approximately 25% could be obtained by combining €90 or €100 and 63% on 
all cigarettes or on WAP. (Increases above 63% would not have much impact anymore on the prices of 
cigarettes because of the capping at €122.) 
The impact in practice would be as follows: 
Table 11 
 €90 on all/63% 
 on WAP €100 on all/63% 
 on WAP €90 and 63% 
 on all €100 and 63% 
 on all 
 price demand price demand price demand price demand 
AT 15,5% 6,6 15,5% 6,6 15,5% 6,6 15,5% 6,6 
BE 8,3% 3,6 8,3% 3,6 8,3% 3,6 8,3% 3,6 
BG 36,0% 15,5 49,1% 21,1 36,0% 15,5 49,1% 21,1 
CY 18,3% 7,9 18,3% 7,9 18,3% 7,9 18,3% 7,9 
CZ 31,0% 13,3 42,6% 18,3 31,0% 13,3 42,6% 18,3 
DK 6,2% 2,7 6,2% 2,7 6,2% 2,7 6,2% 2,7 
EE 28,2% 12,1 39,7% 17,0 28,2% 12,1 39,7% 17,0 
FI 6,2% 2,7 6,2% 2,7 6,2% 2,7 6,2% 2,7 
FR 0,0% 0,0 0,0% 0,0 0,0% 0,0 0,0% 0,0 
DE  0,0% 0,0 0,0% 0,0 0,0% 0,0 0,0% 0,0 
EL 21,2% 9,1 31,3% 13,5 32,2% 13,8 32,2% 13,8 
HU 30,1% 13,0 41,8% 18,0 30,1% 13,0 41,8% 18,0 
IE 0,0% 0,0 0,0% 0,0 0,0% 0,0 0,0% 0,0 
IT 18,8% 8,1 18,8% 8,1 18,8% 8,1 18,8% 8,1 
LV  28,9% 12,4 41,0% 17,6 28,9% 12,4 41,0% 17,6 
LT 32,9% 14,1 44,9% 19,3 32,9% 14,1 44,9% 19,3 
LU 25,4% 10,9 25,4% 10,9 25,4% 10,9 25,4% 10,9 
MT 8,1% 3,5 8,1% 3,5 10,0% 4,3 10,0% 4,3 
NL. 9,9% 4,3 9,9% 4,3 9,9% 4,3 9,9% 4,3 
PL 46,8% 20,1 61,4% 26,4 46,8% 20,1 61,4% 26,4 
PT 8,9% 3,8 13,0% 5,6 21,3% 9,2 21,3% 9,2 
SK 35,8% 15,4 48,2% 20,7 35,8% 15,4 48,2% 20,7 
SI 22,7% 9,8 33,1% 14,2 31,7% 13,6 33,1% 14,2 
ES 17,9% 7,7 28,1% 12,1 17,9% 7,7 28,1% 12,1 
 
EN 32   EN SE 9,8% 4,2 9,8% 4,2 9,8% 4,2 9,8% 4,2 
UK  0,0% 0,0 0,0% 0,0 0,0% 0,0 0,0% 0,0 
A combination of a €90 on all cigarettes and a 63% on WAP would mean on average a probable 
reduction of around 10% in demand in the 22 affected Member States (RO is not included; DE, FR, UK and IE would not be affected since the nationa l rates are above the monetary and proportional EU 
minimum requirements). A combination of a €100 on all cigarettes and a 63% on WAP would mean 
on average a probable reduction in demand of 12%. However, as it concerns only a minimum 
requirement above which Member States are free to  increase their national rates, it would pave the 
way for further increases of excise duties on cigare ttes, also by those Member States which already 
have a high level of taxation. 
5.2.1.3.4 The relation between prices of cigaret tes and the purchasing power in the EU 
The minimum requirements should however also be evaluated in the light of the relation between 
cigarette prices and purchasing power in the Member  States. From a health perspective cigarettes 
should be expensive. But the increase of the minimu m rate should not result in cigarettes becoming 
extremely expensive in terms of local purchasing power in  certain Member States as compared to the 
EU average. The following table indicates the number of 1000 cigarettes (based on WAP)  that could 
be purchases taking into account the nominal local  purchasing power in the Member States in 2006 
and in 2008 (Eurostat forecast). 
Under €90 on all/63% on WAP,  immediate increase s would render prices of cigarettes over expensive 
in BG (and probably also in RO for which no data are available). Cigarettes would also be relatively 
expensive in PL and in LT and LV , however still more affordable th an in e.g. IE, MT and UK would 
be around the price level of FR. Under €100 on all/ 63% on WAP, cigarettes would also become very 
expensive in PL, LT, LV and HU (around 20% and mo re that the EU average). On the other hand 
under both scenarios cigarettes would stay relatively cheap in ES and EL. 
Table12: 
 €90 on all/63% on WAP €100 on all/63% on WAP 
 2006 2008 2006 2008 
Austria 157 169 157 169 
Belgium 146 156 146 156 
Bulgaria 76 89 70 81 
Cyprus 115 122 115 122 
Czech R 150 167 137 154 
Denmark 147 154 147 154 
Estonia 136 158 125 145 
Finland 143 155 143 155 
France 114 121 114 121 
Germany 132 142 132 142 
Greece 170 187 159 175 
Hungary 120 131 110 120 
Ireland 112 121 112 121 
Italy 129 137 129 137 
Latvia 115 136 105 125 
Lithuania 114 133 104 122 
Luxembourg 361 399 361 399 
Malta 100 108 100 108 
Netherlands 157 170 157 170 
Poland 110 126 100 114 
Portugal 118 125 117 124 
 
EN 33   EN Slovakia 128 149 117 137 
Slovenia 158 177 146 163 
Spain 195 207 180 190 
Sweden 139 150 139 150 
UK 86 92 86 92 
Average 140 153 135 148 
The simulation does not take into account inflation of the pre-tax prices, which might increase the 
WAP over the coming years. On the other hand furt her increases of the PPS, especially in the new 
Member States might balance the increase in WAP. 
5.2.1.3.5 The impact on the gap between prices of cigarettes in the EU 
Increases of the 57% rule will not have any impact  on the gap between the cheapest (as the Member 
States with the cheapest cigarettes of the EU are not affected) and most expensive cigarettes.  
On the other hand increasing the €64 minimum on all cigarettes would increase the price of the 
cheapest cigarettes from €80 to €112 (90) or €12 4 (100). In addition the average TIRSP of the 
cheapest cigarettes in the EU (currently €137) w ould in the event of an increase to €90 be €159, as 
compared to €165 in the case of €100 minimum (see table 11 in annex). 
Therefore with a view on narrowing the gap between the prices of cigarettes in the EU the increase of 
the monetary minimum applied to all cigarettes is th e best means, as it creates a European "tax floor" 
for cheaper market segments. This can not be ach ieved by applying the monetary minimum on WAP.  
Conclusion: 
From a health perspective an increase to €90 on all/63% on WAP would creat e a tax floor and narrow 
significantly the price gap between cigarettes in the EU. It would trigger a probable decrease of 
demand of on average 10% in 21 Member Stat es. In addition, as it concerns only a minimum 
requirement above which Member States are free to  increase their national rates, it would pave the 
way for further increases of excise duties on cigare ttes, also by those Member States which already 
have a high level of taxation. Apart from BG a nd RO it would not render prices disproportionably 
expensive as compared to the local purchasing power in the Member States.  
5.3 Compliance costs 
There are two main causes that fuel non-domestic ta xed consumption: the fact that cigarettes are less 
affordable due to sharp tax increases and the fact that certain Member States share porous land borders 
with low-tax third countries.  
Further approximation of excise duties within the EU and better coordination of price increases on 
cigarettes for tobacco control will certainly contribu te to tackling the problem of illegal trade within 
the EU. It will reduce compliance costs within the Internal Market, where there are no border controls 
anymore. 
However a number of new Member States have land borders with neighbouring third countries were 
the level of taxation and the retail selling prices of tobacco products are low as compared to the EU level. This encourages third country smuggling wh ich undermines the functioning of the internal 
market as well as the EU and its Member States' h ealth policy. Third country smuggling is a simple 
circumvention of customs controls by fraudste rs who smuggle products by various methods 
(concealment, false description and false declaration etc.) from third countries where prices and taxes 
are low.  
 
EN 34   EN Third country smuggling is in particular high in a number of the Member States having land borders 
with third countries. In order to reduce the thir d country smuggling the excise duties are often kept 
low. As a result these Member States attract cr oss-border shopping and illi cit trade towards other 
Member States, thus imposing external costs on the Internal Market. 
Therefore increases of excise duties on cigarettes should be combined with a reinforcement of the fight 
against illicit trade from third countries.  
The fight against illicit trade is mainly a responsib ility for Member States. However, the Commission, 
a signatory to the World Health Organization’s Framework Convention on Tobacco Control (FCTC), 
is playing an active role in the on-going negotiations  to elaborate a Protocol on the Illicit Trade in 
Tobacco Products in accordance with Article 15 of the FCTC. The aim of the Protocol is to develop an 
internationally binding legal instrument to curb th e illicit trade in tobacco products which all of the 
152 countries which have ratified the FCTC will be invited to join.  
Furthermore, in 2004, the Commission and 10 Me mbers States signed an Anti-Contraband and Anti-
Counterfeit Agreement with Philip Morris Interna tional; 26 Members States have now signed this 
Agreement. In December 2007, a Cooperation Agreement between the Commission, 26 Member 
States and Japan Tobacco was signed. These agreemen ts introduce tighter controls on the distribution 
of tobacco products and introduce tracking and traci ng systems to help law enforcement agencies to 
identify the origin of smuggled products. The term s of cooperation with other tobacco companies (IT, 
BAT) are under negotiation. 
In addition, the European Anti-Fraud Office (OLA F) is in the process of placing overseas liaison 
officers in “tobacco hotspots” to facilitate its wo rk with the authorities in countries from which 
contraband and counterfeit is  smuggled into the EU. 
5.2.2 The impact on employment 
The tobacco manufacturing sector is relatively small in terms of numbers of people employed (60.000 
in the EU-25 in 2003). However approximately half of these are employed in Poland, the Netherlands, 
UK and Germany. Consumption has fallen sharply in recent years. Since 1998 there have been 
consecutive annual reductions in th e production index of tobacco produc ts, and, in parallel in the 
employment index. 
Graph 2: Manufacture of tobacco products (NACE Division 16) Evolution of main 
indicators, EU-25 (2000=100)  (Source EUROSTAT) 
Index of production  Index of domestic output 
prices  Index of employment  
708090100110120130140150
1995 1997 1999 2001 2003 2005
Food products, beverages and tobacco
Manufacture of tobacco products 708090100110120130140150
1995 1997 1999 2001 2003 2005
Food products, beverages and tobacco
Manufacture of tobacco products 708090100110120130140150
1995 1997 1999 2001 2003 2005 Food products, beverages and tobacco
Manufacture of tobacco products 
 
EN 35   EN The reduction in employment in the tobacco manufacturing sector is a direct and unavoidable 
consequence of a policy aimed at controlling tobacco  consumption. Consequently further increases in 
excise duties will lead to a further reduction in  consumption and in employment in tobacco 
manufacturing, as well as in the related tobacco  growing, processing and distribution sector. 
5.3 The environmental impacts 
None. Tax increases may entail reduction of toba cco consumption, but this does not necessarily 
contribute to resolving the problem of second hand smoke ('passive smoking'). In respect of this issue smoking bans are more relevant.  
6. PROVIDING MORE FLEXIBILITY TO APPLY SPECIFIC OR AD -VALOREM DUTIES  
Under current Community rules, excise duties levied  on cigarettes must include an ad-valorem and a 
specific component. The specific component of the excise duty may not be less than 5% or more than 55% of the amount of the total tax burden resulting from the aggregation of the proportional excise 
duty, the specific excise duty and VAT levied on these cigarettes. Consequently the ad-valorem 
component (excise duty + VAT) may not be less than 45% or more than 95% of the amount of the 
total tax burden. 
The emphasis Member States put either on the ad-val orem or on the specific element, depends on the 
policy objective pursued.  
Ad-valorem duties increase absolute price differenc es and consequently promote cheaper brands of 
cigarettes. In the past ad-valorem duties were a pplied to favour cheaper local cigarettes above more 
expensive international brands. Ho wever, nowadays ad-valorem duties are mainly attractive for those 
Member States where there is a gr eater risk of a monopolistic situation developing in the market.  
Specific duties reduce the relative price differences  and consequently favour the premium brands. 
While the specific component contributes to minimi se the variability of prices, the ad-valorem 
component underscores those differences, which ca n undermine health driven price policy objectives. 
Consequently specific duties have an advantage from a health point of view.  
It is questionable whether the limitation of the sh are of the specific component vis-à-vis the ad-
valorem component, is still justified taking into account the compulsory mixed excise duty structure 
and the collection of VAT, which is an ad-valorem tax. In particular, if Member States choose to counter cheap cigarettes by further raising their sp ecific duty beyond the 55% limit, and thus reducing 
the price bandwidth, the current rule does not allow them to do so.  
Specific duties do have a number of other benefits. The simulations covered in the 2005 study on the 
collection and interpretation of t obacco data show how a rise in the specific duty component reduces 
the TIRSP bandwidth and opposes cheap prices.  
A 10% increase in the specific excise duties and a scenario that makes all duties into specific duties 
would entail a narrowing of the price differences at EU level by an average of 2.5% and 50% 
respectively. In certain Member States (such as Gr eece, France and Malta for cigarettes and Finland, 
Greece and Italy for fine-cut tobacco) a 100% specifi c excise duty rate would narrow the price range 
by 65%. An opposite trend would occur if ad-valorem  duties were favoured in place of specific duties. 
Setting the specific excise duty at 50% of the total ex cise duties would lead to a narrowing of the price 
gap by 45% in those Member States favouring an ad-valorem excise duty structure and a widening of 
the price gap by between 20% and 60% in Member States favouring a specific excise duty structure. 
As a result, greater reliance on specific duties can lead to further approximation of retail selling prices 
within the EU. Furthermore, as they are based on consumption volumes rather than on prices, they are 
more stable, easier to forecast and to administer , increase the stability of tax revenues and guarantee 
tax revenue independent of  industry price strategies. Consequent ly from an internal market, budgetary 
 
EN 36   EN as well as a health point of view, specific and minimum duties have clear advantages and more 
flexibility should be provided to those Member States that place gr eater reliance on specific excise 
duties or on minimum duties. 
However, in order to avoid a situation of purely specific taxation in one Member State and purely ad-
valorem taxation in a neighbouring Member State,  which would result in cross border flow for 
premium brands from one Member State to a second Me mber State with cheap brands flowing in the 
opposite direction, some consistency in excise tax structures remains desirable. Therefore it seems 
reasonable to provide more flexibility however while maintaining the mixed structure and a 
compulsory minimum ad-valorem duty. Consequently the different options should be evaluated in the 
light of the objective to provide more flexibility to the Member States. 
Option B and B+  (57% on all) would in principle in crease the excise duties on value-for-money 
and/or premium cigarettes. Albeit that without incr eases the impact in most Member States would be 
minor. In case of subsequent increases of the 57%, it w ould stepwise transform into a pure ad-valorem 
duty. This effect will be higher in Member States  with more specific duti es as compared to Member 
States that rely more on ad-valorem duties. Conse quently Option B would not be in line with the 
objective to provide more flexibility to Member States . This restriction would not contribute to 
narrowing the gap between prices and taxes of cigare ttes in the Internal Market and therefore cannot 
be justified neither from an internal ma rket nor from a health perspective.  
Option C and C+ (€64 on all) would create a "tax floor" and in principle increase the excise duties on 
the cheaper market segments in a number Member States. In these Member States it would have the 
same effect as a national minimum excise duty. In case of subsequent increases it might stepwise transform into a pure specific duty. However this Option is the best means to approximate prices and 
taxes of cigarettes in the Internal Market as well as to ensure a minimum price and tax level for 
tobacco control. To a certain extent  there is flexibility for the Member  States to determine the structure 
of the excise duties, but only above the minimum requirement.  
In general  Option D, D+, E and E+  (57% and €64 on WAP) would not affect the structure of the 
excise duties and therefore provide full flexibility to Member States . 
SECTION  6: THE  OPTIONS  CONCERNING  CIGARETTES:  COMPARING  THE  
IMPACTS  IDENTIFIED   
Option A will not solve the problem of distortions of cross-border shopping and smuggling currently 
existing on the tobacco market, which has conseque nces in terms of health protection, revenue and 
employment (increase in low-taxing Member States to the detriment of high-taxing Member States). 
Option A will also not address the problem of substitution and tax induced distortions of competition between the different products of manufactured to bacco. It was therefore not an option that the 
Commission chose to pursue
.  
6.1 Comparing the impacts on prices and demand 
Impact on: Option B  Option C  Option D  Option E  
Direct effect on 
excise duties  and 
prices  without 
increases in 
minimum rates. Increases slightly 
the excise duties 
and prices in upper 
market segments in 11 Member States.  Increase slightly 
the excise duties 
and prices in 
cheaper market segments in 9 Member States.  Does not lead to 
major changes. 
Neutral towards 
price categories. 
 It is likely to affect 
only 4 Member 
States. 
Neutral towards 
price categories. 
 Option B+ and D+  Option C+  and E+  
 
EN 37   EN Impact on excise 
duties and prices  in 
cases of increases in 
minimum rates .  Significant impact on AT, LU, IT, PT, SI 
and EL, a moderate impact on BE, NL, 
HU, CZ, CY and SK, and a minor impact 
on ES. Significant impact on the new Member 
States (except MT and CY) and on LU, 
PT, ES and EL. 
6.2 Comparing the impacts on the differences in TIRSP in the Internal market 
 Option B+ and D+  Option C+  and E+  
Reducing the gap 
between the 
cheapest and most 
expensive cigarettes in the EU  Does not have any impact on the price 
gap. Best instrument to achieve approximation 
in the EU. Reduces significantly the price 
gap and related cross-border shopping and 
smuggling.  
Reducing the gap at regional level, taking into account the geographical 
spread of the 
enlarged EU.  Contributes to more approximation in the 
EU-15 plus CY and MT Has little or no impact on the new 
Member States which had or have derogations to the minimum rates 
Minimum level 
close to average EU  57%:  NO 
59%:  YES 
61%:  YES 
63%:  YES 
65%:  NO 
 €70: NO 
€80: NO 
€90: YES 
€100: YES 
6.4 Comparing the impacts on the industry and th e objectives of creating more transparency 
and simplification. 
 Option B+ and D+  Option C+  and E+  
Creation of a level 
playing field  Yes Yes 
Simplification and 
transparency   Yes Yes 
No increase of 
administrative 
costs  for the 
industry Yes Yes 
6.5 Comparing the other economic impacts  
Impact on: Option B+ Option C+ Option D+ Option E+ 
Direct budgetary 
impact   59% € 934.466.000 
61% € 2.135.643.000
63% € 3.288.237.000
65% € 4.070.068.000
 €70 € 1.165.273.000 
€80 €2.429.977.000
€90 €3.727.456.000
€100 € 5.209.014.000 
  59% € 831.035.000  
61% € 1.980.855.000 
63% € 2.987.650.000 
65% € 3.796.497.000 
 €70 € 886.295.000
€80 €2.319.773.000
€90 €4.546.278.000
€100 € 5.130.658.000
  
 
EN 38   EN This estimation only covers the direct impact as a result of the increases of the 
minimum rates. It has to be increased by the indirect effects as a result of increase of 
excise duties by Member States above the EU minima. However, the actual impacts 
can be different as a result of demand shifts between Member States. 
No increase of costs  
for the tax 
administration . Yes Yes Yes Yes 
6.6 Comparing the social impacts ( Health objectives)  
Impact on: Option B+ Option C+  Option D+ Option E+  
Increase of the price 
of the cheapest cigarettes  Affect mainly 
upper markets Increase of the 
lowest TIRSP  Neutral towards 
price categories Neutral towards 
price categories 
A minimum tax 
floor (cheaper 
cigarettes)  No  Yes  No No 
Spread of the 
impact on demand  
in the EU Almost no impact 
on (new) Member States where pre-tax prices are 
relatively low Almost no impact 
on most of EU-15 Member States  Almost no impact 
on (new) Member States where pre-tax prices are 
relatively low Almost no impact 
on most of EU-15 Member States 
No No No No Reduction of 
demand  of 10% 
In order to trigger a reduction in demand of 10% the Options must be combined. An 
increase to €90 on all and 63% on WAP (Option C+ and D+)  would trigger a 
probable decrease of demand of on average 10%  in 21 Member States (RO not 
included). In addition it would pave the wa y for further increases of excise duties on 
cigarettes, also by those Member States wh ich already have a high level of taxation. 
Relation with local 
purchasing powe r Apart from BG and RO an increase to €90 on  all and 63% on WAP would not render 
prices disproportional expensive as compared  to the local purchasing power in the 
Member States. 
 
Impact on 
employment in the 
tobacco industry Yes Yes Yes Yes 
6.7 Providing more flexibility  
Impact on: Option B and B+ Option C and C+  Option D and D+ Option E and E+  
More flexibility  No To a certain extent. Yes Yes 
 
EN 39   EN SECTION  7: THE IMPACTS ON TOBACCO PRODUCTS OTHER THAN CIGARETTES AND THE 
SHIFTS IN CONSUMPTION (SUBSTITUTION )  
7.1 Fine-cut tobacco 
Official releases for consumption of cigarettes in the EU 27  decreased during 2002-2006 by around 
13%. Conversely, the releases for consumption of fi ne cut tobacco increased by around 11% mainly as 
a result of the substitution of cigarettes by fine-cut tobacco. However it should be noted that the fine-
cut market is only around 10% of the cigarette market. 
Table X: Releases for consumption of fine cut tobacco 2002-2006  
 (kg) 
EU-27 2002 2003 2004 2005 2006 2002/2006
Austria 259.000 272.000 298.000 396.000 422.900 63% 
Belgium 8.417.000 8.327.000 8.429.000 8.180.707 9.425.583 12% 
Cyprus 62.000 97.000 152.000 170.518 192.799 211% 
Czech Republic** 629.400 650.400 190.300 423.300 481.957 -23% 
Denmark 902.200 855.200 675.300 577.000 552.000 -39% 
Estonia 8.000 8.000 10.000 12.680 10.680 34% 
Finland 949.000 931.000 880.000 883.000 796.000 -16% 
France 5.720.900 5.980.000 6.969.500 7.008.800 7.107.073 24% 
Germany* 14.441.300 14.834.100 15.400.000 14.700.900 18.747.400 30% 
Greece 800.700 819.000 964.000 1.038.884 1.247.809 56% 
Hungary 757.701 1.159.668 1.027.501 895.180 739.374 -2% 
Ireland 135.568 111.904 112.320 95.972 107.264 -21% 
Italy 285.520 324.510 463.255 593.460 677.589 137% 
Latvia 6.700 7.500 8.200 14.000 18.500 176% 
Lithuania na 57.151 14.306 11.500 12.718 na 
Luxembourg 3.194.000 2.983.000 3.006.000 2.970.423 2.845.418 -11% 
Malta 19.060 19.850 27.170 30.850 27.290 43% 
Netherlands 13.130.839 12.943.061 12.087.666 10.970.000 10.811.000 -18% 
Poland 1.060.000 1.727.000 2.583.000 828.000 496.000 -53% 
Portugal 302.830 287.370 326.450 391.470 358.480 18% 
Slovak Republic 33.527 19.837 24.000 13.000 26.000 -22% 
Slovenia 30.445 28.392 26.642 16.040 19.120 -37% 
Spain 1.275.416 1.785.347 2.254.601 2.684.910 2.612.660 105% 
Sweden 886.000 825.000 909.000 966.000 800.000 -10% 
UK 2.864.039 2.893.447 3.052.281 3.189.180 3.453.780 21% 
Bulgaria 500 700 1.300 2.000 8.300 1560% 
Romania na na na na na na 
Total EU 15 53.564.312 54.171.938 55.827 .374 54.646.706 59.964.956 12%
Total EU 12   
(excl LT, RO)  2.607.333 3.718.347 4.050.113 2.405.568 2.020.020 -23%
Total EU 27 
(excl LT, RO)  56.171.645 57.890.285 59.877 .486 57.052.274 61.984.976 10%
DE*: excluding pre-portioned tobacco 
BE, CY, FI, ET, EL, LV, LU, LT, BG, SE: including other smoking CZ**: From July 2005 the figures indicate 
the total quantity of other smoking to bacco and fine-cut tobacco together.   
 
EN 40   EN The fine-cut market is of minor importance in  the new Member States. There was a decline of 
23% during 2002-2006. In most new Me mber States there is no signi ficant tax differential as 
compared to cigarettes.  
Data collection 
Because the market for fine-cut tobacco is relativel y small in a number of Member States and because 
there is no compulsory mixed structure for fine -cut tobacco, most Member States do not collect 
detailed data on the fine-cut tobacco market. In addition, as the current minimum requirements apply 
to all fine-cut products, there is no official MPPC available. Consequently for methodological reasons 
the comparison is based on WAP in those Member States where fine-cut tobacco has a reasonable 
market share (and where data was available)7. In order to give an overview of the possible impact in 
all Member States, the impact is also assessed in comparison to the MPPC8 as determined by the 
industry. As in the case for cigarettes, no data is available for Romania. 
Option A: no policy change 
The substantial differences in ta x levels among Member States on fine-cut tobacco give rise to 
smuggling and cross border shopping between certain neighbouring countries. In particular a number 
of Member States with high taxes on cigarettes and which have aligned excise duties on cigarettes and 
fine-cut face a substantial inflow fro m cross-border shopping and smuggling.  
In addition, in the period 2002 to 2006 the quantities of cigarettes released in  the EU decreased by 
approximately 13%. However, the quantities of fine-c ut tobacco increased by around 10% in the same 
period. The lower levels of excise duties in a numbe r of Member States entail tax-induced distortions 
of competition. From a health point of view, both products are harmful and, consequently, there is 
little justification for significant differences in th e minimum rates for these products at Community 
level.  
Unless Member States under their own volition adjust the taxation of fine-cut and cigarettes, the no 
policy change option will maintain a situation of tax-induced distortions of competition between the 
two products and further undermine health protecti on purposes. In addition, it will maintain cross-
border shopping which imposes external co sts on a number of Member States.  
Option F: Changing the minimum rates of excise  duties on fine-cut tobacco in order to avoid 
substitution of cigarettes by less taxed tobacco products  
Fine-cut tobacco and cigarettes have different char acteristics. Nevertheless cigarettes and fine-cut 
remain ultimately in competition with each other as smoking products. There are no relevant studies 
available on the cross-price elasticity of cigarettes and fine-cut tobacco9. As stated in the previous 
report10, given the different characteristics of the tw o products, it seems reasonable that the minimum 
rates for fine-cut tobacco should be fixed at about tw o thirds of the minimum rates for cigarettes. Such 
a ratio would allow Member States to take into account the difference between a semi-finished and a 
finished product, differences in cost price between th e two products and the re latively labour-intensive 
process of manufacturing fine-cut tobacco. This ratio is widely accepted by the stakeholders. 
                                                 
7 The most recent available WAP date from 2004 (the 2005 KPMG study). 
8 Data on 2007 from ESTA (European Smoking Tobacco Association). As for cigarettes, no 
representative data is available for Romania. 
9 The cross-price elasticity will depend inter alia on non-quantifiable factors such  as such as traditions, 
culture, fashion, social environment which differ fr om Member State to Member State. An assessment 
would require tax and consumption data per Member State over a sufficient long period, which is not 
available. 
10 COM(2001) 133 final, 14.03.2001 
 
EN 41   EN 7.1.1 The excise structure for fine-cut tobacco 
7.1.1.1 The structure of the minimum rates  
Since the current Directives maintain the differe nce in excise duties on cigarettes and on fine-cut 
tobacco, the Commission, upon request of a numb er of Member States, entered the following 
statement in the Council minutes on Directive 2002/10/EC: " The Commission states that, in its next 
review report provided for under Article 4 of Directive 92/79/EEC and Directive 92/80/EEC, it will 
present sufficient elements in ord er to proceed to an overall review of the possibility to bring the 
structure of excise duties for fine-cut smoking tobacco  into line with the struct ure of excise duties for 
cigarettes." 
The minimum requirements for cigarettes consist of  a compulsory ad valorem minimum (57%) and  a 
monetary minimum (€64). Conversely, the EU minimum requirements for fine-cut tobacco are set at 36% of the retail selling price inclusive of all taxes, or
 €32 per kilogram. Member States may choose 
between complying with an ad valorem or with a monetary minimum requirement. Consequently, in 
those Member States that apply an ad valorem ta xation on fine cut, there is no monetary minimum 
requirement such as there is for cigarettes. As a resu lt, there are situations today where the tax level on 
hand-rolled cigarettes is less than 30%  of the tax level on cigarettes.  
In order to assess the possibility of aligning the st ructure of the minimum requirements for fine-cut 
tobacco with those for cigarettes, this impact as sessment examines the introduction of a combination 
of a proportional minimum and  a monetary minimum for fine-cut 
Table 12.a in annex contains a simulati on of the impact of these options on the level of taxation in 
those Member States where fine-cut tobacco has a re asonable market share. Scenario 2 and 4 gives the 
best approximation between average TIRSP for fine  cut in the selected Member States as well as 
between cigarettes and fine cut. As in the case for cigarettes, a monetary minimum duty is the best approximating factor from an Internal Market pers pective. Again, as for ci garettes, from a health 
perspective a high specific minimum duty is also th e best means to ensure a minimum price and tax 
level of the cheaper market segments.  
Consequently, the introduction of a compulsory moneta ry minimum for fine-cut would be in line with 
internal market and health objectives.  
7.1.1.2 Flexibility to apply ad valorem or specific duties at national level 
Currently Member States are free to determine th e excise structure for fine-cut smoking tobacco 
intended for the rolling of cigarettes (specific or ad valorem or mixed). Fo r cigarettes the national 
excise duties must include a proportional component and a specific component. In addition, the 
specific component should not represent less than 5% or  more than 55% of the amount of the total tax 
burden on the MPPC.  
The public consultation made clear that the vast major ity of stakeholders are opp osed to any restriction 
of the current flexibility in the field of fine-cut t obacco. In addition, since the objective is to provide 
more flexibility to Member States for cigarette taxation, it would not be desirable to restrict 
simultaneously for fine-cut. 
Consequently, given that EU minima for cigarett es are set by way of overall minimum requirements, 
the alignment of taxation on cigare ttes and fine-cut tobacco should proceed on the basis of minimum 
rates, leaving Member States with the flexibility to determine the structure of the taxes (in the case of 
fine cut this could be specific or proportional or mixed). 
 
EN 42   EN 7.1.2 The monetary minimum requirement 
7.1.2.1 The methodology to ensure a proper relationship between cigarettes and fine-cut 
As stated, given the different characteristics of the two products, the minimum rates for fine-cut 
tobacco should be fixed at about two thir ds of the minimum rates for cigarettes. 
On the one hand, a two thirds relationship of th e minimum proportional requirement would result in a 
minimum incidence for fine-cut tobacco of 38% as compared to 57% for cigarettes, as both minimum requirements refer to TIRSP. 
On the other hand, the monetary minimum requirement for fine-cut refers to kilograms of tobacco, 
while for cigarettes it refers to 1000 sticks. Therefore a relationship should be determined between the 
weight of fine-cut and 1000 sticks of cigarettes. 
The ISO norm on measuring tar and nicotine in ha nd-rolled cigarettes (ISO norm 15592-3) refers to 
0.4 and 0.75 gram of tobacco per hand-rolled cigare tte. Although it was not designed with the aim of 
establishing a relationship for taxation purposes, it gives an indication on the minimum and maximum 
weight. On the basis of 0.75 gram per cigarette (t he maximum weight), the weight of 1kg smoking 
tobacco would correspond to at least 1333 factory made cigarettes. 
However, as factory-made cigarettes predominantly include a filter while hand-made smoking articles 
predominantly do not, additional tobacco weight e quivalent to the filter has to be considered. 
Consequently the weight of 1kg smoking tobacco wo uld correspond to 1000 factory made cigarettes. 
Under the first hypothesis, mathematically, in order to reach at least two thirds of the €64 minimum on 
1000 cigarettes (which weigh about 750 gram) the mi nimum specific duty on fine-cut tobacco would 
have to be increased to €56 per kilogram. In the second hypothesis, where 1kg corresponds to 1000 
cigarettes, in order to obtain at least two thirds of the €64 minimum on 1000 cigarettes (which are supposed to weigh about 1kg) the minimum specific  duty on fine-cut tobacco would have to be 
increased to €43 per kilogram.  
Although in most cases the packaging of fine-cut  tobacco does not mention a comparison with the 
equivalent number of cigarettes, annex 13 gives an overview of a number of new fine-cut products 
which are marketed referring to the maximum equivalent  numbers of cigarettes. It should be noted that 
in all cases listed in annex 13 the weight of 1kg smoking tobacco would correspond to more than 1333 
factory made cigarettes. However, most of th ese products, often called "volume tobacco", contain 
expanded tobacco, have a relatively small market sh are and are not representative for the whole fine-
cut market.  
Consequently there are no clear-cut arguments in favour of a particular relationship between the 
weight of fine cut and the corresponding number of  cigarettes. As an ab solute minimum a 2:3 
relationship between minimum rates for fine cut to bacco and for cigarettes should be fixed at 1kg 
corresponding to 1000 sticks, however it should be taken into account that consumers can get more 
cigarettes out of 1kg, even more than 1333. The fo llowing analysis will consider the impact of two 
hypotheses, namely 1000 and 1333 sticks. 
7.1.2.2 The impact of increases of the moneta ry minimum requirement on the excise duties on 
fine cut 
Graphs a and b in annex 14 show the impact on the excise duties in the Member States under both 
hypotheses compared to the excise duties on ciga rettes at 1 January 2007 on MPPC basis. 
Assuming 1kg smoking tobacco corresponding to 1000 factory made cigarettes (minimum €43) , it 
would entail a rather small increase for BE, BG , ES, CY, LV, LT, PL, SI and SK and a more 
 
EN 43   EN significant for EE, HU, CZ and PL. The main market s for fine-cut tobacco as well as the increasing IT 
market, would experience hardly any or no impact at  all. Within the main markets, only in LU would 
there be a noticeable impact. It would affect the excise duties on fine cut in almost all new Member 
States which still had derogations to the minimum ra tes for cigarettes on 1 January 2007. However as 
these Member States will have to in crease the excise duties on cigarettes by the end of the transitional 
periods, it is likely that they will in any case incr ease in parallel the excise duties on fine-cut tobacco. 
Consequently the general impact of this increase in  the minimum rates is expected to be minor.  
Assuming 1kg smoking tobacco corresponding to 1333 factory made cigarettes (minimum €56), the 
impact would be more significant. In addition to the Member Stats quoted abov e, it would also affect 
AU and FI. 
It should be noted that under both hypotheses a 2:3 relationship between EU minimum rates for fine 
cut tobacco and for cigarettes will not necessarily r esult in a 2:3 relationship at national level.  
7.1.2.3 The monetary minimum requirement: the n eed to take accoun t of increases in 
the monetary requirement for cigarettes 
In parallel with the impact assessment on cigarettes, the impact of increases of minimum rates on fine 
cut in line with increases for cigarettes should be assessed as well. Section 6 concludes that from a 
health perspective an increase of the minimum rat es for cigarettes to €90 w ould be necessary in order 
to trigger a probable decrease of demand of on average 10%. Consequently, applying the aforementioned 2:3 relationship, the minimum rates for fine cut would increase to €60. Assuming that 
1kg corresponds to 1333 sticks, a 2:3 rela tionship would entail an increase to €80.  
Graphs c and d in annex 14 show the impact on the excise duties in the Member States on fine cut 
under' both hypotheses (1000 and 1333 sticks) compared to cigarettes (assuming that a minimum of 
€90 and 63% were applied on cigarettes).  
Assuming 1kg smoking tobacco corresponding to 1000 factory made cigarettes (minimum €60), the 
relation of excise duties on 1 kg fine cut would, on average, be around 2:3 of the excise rate on 1000 
cigarettes.  Almost all Member States would be affected except DK, UK, IE and SE . Those Member 
States which are above a 2:3 relationship (SE and IE),  currently already have an excise yield above 
2:3.  
Assuming 1kg smoking tobacco corresponding to 1333 factory made cigarettes (minimum €80), the 
relation of excise duties on 1 kg fine cut would, on average, be around 3:4 of the excise rate on 1000 
cigarettes. . A minimum of €80 would require significant in creases in all Member States, except IE, 
SE, FR and UK.  
Again, under both hypotheses it will not necessarily result in a 2:3 relationship at national level.  
7.1.2.4 The impact of increases of the monetary minimum requirement on the TIRSP of fine-cut  
As consumers' behaviour will depend primarily on the final TIRSP and not on the minimum tax as 
such, it is also important to consider the impact of  the minimum rates on the TIRSP. Graphs e and f in 
annex 14 show the impact on the TIRSP in the Me mber States under both hypotheses compared to the 
excise duties on cigarettes at 1 January 2007 on MPPC. 
Under both hypotheses (minimum €43 and €56) The impact on the TIRSP is similar to the impact on 
the excise duties. Consequently the impact on the TI RSP of an increase in the minimum rate to €43 is 
minor and will not have any noticeable impact on the fine-cut market. The impact would be more significant in case of an increase to €56. 
 
EN 44   EN Again, under both hypotheses a 2:3 relationship between  EU minimum rates for fine cut tobacco and 
for cigarettes will not necessarily result in a 2:3 relationship at  national level.  
Also the impact on TIRSP in the Member States of an EU minimum of €60 and €80 is assessed. 
Graphs g and h in annex 14 show the impact on th e TIRSP in the Member States of an EU minimum 
of €60 and €80 compared to the TIRSP on fine-cut at 1 January 2007 on MPPC basis and for cigarettes assuming that a minimum of €90 and 63% were applied. 
Assuming 1kg smoking tobacco corresponding to 1000 factory made cigarettes (a minimum of €60), 
again, on average the relation between the TIRSP of  1kg fine cut and 1000 cigarettes would be around 
2:3. 
Assuming 1kg smoking tobacco corresponding to 1333 factory made cigarettes (a minimum of €80), 
on average the relation between the TIRSP of 1kg fine cut and 1000 cigarettes would be 4:5.  The 
average TIRSP for fine-cut in the EU would increase from €108 to €149.  
However, even with a minimum of €80, it will not necessarily result in a 2:3 relationship at national 
level.  
7.1.2.5 The impact on demand of increases in the monetary minimum requirement 
Section 6 concludes for cigarettes that, from a hea lth perspective an increase to €90 on all and 63% on 
WAP would trigger a probable decrease of demand of on average 10%  in 21 Member States. In 
addition it would pave the way for further increas es of excise duties on cigarettes, also by those 
Member States which already have a high level of taxation. 
In parallel with the impact assessment on cigarettes, the impact on demand of increases of minimum 
rates on fine cut should be assessed as well. In orde r to trigger a decrease in demand by 10% over the 
coming years the TIRSP should be increased by arou nd 25%, taking into account a price-elasticity of -
0.43 (as for cigarettes). 
Assuming 1kg smoking tobacco corresponding to 1000 factory made cigarettes (a minimum of €60), it 
would increase the TIRSP of fine-cut tobacco in 19 Member States, on average by 50%. This could 
trigger a reduction in demand of around 20%., taki ng into account the same price elasticity as for 
cigarettes.  
Assuming 1kg smoking tobacco corresponding to 1333 factory made cigarettes (a minimum of €80), it 
would increase the TIRSP of fine-cut tobacco in 23 Member States, on average by 75%. This could 
trigger a reduction in demand of around 30%. 
Under both hypotheses it would pave the way for fu rther increases of excise duties on cigarettes, 
including by those Member States which already have a high level of taxation.  
The increase is higher than for cigarettes, but one sh ould take into account that in the period 2002 to 
2006 the quantities of cigarettes released in the EU decreased by approximately 13% while the 
quantities of fine-cut tobacco increased by around 10% in the same period. Consequently a reduction 
in demand of around 20% would bring the evolution of the fine-cut market into line with the cigarette 
market. However under the hypothesis of 1kg smoki ng tobacco corresponding to 1333 factory made 
cigarettes the reduction in demand (30%) might go beyond the health objective set for cigarettes. 
7.1.3 The impact of any change on the proportional minimum requirement 
Currently the proportional minimum requirement is 32% of the TIRSP. A two thirds relationship of 
the minimum proportional requirement would result in a minimum incidence for fine-cut tobacco of 38% as compared to 57% for cigarettes as both minimum requirements refer to TIRSP. An increase of 
 
EN 45   EN the proportional minimum requirement  for cigarettes to 63% would result in an increase to 42% (2:3 
of 63%) for fine cut tobacco. 
Graph i in annex 14 compares the % of excise duties in the TIRSP under a monetary minimum of €32 
(to date), €43, €60 and €80. 
An increase of the proportional minimum requirement for fine-cut tobacco to 38% would have a small 
impact on SI, LU and BG. An increase to 42% would in addition, have a small impact on ES, LV, CY, 
BE and PT. However in combination with an increase of the monetary minimum requirement, the impact would become nil under all hypotheses. Neverthe less, in order to maintain a synergy with the 
minimum requirements for cigarettes, it should be main tained to ensure that the tax incidence on fine 
cut would not decrease below 2:3 of cigarettes. Mo reover it still could have in the future a more 
significant impact depending on the evolution of the market segments.  
7.1.4 The impact of increases in fine-cut pr ices on the industry and otherwise  
Small and medium sized enterprises 
According to industry sources around 10% of fine-cut tobacco is produced by small and medium sized 
enterprises. There is no indication that increas es of excise duty on fine-cut tobacco would 
disproportionately affect small and medium sized  enterprises as compared to other enterprises . 
Employment  
Employment is slightly higher in the manufacture of smoking tobacco as compared to cigarette 
manufacture. However, again, the reduction of employment in the tobacco sector is a direct and 
unavoidable consequence of a policy aime d at controlling tobacco consumption. 
The other impacts 
In most Member States the other impact will be minor taken into account the very small market share 
of fine-cut in the vast majority of Member Stat es. For those Member States where fine-cut has a 
significant market share the impact will be similar to  cigarettes, albeit that the quantitative estimations 
should be reduced in line with the national re lationship between fine-cut and cigarettes. 
7.2 Other smoking tobacco (pipe tobacco) and cigars 
This is a small and declining market and even w ithout any increase in the minimum rates at EU level 
will most probably continue to decline. There are no i ndications that this market gives rise to external 
costs entailed by cross-border shopping and smuggling. Therefore a change in the structure of excise 
duties on other tobacco products is not desirable . However if the monetary minimum rates are not 
adapted for inflation they will become meaningless over time. 
7.3 Conclusion 
Unless Member States under their own volition adjust the taxation of fine-cut and cigarettes, the "no 
policy change option"  will maintain a situation of tax-induced  distortions of competition between the 
two products and further undermine he alth protection objectives. In addition, it will maintain cross-
border shopping, therefore imposing external costs on a number of Member States.  
The best means to align the structure of minimum duties on fine-cut tobacco with the structure of 
cigarettes would be the introduction of a co mpulsory monetary and proportional minimum 
requirement . 
 
EN 46   EN In order to ensure a proper relationship between  minimum rates for cigarettes and fine-cut, the 
minimum rates for fine cut should be set  at 2:3. Consequently, the proportional minimum duty would 
increase to 38%. Depending on the hypothesis (1kg fine-cut equals 1000 or 1333 cigarettes), this 
would result in, respectively, an increase of the monetary minimum to €43 or to €56.  
Increases of the minimum rates for cigarettes shoul d entail parallel increases for fine-cut tobacco. 
Depending on the hypothesis, applying the afor ementioned 2:3 relationship would result in, 
respectively, an increase of the minimum monetary rate to €60 or to €80. The proportional minimum 
duty would under both hypotheses increase to 42%. A minimum of €80 would require significant 
increases in all Member States, except IE, SE, FR and UK.  
Assuming the same price-elasticity as for cigarettes an increase of the minimum requirements to €60 
and 42% would trigger a reduction in demand of around 20% in 19 Member States.  This is higher than 
for cigarettes, but one should take into account that in the period 2002 to 2006 the quantities of 
cigarettes released in the EU decreased by approxima tely 13% while the quantities of fine-cut tobacco 
increased by around 10% in the same period. An increase of the minimum requirements to €80 and 
42% would trigger a reduction in demand of around 30% in 23 Member States, which might go 
beyond the health objec tive set for cigarettes.   
The alignment of the minimum duties at EU level would not necessarily result in  a 2:3 relationship at 
national level. Consequently in or der to avoid tax-induced distortions of competition, Member States 
with excise rates for cigarettes far above the EU mi nima, should ensure a proper level of excise duties 
for fine cut tobacco at national level . 
A change in the structure of excise duties on other tobacco products is not desirable . 
SECTION  8: MONITORING  AND  EVALUATION 
Monitoring of the special arrange ments for tobacco taxation will be carried at least once a year 
through the collection of information from Member States on the occasion of meetings of the Excise committee.  
In addition, Article 4 of both Council Directives 92/79/EEC and 92/80/EEC on the structure and rates 
of excise duty applied to manufactured tobacco sti pulate that the Council, acting on a proposal from 
the Commission, must examine the structure and ra tes of excise duty not less frequently than every 
four years. Consequently monitoring and eval uation of these provisions will take place in the 
framework of this periodical review.  
However in order to carry out an in-depth examina tion of the operation of the single market and of the 
rates and structure of excise duties on the differe nt tobacco products, the Commission services need 
information on the quantities and prices of the to bacco products released for consumption in the 
Member States. Currently the collec tion of this information is a cumb ersome process. In addition, the 
Commission services were not able to collate the data from all Member States. In order to ensure an efficient and effective collection of this informa tion from all Member States it is essential to agree 
upon common provisions on p ooling and sharing of information on tobacco taxation.  
 
EN 47   EN ANNEXES  
Data on the tobacco markets was collected from the Member States. 26 Member States have provided 
data. Only Romania had no data available on the 2005 and 2006 market. Consequently the Romanian 
tobacco market could not be taken into account in this impact assessment. The following tables 1 to 11 
are based on data collected from the Member States.  The questionnaire and the assumptions used are 
added in Annex 
DIRECT EFFECTS ON EXCISE DUTIES OF THE DIFFERENT OPTIONS WITHOUT INCREASES OF 
THE CURRENT MINIMUM RATES (TABLES 1 TO 3) 
Table 1 - The effect of applying th e 57% rule to all cigarettes in 2006. 
(Source: questionnaire to Member States) 
Member 
State  Percentage of Market 
share of cigarettes under 
57% in 2006 % corrected 
assuming that all 
new Member 
States reach €64 Increase of excise duty in 
percentage points needed to 
reach 57% on all cigarettes 
(weighed average) 
AT 62,81% - 0,37 
BE 0,68% - 0,002 
BG 0% 0% 0 
CY 47,30% - 0,5 
CZ 60,69% 15,91% 0,51 
DK 62,27% - 1,97 
EE 69,55% 1,45% 0,04 
FI 0% - 0 
FR 0% - 0 
DE  0% - 0 
EL 0,21% - 0,0003 
HU 53,29% 9,18% 0,21 
IE 2,07% - 0,02 
IT 0% - 0 
LV  85,04% 3,01% 0,09 
LT 80,52% 6,98% 0,15 
LU. 74,63% - 0,81 
MT 0% - 0 
NL. 63,58% - 1,71 
PL 11,84% 0% 0 
PT 9,34% - 0,1 
SK 30,09% 16,82% 0,29 
SI 70,15% 1,32% 0,004 
ES 0% - 0 
SE 70,79% - 5,02 
UK  0% 0% 0 
 
EN 48   EN  
Table 2 - The effect of applying the 57% rule in accordance with  
weighted average prices in 2006. 
(Source: questionnaire to Member States) 
The table below compares the excise duties as a percentage of the TIRSP of the MPPC on 1 July 
2006 with the excise duties as a percentage of the 2006 WAP. The WAP has been calculated as 
the total TIRSP of 2006 divided by total quantities. 
Member 
State % MPPC 
in 2006 % MPPC 
corrected for €64 
(only new 
Member States) % WAP in 
2006 % WAP 
corrected for €64 
(only new 
Member States) Difference 
MPPC and WAP 
(percent 
points) 
AT 58,7% - 56,93% - -1,77 
BE 57,63% - 57,80% - 0,17 
BG 60,34% 68,13% 60,78% 68,52% 0,39 
CY 59,05% - 57,01% - -2,04 
CZ 51,27% 60,87% 51,40% 61,69% 0,82 
DK 54,68% - 56,77% - 2,09 
EE 54,05% 65,16% 52,29% 63,65% -1,51 
FI 57,38% - 57,79% - 0,41 
FR 64% - 64,30% - 0,30 
DE  62,29% - 64,86% - 2,57 
EL 57,5% - 58,88% - 1,38 
HU 58,27% 62,02% 57,64% 61,98% -0,04 
IE 60,33% - 59,73% - -0,60 
IT 58,49% - 58,27% - -0,22 
LV  49,35% 72,14% 42,17% 67,4% -4,74 
LT 40,33% 61,56% 43,02% 63,87% 2,31 
LU. 57,02% - 56,43% - -0,59 
MT 60,82% - 61,24% - 0,42 
NL. 57,09% - 56,39% - -0,70 
PL 56,98% 63,46% 64,02% 69,38% 5,92 
PT 61,04% - 61,24% - 0,20 
SK 54,43% 59,31% 58,88% 63,49% 4,18 
SI 57,55% 60,45% 56,27% 59,19% -1,26 
ES 64,29% - 64,51% - 0,22 
SE 49,2% - 52,80% - 3,60 
UK  62,89% -  67,24% - 4,54 
 
EN 49   EN  
Table 3 - The effect of applying th e minimum of €64 per 1000 cigarettes rule 
in accordance with weighted average prices 
(Source: questionnaire to Member States) 
Member 
State The excise 
yield in Euro on MPPC in 
2006 The excise 
yield in Euro on MPPC 
corrected 
assuming 
that Member 
States have reached 64€ 
on MPPC The excise 
yield in Euro on 
WAP in 
2006 The excise 
yield in Euro on WAP 
corrected 
assuming 
that Member 
States have reached 64€ 
on MPPC Difference 
MPPC- WAP in € 
Bulgaria 37,5 64 36,47 62,62 1,38 
CZ Republic 38,11 64 38,11 63,27 0,73 
Estonia 33,87 64 34,96 65,45 -1,45 
Greece 80,5 64 69,11 NA 11,39 
Hungary 51,15 64 51,64 64,05 -0,05 
Latvia 15,6 64 16,82 65,99 -1,99 
Lithuania 21,9 64 21,12 62,67 1,33 
Poland 42,54 64 37,52 57,96 6,04 
Romania  -no data  64 -no data -no data no-data 
Slovakia 49,03 64 46,46 61,05 2,95 
Slovenia 54,07 64 57,86 68,21 -4,21 
Spain 72,33 64 72,76 NA -0,43 
 
EN 50   EN IMPACT OF THE DIFFERENT OPTIONS IN CASE OF INCREASES OF THE MINIMUM RATES  - (TABLES 4 TO 7) 
Table 4.a - Evolution of the WAP if an increased 57 % rule were applied to all cigarettes (Option B) 
WAP 57% WAP 59% WAP 61% WAP 63% WAP 65% MS Current 
WAP(corrected for new MS) without 
capping capping 
€101  capping 
€122  without 
capping capping 
€101 capping 
€122  without 
capping capping 
€101  capping 
€122  without 
capping capping 
€101  capping 
€122  without 
capping capping 
€101  capping 
€122  
AT 174,76  177,39  174,89  177,37  189,86  176,84  189,20  206,63  177,64  197,80  226,96  178,03  200,75  251,72  178,07  201,59  
BE 188,59  188,60  188,59  188,59  199,96  188,74  196,87  216,45  189,23  199,43  238,49  189,51  202,71  265,53  189,51  204,37  
BG 91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  
CY 167,35  170,89  167,63  170,78  179,33  168,81  177,22  193,05  172,67  185,64  209,17  175,34  191,33  228,22  175,34  196,73  
CZ 102,55  105,14  105,09  105,13  107,37  107,03  107,35  110,94  109,34  110,83  116,83  112,76  116,07  124,75  117,35  121,34  
DK 197,64  216,13  197,64  203,05  230,51  197,64  203,73  248,08  197,64  203,88  273,00  197,64  206,74  307,66  197,64  208,45  
EE 102,83  103,02  103,02  103,02  104,41  104,38  104,41  107,10  106,92  107,10  111,70  111,25  111,60  117,77  114,50  117,42  
FI 194,11  194,11  194,11  194,11  204,30  194,11  202,46  223,79  194,11  206,09  247,38  194,11  206,09  276,54  194,11  206,09  
FR 238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  246,93  238,01  238,01  
DE  214,18  214,18  214,18  214,18  214,18  214,18  214,18  214,18  214,18  214,18  216,54  214,18  214,18  230,47  214,18  214,18  
EL 117,37  117,38  117,37  117,37  122,07  122,04  122,06  131,15  129,99  131,14  142,38  134,82  142,21  156,19  139,32  151,41  
HU 103,34  104,39  104,37  104,38  105,90  105,85  105,89  110,28  109,85  110,25  117,62  115,83  117,44  127,23  123,12  125,85  
IE 322,11  322,34  322,11  322,11  324,02  322,11  322,11  343,14  322,11  322,11  375,73  322,11  322,11  418,33  322,11  322,11  
IT 165,10  165,10  165,10  165,10  170,08  169,45  169,99  185,31  171,78  184,15  203,55  171,78  196,06  225,75  171,78  196,06  
LV  97,91  98,35  98,35  98,35  98,98  98,97  98,98  100,36  100,06  100,36  102,64  101,86  102,49  106,34  104,48  105,70  
LT 98,12  98,84  98,84  98,84  100,45  100,37  100,45  102,94  102,69  102,94  107,43  106,71  107,26  113,71  111,37  113,28  
LU. 155,47  160,07  157,99  160,03  170,51  163,85  170,35  183,22  167,77  179,50  198,22  169,52  188,28  216,17  170,05  191,87  
MT 175,05  175,05  175,05  175,05  175,05  175,05  175,05  176,83  175,05  176,83  190,07  175,10  185,14  208,78  175,10  191,64  
NL. 188,46  201,25  188,46  197,60  213,89  188,46  200,22  229,34  188,46  201,61  249,26  188,46  203,50  274,19  188,46  205,15  
PL 83,56  83,56  83,56  83,56  83,56  83,56  83,56  83,66  83,66  83,66  84,62  84,62  84,62  86,29  86,28  86,29  
PT 138,84  139,47  139,39  139,47  141,24  140,67  141,22  147,08  144,69  146,90  159,71  151,83  158,10  175,57  154,60  169,40  
SK 96,16  97,50  97,50  97,50  99,35  99,35  99,35  102,27  102,27  102,27  106,23  105,28  106,23  112,33  108,40  112,15  
SI 115,25  115,27  115,26  115,27  117,43  117,42  117,42  124,87  124,84  124,86  136,86  135,78  136,84  151,80  145,77  151,63  
ES 112,79  112,79  112,79  112,79  112,79  112,79  112,79  112,79  112,79  112,79  112,96  112,87  112,96  117,73  117,39  117,63  
SE 201,29  248,45  201,29  214,56  267,61  201,29  215,26  293,00  201,29  217,52  325,81  201,29  219,11  367,83  201,29  219,53  
UK  341,62  341,62  341,62  341,62  341,62  341,62  341,62  341,91  341,62  341,62  345,21  341,62  341,62  355,25  341,62  341,62  
Avera ge 160,92 164,63 161,29 162,66 169,38 162,46 165,43 177,61 164,23 168,96 189,53 166,22 173,19 205,94 168,12 176,96 
STDEVP 66,02 68,21 65,79 66,45 70,02 65,32 66,50 74,07 64, 42 65,93 80,63 63,23 64,80 90,26 61,88 63,03 
 
EN 51   EN Table 4.b - Evolution in % of the WAP if an increase d 57% rule were applied to all cigarettes (Option B) 
WAP 57% WAP 59% WAP 61% WAP 63% WAP 65% MS Current 
WAP 
(corrected 
for new 
MS  without 
capping capping 
€101  capping 
€122  without 
capping capping 
€101 capping 
€122  without 
capping capping 
€101  capping 
€122  without 
capping capping 
€101  capping 
€122  without 
capping capping 
€101  capping 
€122  
AT 174,76  1,50%  0,08%  1,49%  8,64%  1,19%  8,27%  18,24%  1,65%  13,18%  29,87%  1,87%  14,87%  44,04%  1,89%  15,36%  
BE 188,59  0,01%  0,00%  0,00%  6,03%  0,08%  4,39%  14,78%  0,34%  5,75%  26,46%  0,49%  7,49%  40,80%  0,49%  8,37%  
BG 91,38  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  
CY 167,35  2,12%  0,17%  2,05%  7,16%  0,88%  5,90%  15,36%  3,18%  10,93%  24,99%  4,78%  14,33%  36,38%  4,78%  17,56%  
CZ 102,55  2,52%  2,48%  2,51%  4,70%  4,36%  4,67%  8,18%  6,62%  8,07%  13,93%  9,95%  13,18%  21,65%  14,43%  18,32%  
DK 197,64  9,36%  0,00%  2,74%  16,63%  0,00%  3,08%  25,52%  0,00%  3,16%  38,13%  0,00%  4,61%  55,67%  0,00%  5,47%  
EE 102,83  0,18%  0,18%  0,18%  1,54%  1,50%  1,54%  4,15%  3,98%  4,15%  8,62%  8,19%  8,53%  14,53%  11,35%  14,19%  
FI 194,11  0,00%  0,00%  0,00%  5,25%  0,00%  4,30%  15,29%  0,00%  6,17%  27,44%  0,00%  6,17%  42,46%  0,00%  6,17%  
FR 238,01  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  3,75%  0,00%  0,00%  
DE  214,18  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  1,10%  0,00%  0,00%  7,60%  0,00%  0,00%  
EL 117,37  0,00%  0,00%  0,00%  4,00%  3,98%  4,00%  11,73%  10,75%  11,73%  21,31%  14,86%  21,16%  33,07%  18,70%  29,00%  
HU 103,34  1,02%  1,00%  1,01%  2,48%  2,43%  2,47%  6,72%  6,30%  6,70%  13,83%  12,09%  13,65%  23,13%  19,15%  21,79%  
IE 322,11  0,07%  0,00%  0,00%  0,59%  0,00%  0,00%  6,53%  0,00%  0,00%  16,65%  0,00%  0,00%  29,87%  0,00%  0,00%  
IT 165,10  0,00%  0,00%  0,00%  3,02%  2,64%  2,96%  12,25%  4,05%  11,54%  23,29%  4,05%  18,76%  36,74%  4,05%  18,76%  
LV  97,91  0,45%  0,45%  0,45%  1,09%  1,08%  1,09%  2,50%  2,20%  2,50%  4,83%  4,03%  4,68%  8,60%  6,71%  7,95%  
LT 98,12  0,73%  0,73%  0,73%  2,37%  2,29%  2,37%  4,91%  4,66%  4,91%  9,49%  8,75%  9,31%  15,88%  13,50%  15,45%  
LU. 155,47  2,96%  1,62%  2,94%  9,67%  5,39%  9,57%  17,85%  7,91%  15,46%  27,50%  9,04%  21,11%  39,04%  9,38%  23,42%  
MT 175,05  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  1,01%  0,00%  1,01%  8,58%  0,03%  5,77%  19,27%  0,03%  9,48%  
NL. 188,46  6,78%  0,00%  4,85%  13,49%  0,00%  6,24%  21,69%  0,00%  6,98%  32,26%  0,00%  7,98%  45,49%  0,00%  8,85%  
PL 83,56  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,12%  0,12%  0,12%  1,28%  1,28%  1,28%  3,27%  3,27%  3,27%  
PT 138,84  0,45%  0,40%  0,45%  1,72%  1,32%  1,71%  5,93%  4,21%  5,80%  15,03%  9,35%  13,87%  26,45%  11,35%  22,01%  
SK 96,16  1,39%  1,39%  1,39%  3,32%  3,31%  3,31%  6,35%  6,35%  6,35%  10,48%  9,48%  10,48%  16,81%  12,73%  16,63%  
SI 115,25  0,02%  0,01%  0,02%  1,89%  1,88%  1,88%  8,35%  8,32%  8,34%  18,76%  17,82%  18,74%  31,71%  26,48%  31,57%  
ES 112,79  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,14%  0,07%  0,14%  4,38%  4,07%  4,29%  
SE 201,29  23,43%  0,00%  6,59%  32,95%  0,00%  6,94%  45,56%  0,00%  8,06%  61,86%  0,00%  8,85%  82,74%  0,00%  9,06%  
UK  341,62  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,08%  0,00%  0,00%  1,05%  0,00%  0,00%  3,99%  0,00%  0,00%  
Average 160,92 2,04% 0,33% 1,05% 4,87% 1,24% 2,87% 9,74% 2,72% 5,42% 16,80% 4,47% 8,65% 26,44% 6,24% 11,81% 
 
EN 52   EN Table 4.c  - The market share affected by increasing the 57% rule applied to all cigarettes. 
(2006 data, corrected assuming that all new Member States comply with the €64 rule)  
MS Market share 
under 59% Market share 
under 61% Market share 
under 63% Market share 
under 65% 
AT 94,74% 99,95% 100% 100% 
BE 82,46% 100% 100% 100% 
BG 0% 0% 0% 0% 
CY 64,77% 100% 100% 100% 
CZ 25,03% 43,87% 49,04% 61,56% 
DK 62,59% 68,43% 90,60% 92,49% 
EE 23,92% 24,17% 42,59% 43,95% 
FI 100%% 100% 100% 100% 
FR 0% 0% 0% 100% 
DE  0% 0% 13,55% 65,48% 
EL 66,79% 81,69% 85,96% 85,96% 
HU 20,28% 53,29% 62,30% 66,81% 
IE 17,55% 87,05% 100% 100% 
IT 100% 100% 100% 100% 
LV  7,01% 14,35% 20,86% 34,93% 
LT 22,87% 22,99% 45,41% 54,10% 
LU. 94,40% 96,88% 99,04% 99,05% 
MT 0% 47,40% 96,52% 96,52% 
NL. 74,55% 80,41% 89,74% 95,23% 
PL 0,10% 2,18% 11,53% 12,45% 
PT 16,02% 46,46% 81,56% 87,37% 
SK 18,24% 29,86% 32,64% 47,39% 
SI 40,01% 90,80% 99,97% 100% 
ES 0% 0% 18,75% 76,26% 
SE 74,79% 88,50% 92,23% 93,19% 
UK  0% 1,67 20,53% 34,26% 
 
EN 53   EN Table 5.a - Evolution of the WAP if an increased €64 rule were applied to all cigarettes (Option C) 
MS Current WAP 
(corrected for 
new MS) €70 €75  €80  €90  €100  
AT 174,76  174,76  174,76  174,76  174,94  177,36  
BE 188,59  188,59  188,59  188,59  188,59  189,23  
BG 91,38  100,24  106,24  112,24  124,24  136,24  
CY 167,35  167,35  167,35  167,35  169,37  174,54  
CZ 102,55  111,05  116,54  122,47  134,37  146,27  
DK 197,64  197,64  197,64  197,64  197,64  197,64  
EE 102,83  108,99  114,16  120,00  131,80  143,60  
FI 194,11  194,11  194,11  194,11  194,11  194,11  
FR 238,01  238,01  238,01  238,01  238,01  238,01  
DE  214,18  214,18  214,18  214,18  214,18  214,18  
EL 117,37  125,46  128,54  131,77  142,27  154,15  
HU 103,34  110,74  116,48  122,48  134,48  146,48  
IE 322,11  322,11  322,11  322,11  322,11  322,11  
IT 165,10  165,10  165,10  165,10  165,10  170,65  
LV  97,91  102,93  108,55  114,44  126,24  138,04  
LT 98,12  106,80  112,67  118,57  130,37  142,17  
LU 155,47  155,47  155,47  156,15  160,95  169,66  
MT 175,05  175,05  175,05  175,05  175,05  175,05  
NL. 188,46  188,46  188,46  188,46  188,46  188,46  
PL 83,56  98,24  104,33  110,43  122,63  134,83  
PT 138,84  138,84  138,84  138,84  144,87  156,95  
SK 96,16  106,81  112,76  118,71  130,62  142,52  
SI 115,25  118,99  123,59  129,41  141,40  153,40  
ES 112,79  115,30  118,58  122,94  133,02  144,47  
SE 201,29  201,29  201,29  201,29  201,29  201,29  
UK  341,62  341,62  341,62  341,62  341,62  341,62  
Average 160,92  164,16 166,35 168,72 174,14 180,50 
STDEVP 66,02 63,05 61,13 59,15 55,07 50,96 
 
EN 54   EN Table: 5.b Evolution in % of the WAP if an increased  €64 rule were applied to all cigarettes (Option C) 
Member 
State Current WAP (corrected for new 
MS) €70 €75  €80  €90  €100  
AT 174,76  0,00%  0,00%  0,00%  0,10%  1,49%  
BE 188,59  0,00%  0,00%  0,00%  0,00%  0,34%  
BG 91,38  9,69%  16,26%  22,83%  35,96%  49,09%  
CY 167,35  0,00%  0,00%  0,00%  1,21%  4,30%  
CZ 102,55  8,29%  13,64%  19,42%  31,02%  42,63%  
DK 197,64  0,00%  0,00%  0,00%  0,00%  0,00%  
EE 102,83  5,99%  11,01%  16,70%  28,17%  39,65%  
FI 194,11  0,00%  0,00%  0,00%  0,00%  0,00%  
FR 238,01  0,00%  0,00%  0,00%  0,00%  0,00%  
DE 214,18  0,00%  0,00%  0,00%  0,00%  0,00%  
EL 117,37  6,89%  9,52%  12,26%  21,21%  31,33%  
HU 103,34  7,16%  12,72%  18,53%  30,14%  41,75%  
IE 322,11  0,00%  0,00%  0,00%  0,00%  0,00%  
IT 165,10  0,00%  0,00%  0,00%  0,00%  3,37%  
LV  97,91  5,12%  10,87%  16,89%  28,94%  40,99%  
LT 98,12  8,85%  14,83%  20,84%  32,86%  44,89%  
LU 155,47  0,00%  0,00%  0,44%  3,52%  9,13%  
MT 175,05  0,00%  0,00%  0,00%  0,00%  0,00%  
NL. 188,46  0,00%  0,00%  0,00%  0,00%  0,00%  
PL 83,56  17,57%  24,87%  32,17%  46,77%  61,37%  
PT 138,84  0,00%  0,00%  0,00%  4,34%  13,04%  
SK 96,16  11,08%  17,27%  23,45%  35,83%  48,21%  
SI 115,25  3,25%  7,24%  12,28%  22,69%  33,10%  
ES 112,79  2,22%  5,13%  8,99%  17,93%  28,08%  
SE 201,29  0,00%  0,00%  0,00%  0,00%  0,00%  
UK  341,62  0,00%  0,00%  0,00%  0,00%  0,00%  
Average 160,92 3,31%  5,51%  7,88%  13,10%  18,95%  
 
EN 55   EN Table 5.c - The market share a ffected by increasing the minimum of €64 per 1000 on all cigarettes 
MS Market share 
under €70 Market share  
under €75 Market share 
under €80 Market share 
under €90 Market share 
under €100 
AT 0 0 0 5,26% 59,27% 
BE 0 0 0 0 22,78% 
BG 100% 100% 100% 100% 100% 
CY 0 0 0 35,30% 56,83 
CZ 85,80% 98,35% 99,94% 99,99% 100% 
DK 0 0 0 0 0 
EE 76,08% 98,55% 99,94% 100% 100% 
FI 0 0 0 0 0 
FR 0 0 0 0 0 
DE  0 0 0 0 0 
EL 51,64% 51,92% 55,85% 99,06% 99,99% 
HU 91,54% 99,29% 99,99% 99,99% 99,99% 
IE 0 0 0 0 0 
IT 0 0 0 0 94,11% 
LV  85,75% 98,03% 100% 100% 100% 
LT 98,93% 100% 100% 100% 100% 
LU 0 0 17,31% 65,65% 98,73% 
MT 0 0 0 0 0 
NL. 0 0 0 0 0 
PL 99,90% 100% 100% 100% 100% 
PT 0 0 0 98,79% 100% 
SK 100% 100% 100% 100% 100% 
SI 68,88% 86,70% 99,82% 99,98% 99,98% 
ES 25,53% 63,92% 81,02% 98,06% 99,25% 
SE 0 0 0 0 0 
UK  0 0 0 0 0 
 
EN 56   EN Table 6.a – Evolution of the WAP if an increased 57% rule were applied on WAP (Option D) 
  57% 59% 61% 63% 65% 
MS Current 
WAP corrected 
for newwithout capping capping 
€101  capping 
€122  without 
capping capping 
€101 capping 
€122  without 
capping capping 
€101  capping 
€122  without 
capping capping 
€101  capping 
€122  without 
capping capping 
€101  capping 
€122  
AT 174,76  175,24  175,24  175,24  189,64  176,58  189,64  206,63  176,58  201,78  226,96  176,58  201,78  251,72  176,58  201,78  
BE 188,59  188,59  188,59  188,59  198,14  188,59  198,14  216,45  188,59  204,31  238,49  188,59  204,31  265,53  188,59  204,31  
BG 91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  91,38  
CY 167,35  167,35  167,35  167,35  179,24  173,78  179,24  193,05  173,78  193,05  209,17  173,78  197,93  228,22  173,78  197,93  
CZ 102,55  102,55  102,55  102,55  102,55  102,55  102,55  102,55  102,55  102,55  108,93  108,93  108,93  120,38  120,38  120,38  
DK 197,64  199,60  197,64  199,60  218,61  197,64  209,88  241,62  197,64  209,88  270,05  197,64  209,88  306,05  197,64  209,88  
EE 102,83  102,83  102,83  102,83  102,83  102,83  102,83  102,83  102,83  102,83  102,83  102,83  102,83  109,89  109,89  109,89  
FI 194,11  194,11  194,11  194,11  204,30  194,11  204,30  223,79  194,11  206,09  247,38  194,11  206,09  276,54  194,11  206,09  
FR 238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  238,01  246,93  238,01  238,01  
DE  214,18  214,18  214,18  214,18  214,18  214,18  214,18  214,18  214,18  214,18  214,18  214,18  214,18  215,64  214,18  214,18  
EL 117,37  117,37  117,37  117,37  117,95  117,95  117,95  128,19  128,19  128,19  140,38  140,38  140,38  155,14  155,14  155,14  
HU 103,34  103,34  103,34  103,34  103,34  103,34  103,34  103,34  103,34  103,34  108,51  108,51  108,51  120,35  120,35  120,35  
IE 322,11  322,11  322,11  322,11  322,11  322,11  322,11  341,01  322,11  322,11  375,73  322,11  322,11  418,33  322,11  322,11  
IT 165,10  165,10  165,10  165,10  170,08  170,08  170,08  185,31  170,86  185,31  203,55  170,86  196,06  225,75  170,86  196,06  
LV  97,91  97,91  97,91  97,91  97,91  97,91  97,91  97,91  97,91  97,91  97,91  97,91  97,91  97,91  97,91  97,91  
LT 98,12  98,12  98,12  98,12  98,12  98,12  98,12  98,12  98,12  98,12  98,12  98,12  98,12  103,74  103,74  103,74  
LU 155,47  158,43  158,43  158,43  169,76  169,76  169,76  182,84  170,73  182,84  198,10  170,73  194,88  216,14  170,73  194,88  
MT 175,05  175,05  175,05  175,05  175,05  175,05  175,05  175,05  175,05  175,05  189,19  175,05  189,19  208,35  175,05  192,51  
NL 188,46 192,74 188,46 192,74 208,14 188,46 207,19 226,22 188,46 207,19 247,73 188,46 207,19 273,77 188,46 207,19 
PL 83,56  83,56  83,56  83,56  83,56  83,56  83,56  83,56  83,56  83,56  83,56  83,56  83,56  83,56  83,56  83,56  
PT 138,84  138,84  138,84  138,84  138,84  138,84  138,84  138,84  138,84  138,84  151,26  151,26  151,26  168,41  158,16  168,41  
SK 96,16  96,16  96,16  96,16  96,16  96,16  96,16  96,16  96,16  96,16  96,16  96,16  96,16  103,82  103,82  103,82  
SI 115,25  115,25  115,25  115,25  115,25  115,25  115,25  124,61  124,61  124,61  136,86  136,86  136,86  151,80  151,80  151,80  
ES 112,79  112,79  112,79  112,79  112,79  112,79  112,79  112,79  112,79  112,79  112,79  112,79  112,79  115,41  115,41  115,41  
SE 201,29  238,02  201,29  220,93  260,68  201,29  220,93  288,12  201,29  220,93  322,02  201,29  220,93  364,96  201,29  220,93  
UK  341,62  341,62  341,62  341,62  341,62  341,62  341,62  341,62  341,62  341,62  341,62  341,62  341,62  341,62  341,62  341,62  
Av 160,92 162,70  161,05  162,04  167,32  162,00  165,42  175,16  162,82  168,56  186,57  164,68  172,03  202,36  167,87  175,74  
STDEVP 66,02 67,35 66,01 66,69 69,73 66, 08 67,82 74,73 65,62 67,98 82,09 64,63 67,27 91,17 62,63 64,94 
 
 
EN 57   EN Table 6.b - Evolution in % of the WAP if an in creased 57% rule were applied on WAP (Option D) 
  57% 59% 61% 63% 65% 
MS Current 
WAP 
(corrected 
fwithout 
capping capping 
€101  capping 
€122  without 
capping capping 
€101 capping 
€122  without 
capping capping 
€101  capping 
€122  without 
capping capping 
€101  capping 
€122  without 
capping capping 
€101  capping 
€122  
AT 174,76  0,27%  0,27%  0,27%  8,52%  1,04%  8,52%  18,24%  1,04%  15,46%  29,87%  1,04%  15,46%  44,04%  1,04%  15,46%  
BE 188,59  0,00%  0,00%  0,00%  5,07%  0,00%  5,07%  14,78%  0,00%  8,34%  26,46%  0,00%  8,34%  40,80%  0,00%  8,34%  
BG 91,38  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  
CY 167,35  0,00%  0,00%  0,00%  7,11%  3,84%  7,11%  15,36%  3,84%  15,36%  24,99%  3,84%  18,27%  36,38%  3,84%  18,27%  
CZ 102,55  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  6,22%  6,22%  6,22%  17,38%  17,38%  17,38%  
DK 197,64  0,99%  0,00%  0,99%  10,61%  0,00%  6,20%  22,25%  0,00%  6,20%  36,64%  0,00%  6,20%  54,85%  0,00%  6,20%  
EE 102,83  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  6,86%  6,86%  6,86%  
FI 194,11  0,00%  0,00%  0,00%  5,25%  0,00%  5,25%  15,29%  0,00%  6,17%  27,44%  0,00%  6,17%  42,46%  0,00%  6,17%  
FR 238,01  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  3,75%  0,00%  0,00%  
DE  214,18  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,68%  0,00%  0,00%  
EL 117,37  0,00%  0,00%  0,00%  0,49%  0,49%  0,49%  9,22%  9,22%  9,22%  19,61%  19,61%  19,61%  32,18%  32,18%  32,18%  
HU 103,34  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  5,01%  5,01%  5,01%  16,47%  16,47%  16,47%  
IE 322,11 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 5,87% 0,00% 0,00% 16,65% 0,00% 0,00% 29,87% 0,00% 0,00% 
IT 165,10  0,00%  0,00%  0,00%  3,02%  3,02%  3,02%  12,25%  3,49%  12,25%  23,29%  3,49%  18,76%  36,74%  3,49%  18,76%  
LV  97,91  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  
LT 98,12  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  5,73%  5,73%  5,73%  
LU 155,47  1,90%  1,90%  1,90%  9,19%  9,19%  9,19%  17,60%  9,82%  17,60%  27,42%  9,82%  25,35%  39,03%  9,82%  25,35%  
MT 175,05  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  8,08%  0,00%  8,08%  19,02%  0,00%  9,97%  
NL. 188,46  2,27%  0,00%  2,27%  10,44%  0,00%  9,93%  20,03%  0,00%  9,93%  31,45%  0,00%  9,93%  45,26%  0,00%  9,93%  
PL 83,56  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  
PT 138,84  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  8,94%  8,94%  8,94%  21,29%  13,91%  21,29%  
SK 96,16  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  7,96%  7,96%  7,96%  
SI 115,25  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  8,12%  8,12%  8,12%  18,76%  18,76%  18,76%  31,71%  31,71%  31,71%  
ES 112,79  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  2,32%  2,32%  2,32%  
SE 201,29  18,25%  0,00%  9,76%  29,51%  0,00%  9,76%  43,14%  0,00%  9,76%  59,98%  0,00%  9,76%  81,31%  0,00%  9,76%  
UK  341,62  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  0,00%  
Av 160,92 0,91% 0,08% 0,58% 3,43% 0,68% 2,48% 7,77% 1,37% 4,55% 14,26% 2,95% 7,11% 23,70% 5,87% 10,39% 
 
EN 58   EN Table 7.a - Evolution of the WAP if an increased €64 rule were applied on WAP  
(Option E) 
Member 
State Current WAP (corrected for 
new MS) €70 €75  €80  €90  100  
            
AT 174,76  174,76  174,76  174,76  174,76  175,37  
BE 188,59  188,59  188,59  188,59  188,59  188,59  
BG 91,38  100,24  106,24  112,24  124,24  136,24  
CY 167,35  167,35  167,35  167,35  167,35  172,63  
CZ 102,55  110,57  116,52  122,47  134,37  146,27  
DK 197,64  197,64  197,64  197,64  197,64  197,64  
EE 102,83  108,20  114,10  120,00  131,80  143,60  
FI 194,11  194,11  194,11  194,11  194,11  194,11  
FR 238,01  238,01  238,01  238,01  238,01  238,01  
DE  214,18  214,18  214,18  214,18  214,18  214,18  
EL 117,37  118,44  124,39  130,34  142,24  154,14  
HU 103,34  110,48  116,48  122,48  134,48  146,48  
IE 322,11  322,11  322,11  322,11  322,11  322,11  
IT 165,10  165,10  165,10  165,10  165,10  169,66  
LV  97,91  102,64  108,54  114,44  126,24  138,04  
LT 98,12  106,77  112,67  118,57  130,37  142,17  
LU 155,47  155,47  155,47  155,47  158,08  169,58  
MT 175,05  175,05  175,05  175,05  175,05  175,05  
NL. 188,46  188,46  188,46  188,46  188,46  188,46  
PL 83,56  98,23  104,33  110,43  122,63  134,83  
PT 138,84  138,84  138,84  138,84  144,85  156,95  
SK 96,16  106,81  112,76  118,71  130,62  142,52  
SI 115,25  117,39  123,39  129,39  141,39  153,40  
ES 112,79  112,79  115,39  121,19  132,79  144,39  
SE 201,29  201,29  201,29  201,29  201,29  201,29  
UK  341,62  341,62  341,62  341,62  341,62  341,62  
Average 160,92 163,66 166,05 168,57 173,94 180,28 
STDEVP 66,02 63,41 61,34 59,24 55,11 50,99 
 
EN 59   EN  
Table 7.b - Evolution in % of the WAP if an increased €64 rule were applied on WAP 
(Option E) 
Member 
State Current WAP (corrected for 
new MS) €70 €75  €80  €90  €100  
            
AT 174,76 0,00% 0,00% 0,00% 0,00% 0,35% 
BE 188,59 0,00% 0,00% 0,00% 0,00% 0,00% 
BG 91,38 9,69% 16,26% 22,83% 26,45% 49,09% 
CY 167,35 0,00% 0,00% 0,00% 0,00% 3,16% 
CZ 102,55 7,81% 13,61% 19,42% 23,68% 42,62% 
DK 197,64 0,00% 0,00% 0,00% 0,00% 0,00% 
EE 102,83 5,22% 10,96% 16,70% 21,98% 39,65% 
FI 194,11 0,00% 0,00% 0,00% 0,00% 0,00% 
FR 238,01 0,00% 0,00% 0,00% 0,00% 0,00% 
DE  214,18 0,00% 0,00% 0,00% 0,00% 0,00% 
EL 117,37 0,91% 5,98% 11,05% 17,48% 31,32% 
HU 103,34 6,91% 12,72% 18,52% 23,16% 41,75% 
IE 322,11 0,00% 0,00% 0,00% 0,00% 0,00% 
IT 165,10 0,00% 0,00% 0,00% 0,00% 2,77% 
LV  97,91 4,84% 10,86% 16,89% 22,44% 40,99% 
LT 98,12 8,81% 14,83% 20,84% 24,74% 44,89% 
LU 155,47 0,00% 0,00% 0,00% 1,65% 9,08% 
MT 175,05 0,00% 0,00% 0,00% 0,00% 0,00% 
NL. 188,46 0,00% 0,00% 0,00% 0,00% 0,00% 
PL 83,56 17,57% 24,87% 32,17% 31,87% 61,37% 
PT 138,84 0,00% 0,00% 0,00% 4,15% 13,04% 
SK 96,16 11,08% 17,27% 23,45% 26,38% 48,21% 
SI 115,25 1,86% 7,07% 12,27% 18,49% 33,10% 
ES 112,79 0,00% 2,30% 7,44% 15,06% 28,01% 
SE 201,29 0,00% 0,00% 0,00% 0,00% 0,00% 
UK  341,62 0,00% 0,00% 0,00% 0,00% 0,00% 
Average 160,92 2,87% 5,26% 7,75% 9,90% 18,82% 
 
EN 60   EN THE BUDGETARY IMPACT  
Table 8.a - The impact on budget of excise  duty changes per year Options B and C 
Option B (capping €122 ) Option C (correct for new Member States )
MS 57% 59% 61% 63% 65% €64 €70 €75 €80 €90 €100
AT 21102,01 112081,05 173115,89 193156,32 198758,84 0 0 0 0 1494,67 21023,22 
BE 0 63854,81 82831,46 106737,93 118561,21 0 0 0 0 0 5120,74 
BG 0 0 0 0 0 14706,57 66226,7 105900,35 141384,89 199786,65 241431,98 
CY 4003,46 11227,25 20162,77 25857,65 31006,82 0 0 0 0 2374,25 8269,53 
CZ 41195,58 75613,75 127747,31 201514,51 270181,6 45208,69 130917,14 207820,34 284166,72 416240,18 520133,09 
DK 24276,11 27278,63 27946,97 40404,98 47713,58 0 0 0 0 0 0 
EE 242,97 2047,02 5432,81 10840,33 17349,33 2085,24 7743,03 13766,43 20063,23 31090,05 39869,87 
FI 0 23142,14 32795,42 32795,42 32795,42 0 0 0 0 0 0 
FR 0 0 0 0 0 0 0 0 0 0 0 
DE  0 0 0 0 0 0 0 0 0 0 0 
EL 22,89 89666,07 250294,67 423461,76 548043,34 88888,96 151788,29 206116,08 260813,34 424289,27 581797,97 
HU 9262,69 22501,34 59384,26 115522,76 173964,78 19830,82 63332,07 108350,68 151472,46 225915,62 284572,05 
IE 0 0 0 0 0 0 0 0 0 0 0 
IT 0 262615,05 967944,03 1497733,3 1497733,4 0 0 0 0 0 297462,1 
LV  1170,62 2813,72 6391,28 11767,15 19575,82 1010,04 12852,78 26211,01 38997,1 60912,88 77901,74 
LT 2128,93 6851,77 13935 25683,85 40855,03 7293,59 24477,63 39375,93 53006,74 76222,2 94042,77 
LU 13340,09 41746,01 64897,61 85325,36 93174,16 0 0 0 2035,7 15959,24 39917,89 
MT 0 0 596,49 3288,96 5276,44 0 0 0 0 0 0 
NL. 73992,01 94428,93 105124,42 119468,34 131833,46 0 0 0 0 0 0 
PL 0 24,05 4244,38 43953,06 111205,63 301996,92 538035,05 718921,08 874792,11 1111412 1247869,1 
PT 6649,28 25096,17 82859,7 187643,5 280911,4 0 0 0 0 62543,87 177445,94 
SK 3598,54 8473,53 15914,83 25530,43 38829,05 11254,61 26890,5 40132,36 52100,53 72215,84 87236,44 
SI 54,68 6148,19 26107 54660,34 83818,84 1145,77 10496,36 22814,38 37459,35 64366,72 86856,62 
ES 0 0 0 8709,25 252627,61 49013,47 132512,96 300461,71 513685,12 962632,56 1398062,9 
SE 56030,46 58856,81 67916,33 74181,36 75852,24 0 0 0 0 0 0 
UK  0 0 0 0 0 0 0 0 0 0 0 
Total  257070,33 934466,27 2135642,6 3288236,6 4070068 542434,67 1165272,5 1789870,4 2429977,3 3727456 5209014 
 
EN 61   EN  
Table 8.b - The impact on budget of excise duty changes per year Options D and E 
Option D (capping €122)  Option E (correct for new Member States)  
MS WAP 
57% WAP 
59% WAP 
61% WAP 
63% WAP 
65% €64 €70 €75 €80 €90 €100 
AT 3901,89 115298,44 199964,59 199964,59 199964,59 0 0 0 0 0 5023,13 
BE 0 73293,5 118133,27 118133,27 118133,27 0 0 0 0 0 0 
BG 0 0 0 0 0 13088,71 66226,7 105900,35 141384,89 254392,95 241431,98 
CY 0 13433,59 27525,88 32113,96 32113,96 0 0 0 0 0 6110,27 
CZ 0 0 0 99572,91 258035,77 14087,42 123812,53 207493,76 284123,75 496561,69 520131,3 
DK 8898,01 53785,45 53785,45 53785,45 53785,45 0 0 0 0 0 0 
EE 0 0 0 0 8820,63 0 6787,48 13705,99 20062,59 36548,31 39869,87 
FI 0 28076,39 32795,42 32795,42 32795,42 0 0 0 0 0 0 
FR 0 0 0 0 0 0 0 0 0 0 0 
DE  0 0 0 0 0 0 0 0 0 0 0 
EL 0 11265,11 200036,02 396603,81 593633,13 0 20739,61 132425,82 236834,85 471666,04 581699,32 
HU 0 0 0 44928,54 136620,42 0 61204,35 108300,64 151449,28 268608,83 284567,51 
IE 0 0 0 0 0 0 0 0 0 0 0 
IT 0 267503,38 1022098,4 1497733,4 1497733,4 0 0 0 0 0 245484,07 
LV  0 0 0 0 0 0 12154,4 26191,61 38997,1 72860,95 77901,74 
LT 0 0 0 0 16180,15 4640,65 24396,4 39375,93 53006,74 92633,42 94042,77 
LU 8700,18 40181,7 72870,48 99511,91 99511,91 0 0 0 0 7737,97 39702,56 
MT 0 0 0 4540,09 5534,14 0 0 0 0 0 0 
NL. 35216,46 146893,33 146893,33 146893,33 146893,33 0 0 0 0 0 0 
PL 0 0 0 0 0 287861,52 538009,34 718921,08 874792,11 1571498,4 1247869,1 
PT 0 0 0 125058,28 273227,16 0 0 0 0 63728,21 177445,94 
SK 0 0 0 0 19734,17 9318,61 26890,24 40132,19 52100,44 89725,19 87236,44 
SI 0 0 25448,72 54710,81 84112,44 0 6074,09 22306,22 37430,75 72389,72 86852,83 
ES 0 0 0 0 138364,16 0 0 137403,26 429590,25 1047925,9 1395289,4 
SE 81303,86 81303,86 81303,86 81303,86 81303,86 0 0 0 0 0 0 
UK  0 0 0 0 0 0 0 0 0 0 0 
Total  138020,39 831034,76 1980855,4 2987649,6 3796497, 3 328996,91 886295,15 1552156,9 2319772,8 4546277,6 5130658,3 
 
 
EN 62   EN THE IMPACT ON INFLATION  
Table 9.a - Impact on inflation if the 57% rule were applied to all cigarettes (Option B) 
WAP 57% WAP 59% WAP 61% WAP 63% WAP 65% 
MS 
HICP`s 
weight 2006 
new HICP`s 
weight 
Current 
WAP  
Capping 
€122  
increase 
impact on 
inflation 
capping 
€122  
increase 
impact on 
inflation 
capping 
€122  
increase 
impact on 
inflation 
capping 
€122 
increase 
Impact on 
inflation 
capping 
€122  
increase 
impact on 
inflation 
AT 18,58 18,50 174,76 177,37 1,49% 0,03% 189,20 8,27% 0,15% 197,80 13,18% 0,24% 200,75 14,87% 0,28% 201,59 15,36% 0,28% 
BE 11,04 10,99 188,59 188,59 0,00% 0,00% 196,87 4,39% 0,05% 199,43 5,75% 0,06% 202,71 7,49% 0,08% 204,37 8,37% 0,09% 
BG 30,00 29,87 91,38 91,38 0,00% 0,00% 91,38 0,00% 0,00% 91,38 0,00% 0,00% 91,38 0,00% 0,00% 91,38 0,00% 0,00% 
CY 21,31 21,22 167,35 170,78 2,05% 0,04% 177,22 5,90% 0,13% 185,64 10,93% 0,23% 191,33 14,33% 0,30% 196,73 17,56% 0,37% 
CZ 51,38 51,16 102,55 105,13 2,51% 0,13% 107,35 4,67% 0,24% 110,83 8,07% 0,41% 116,07 13,18% 0,67% 121,34 18,32% 0,94% 
DK 25,20 25,09 197,64 203,05 2,74% 0,07% 203,73 3,08% 0,08% 203,88 3,16% 0,08% 206,74 4,61% 0,12% 208,45 5,47% 0,14% 
EE 31,12 30,99 102,83 103,02 0,18% 0,01% 104,41 1,54% 0,05% 107,10 4,15% 0,13% 111,60 8,53% 0,26% 117,42 14,19% 0,44% 
FI 18,48 18,40 194,11 194,11 0,00% 0,00% 202,46 4,30% 0,08% 206,09 6,17% 0,11% 206,09 6,17% 0,11% 206,09 6,17% 0,11% 
FR 19,95 19,86 238,01 238,01 0,00% 0,00% 238,01 0,00% 0,00% 238,01 0,00% 0,00% 238,01 0,00% 0,00% 238,01 0,00% 0,00% 
DE  32,23 32,09 214,18 214,18 0,00% 0,00% 214,18 0,00% 0,00% 214,18 0,00% 0,00% 214,18 0,00% 0,00% 214,18 0,00% 0,00% 
EL 41,77 41,59 117,37 117,37 0,00% 0,00% 122,06 4,00% 0,17% 131,14 11,73% 0,49% 142,21 21,16% 0,88% 151,41 29,00% 1,21% 
HU 28,75 28,63 103,34 104,38 1,01% 0,03% 105,89 2,47% 0,07% 110,25 6,70% 0,19% 117,44 13,65% 0,39% 125,85 21,79% 0,62% 
IE 53,96 53,73 322,11 322,11 0,00% 0,00% 322,11 0,00% 0,00% 322,11 0,00% 0,00% 322,11 0,00% 0,00% 322,11 0,00% 0,00% 
IT 20,76 20,67 165,10 165,10 0,00% 0,00% 169,99 2,96% 0,06% 184,15 11,54% 0,24% 196,06 18,76% 0,39% 196,06 18,76% 0,39% 
LV  27,68 27,56 97,91 98,35 0,45% 0,01% 98,98 1,09% 0,03% 100,36 2,50% 0,07% 102,49 4,68% 0,13% 105,70 7,95% 0,22% 
LT 24,05 23,95 98,12 98,84 0,73% 0,02% 100,45 2,37% 0,06% 102,94 4,91% 0,12% 107,26 9,31% 0,22% 113,28 15,45% 0,37% 
LU 105,70 105,25 155,47 160,03 2,94% 0,31% 170,35 9,57% 1,01% 179,50 15,46% 1,63% 188,28 21,11% 2,22% 191,87 23,42% 2,46% 
MT 32,51 32,37 175,05 175,05 0,00% 0,00% 175,05 0,00% 0,00% 176,83 1,01% 0,03% 185,14 5,77% 0,19% 191,64 9,48% 0,31% 
NL. 24,42 24,31 188,46 197,60 4,85% 0,12% 200,22 6,24% 0,15% 201,61 6,98% 0,17% 203,50 7,98% 0,19% 205,15 8,85% 0,22% 
PL 26,54 26,43 83,56 83,56 0,00% 0,00% 83,56 0,00% 0,00% 83,66 0,12% 0,00% 84,62 1,28% 0,03% 86,29 3,27% 0,09% 
PT 20,05 19,96 138,84 139,47 0,45% 0,01% 141,22 1,71% 0,03% 146,90 5,80% 0,12% 158,10 13,87% 0,28% 169,40 22,01% 0,44% 
SK 24,68 24,57 96,16 97,50 1,39% 0,03% 99,35 3,31% 0,08% 102,27 6,35% 0,16% 106,23 10,48% 0,26% 112,15 16,63% 0,41% 
SI 31,15 31,02 115,25 115,27 0,02% 0,00% 117,42 1,88% 0,06% 124,86 8,34% 0,26% 136,84 18,74% 0,58% 151,63 31,57% 0,98% 
ES 21,95 21,86 112,79 112,79 0,00% 0,00% 112,79 0,00% 0,00% 112,79 0,00% 0,00% 112,96 0,14% 0,00% 117,63 4,29% 0,09% 
SE 20,58 20,49 201,29 214,56 6,59% 0,14% 215,26 6,94% 0,14% 217,52 8,06% 0,17% 219,11 8,85% 0,18% 219,53 9,06% 0,19% 
UK  26,00 25,89 341,62 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00% 0,00% 
Av 30,38 30,25 160,92 162,66 1,05% 0,04% 165,43 2,87% 0,10% 168,96 5,42% 0,19% 173, 19 8,65% 0,30% 176,96 11,81% 0,40% 
 
EN 63   EN  
Table 9.b - Impact on inflation if the €64 rule were applied to all cigarettes (Option C) 
MS 
HICP‘s 
weight 2006 
new HICP‘s 
weight 
Current WAP  
WAP €64 
Incr. 
(%) 
impact on 
inflation 
WAP €70 
Incr. 
(%) 
impact on 
inflation 
WAP €75 
Incr. 
(%) 
impact on 
inflation 
WAP €80 
Incr. 
(%). 
impact on 
inflation 
WAP €90 
Incr. 
(%) 
impact on 
inflation 
WAP €100 
Incr. 
(%) 
impact  
on  
inflation 
AT 18,58 18,50 174,76 174,76 0,00% 0,00% 174,76 0,00 0,00% 174,76 0,00 0,00% 174,76 0,00 0,00% 174,94 0,10 0,00% 177,36 1,49 0,03% 
BE 11,04 10,99 188,59 188,59 0,00% 0,00% 188,59 0,00 0,00% 188,59 0,00 0,00% 188,59 0,00 0,00% 188,59 0,00 0,00% 189,23 0,34 0,00% 
BG 30,00 29,87 91,38 93,25 2,04% 0,06% 100,24 9,69 0,29% 106,24 16,26 0,49% 112,24 22,83 0,68% 124,24 35,96 1,07% 136,24 49,09 1,47% 
CY 21,31 21,22 167,35 167,35 0,00% 0,00% 167,35 0,00 0,00% 167,35 0,00 0,00% 167,35 0,00 0,00% 169,37 1,21 0,03% 174,54 4,30 0,09% 
CZ 51,38 51,16 102,55 105,38 2,76% 0,14% 111,05 8,29 0,42% 116,54 13,64 0,70% 122,47 19,42 0,99% 134,37 31,02 1,59% 146,27 42,63 2,18% 
DK 25,20 25,09 197,64 197,64 0,00% 0,00% 197,64 0,00 0,00% 197,64 0,00 0,00% 197,64 0,00 0,00% 197,64 0,00 0,00% 197,64 0,00 0,00% 
EE 31,12 30,99 102,83 104,44 1,57% 0,05% 108,99 5,99 0,19% 114,16 11,01 0,34% 120,00 16,70 0,52% 131,80 28,17 0,87% 143,60 39,65 1,23% 
FI 18,48 18,40 194,11 194,11 0,00% 0,00% 194,11 0,00 0,00% 194,11 0,00 0,00% 194,11 0,00 0,00% 194,11 0,00 0,00% 194,11 0,00 0,00% 
FR 19,95 19,86 238,01 238,01 0,00% 0,00% 238,01 0,00 0,00% 238,01 0,00 0,00% 238,01 0,00 0,00% 238,01 0,00 0,00% 238,01 0,00 0,00% 
DE  32,23 32,09 214,18 214,18 0,00% 0,00% 214,18 0,00 0,00% 214,18 0,00 0,00% 214,18 0,00 0,00% 214,18 0,00 0,00% 214,18 0,00 0,00% 
EL 41,77 41,59 117,37 122,02 3,96% 0,16% 125,46 6,89 0,29% 128,54 9,52 0,40% 131,77 12,26 0,51% 142,27 21,21 0,88% 154,15 31,33 1,30% 
HU 28,75 28,63 103,34 105,58 2,17% 0,06% 110,74 7,16 0,21% 116,48 12,72 0,36% 122,48 18,53 0,53% 134,48 30,14 0,86% 146,48 41,75 1,20% 
IE 53,96 53,73 322,11 322,11 0,00% 0,00% 322,11 0,00 0,00% 322,11 0,00 0,00% 322,11 0,00 0,00% 322,11 0,00 0,00% 322,11 0,00 0,00% 
IT 20,76 20,67 165,10 165,10 0,00% 0,00% 165,10 0,00 0,00% 165,10 0,00 0,00% 165,10 0,00 0,00% 165,10 0,00 0,00% 170,65 3,37 0,07% 
LV  27,68 27,56 97,91 98,29 0,39% 0,01% 102,93 5,12 0,14% 108,55 10,87 0,30% 114,44 16,89 0,47% 126,24 28,94 0,80% 138,04 40,99 1,13% 
LT 24,05 23,95 98,12 100,60 2,53% 0,06% 106,80 8,85 0,21% 112,67 14,83 0,36% 118,57 20,84 0,50% 130,37 32,86 0,79% 142,17 44,89 1,07% 
LU 105,70 105,25 155,47 155,47 0,00% 0,00% 155,47 0,00 0,00% 155,47 0,00 0,00% 156,15 0,44 0,05% 160,95 3,52 0,37% 169,66 9,13 0,96% 
MT 32,51 32,37 175,05 175,05 0,00% 0,00% 175,05 0,00 0,00% 175,05 0,00 0,00% 175,05 0,00 0,00% 175,05 0,00 0,00% 175,05 0,00 0,00% 
NL. 24,42 24,31 188,46 188,46 0,00% 0,00% 188,46 0,00 0,00% 188,46 0,00 0,00% 188,46 0,00 0,00% 188,46 0,00 0,00% 188,46 0,00 0,00% 
PL 26,54 26,43 83,56 91,30 9,27% 0,25% 98,24 17,57 0,46% 104,33 24,87 0,66% 110,43 32,17 0,85% 122,63 46,77 1,24% 134,83 61,37 1,62% 
PT 20,05 19,96 138,84 138,84 0,00% 0,00% 138,84 0,00 0,00% 138,84 0,00 0,00% 138,84 0,00 0,00% 144,87 4,34 0,09% 156,95 13,04 0,26% 
SK 24,68 24,57 96,16 100,43 4,43% 0,11% 106,81 11,08 0,27% 112,76 17,27 0,42% 118,71 23,45 0,58% 130,62 35,83 0,88% 142,52 48,21 1,18% 
SI 31,15 31,02 115,25 115,65 0,35% 0,01% 118,99 3,25 0,10% 123,59 7,24 0,22% 129,41 12,28 0,38% 141,40 22,69 0,70% 153,40 33,10 1,03% 
ES 21,95 21,86 112,79 113,71 0,81% 0,02% 115,30 2,22 0,05% 118,58 5,13 0,11% 122,94 8,99 0,20% 133,02 17,93 0,39% 144,47 28,08 0,61% 
SE 20,58 20,49 201,29 201,29 0,00% 0,00% 201,29 0,00 0,00% 201,29 0,00 0,00% 201,29 0,00 0,00% 201,29 0,00 0,00% 201,29 0,00 0,00% 
UK  26,00 25,89 341,62 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00 0,00% 341,62 0,00 0,00% 341,62 0,00 0,00% 341,62 0,00 0,00% 
Av 30,38 30,25 160,92 162,05 1,16% 0,04% 164,16 3,31 0,10% 166,35 5,51 0,17% 168,72 7,88 0,24% 174,14 13,1 0,4% 180,50 18,9 0,59% 
 
EN 64   EN Table 9.c - Impact on inflation if the 57% rule were applied to WAP (Option D) 
    57% 59% 61% 63% 65% 
MS 
HICP`s 
weight 2006 
new HICP`s 
weight 
Current 
WAP (corr.) 
capping €122  
Increase 
impact on 
inflation 
capping €122 
Increase 
impact on 
inflation 
capping €122  
Increase 
Impact on 
inflation 
capping €122  
Increase 
impact on 
inflation 
capping €122  
Increase 
impact on 
inflation 
AT 18,58 18,50 174,76 175,24 0,27% 0,01% 189,64 8,52% 0,16% 201,78 15,46% 0,29% 201,78 15,46% 0,29% 201,78 15,46% 0,29% 
BE 11,04 10,99 188,59 188,59 0,00% 0,00% 198,14 5,07% 0,06% 204,31 8,34% 0,09% 204,31 8,34% 0,09% 204,31 8,34% 0,09% 
BG 30,00 29,87 91,38 91,38 0,00% 0,00% 91,38 0,00% 0,00% 91,38 0,00% 0,00% 91,38 0,00% 0,00% 91,38 0,00% 0,00% 
CY 21,31 21,22 167,35 167,35 0,00% 0,00% 179,24 7,11% 0,15% 193,05 15,36% 0,33% 197,93 18,27% 0,39% 197,93 18,27% 0,39% 
CZ 51,38 51,16 102,55 102,55 0,00% 0,00% 102,55 0,00% 0,00% 102,55 0,00% 0,00% 108,93 6,22% 0,32% 120,38 17,38% 0,89% 
DK 25,20 25,09 197,64 199,60 0,99% 0,02% 209,88 6,20% 0,16% 209,88 6,20% 0,16% 209,88 6,20% 0,16% 209,88 6,20% 0,16% 
EE 31,12 30,99 102,83 102,83 0,00% 0,00% 102,83 0,00% 0,00% 102,83 0,00% 0,00% 102,83 0,00% 0,00% 109,89 6,86% 0,21% 
FI 18,48 18,40 194,11 194,11 0,00% 0,00% 204,30 5,25% 0,10% 206,09 6,17% 0,11% 206,09 6,17% 0,11% 206,09 6,17% 0,11% 
FR 19,95 19,86 238,01 238,01 0,00% 0,00% 238,01 0,00% 0,00% 238,01 0,00% 0,00% 238,01 0,00% 0,00% 238,01 0,00% 0,00% 
DE  32,23 32,09 214,18 214,18 0,00% 0,00% 214,18 0,00% 0,00% 214,18 0,00% 0,00% 214,18 0,00% 0,00% 214,18 0,00% 0,00% 
EL 41,77 41,59 117,37 117,37 0,00% 0,00% 117,95 0,49% 0,02% 128,19 9,22% 0,38% 140,38 19,61% 0,82% 155,14 32,18% 1,34% 
HU 28,75 28,63 103,34 103,34 0,00% 0,00% 103,34 0,00% 0,00% 103,34 0,00% 0,00% 108,51 5,01% 0,14% 120,35 16,47% 0,47% 
IE 53,96 53,73 322,11 322,11 0,00% 0,00% 322,11 0,00% 0,00% 322,11 0,00% 0,00% 322,11 0,00% 0,00% 322,11 0,00% 0,00% 
IT 20,76 20,67 165,10 165,10 0,00% 0,00% 170,08 3,02% 0,06% 185,31 12,25% 0,25% 196,06 18,76% 0,39% 196,06 18,76% 0,39% 
LV  27,68 27,56 97,91 97,91 0,00% 0,00% 97,91 0,00% 0,00% 97,91 0,00% 0,00% 97,91 0,00% 0,00% 97,91 0,00% 0,00% 
LT 24,05 23,95 98,12 98,12 0,00% 0,00% 98,12 0,00% 0,00% 98,12 0,00% 0,00% 98,12 0,00% 0,00% 103,74 5,73% 0,14% 
LU 105,70 105,25 155,47 158,43 1,90% 0,20% 169,76 9,19% 0,97% 182,84 17,60% 1,85% 194,88 25,35% 2,67% 194,88 25,35% 2,67% 
MT 32,51 32,37 175,05 175,05 0,00% 0,00% 175,05 0,00% 0,00% 175,05 0,00% 0,00% 189,19 8,08% 0,26% 192,51 9,97% 0,32% 
NL. 24,42 24,31 188,46 192,74 2,27% 0,06% 207,19 9,93% 0,24% 207,19 9,93% 0,24% 207,19 9,93% 0,24% 207,19 9,93% 0,24% 
PL 26,54 26,43 83,56 83,56 0,00% 0,00% 83,56 0,00% 0,00% 83,56 0,00% 0,00% 83,56 0,00% 0,00% 83,56 0,00% 0,00% 
PT 20,05 19,96 138,84 138,84 0,00% 0,00% 138,84 0,00% 0,00% 138,84 0,00% 0,00% 151,26 8,94% 0,18% 168,41 21,29% 0,43% 
SK 24,68 24,57 96,16 96,16 0,00% 0,00% 96,16 0,00% 0,00% 96,16 0,00% 0,00% 96,16 0,00% 0,00% 103,82 7,96% 0,20% 
SI 31,15 31,02 115,25 115,25 0,00% 0,00% 115,25 0,00% 0,00% 124,61 8,12% 0,25% 136,86 18,76% 0,58% 151,80 31,71% 0,98% 
ES 21,95 21,86 112,79 112,79 0,00% 0,00% 112,79 0,00% 0,00% 112,79 0,00% 0,00% 112,79 0,00% 0,00% 115,41 2,32% 0,05% 
SE 20,58 20,49 201,29 220,93 9,76% 0,20% 220,93 9,76% 0,20% 220,93 9,76% 0,20% 220,93 9,76% 0,20% 220,93 9,76% 0,20% 
UK  26,00 25,89 341,62 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00% 0,00% 
Av 30,38 30,25 160,92 162,04 0,58% 0,02% 165,42 2,48% 0,08% 168,56 4,55% 0,16% 172,03 7,11% 0,26% 175,74 10,39% 0,37% 
 
EN 65   EN Table 9.d - Impact on inflation if the €64 rule were applied to WAP (Option E) 
         €64     €70     €75     €80     €90     €100   
MS HICP`s 
weight 
2006  new  
HICP`s 
weight Current  
WAP 
(corr.) WAP Incr. impact  
on  
inflation WAP Incr. impact   
on  
inflation  WAP Incr. impact  
on 
inflation  WAP Incr. impact   
on  
inflation  90 € Incr. impact  
on  
inflation  WAP Incr. impact  
on 
inflation 
AT 18,58 18,50 174,76 174,76 0,00% 0,00% 174,76 0,00% 0,00% 174,76 0,00% 0,00% 174,76 0,00% 0,00% 174,76 0,00% 0,00% 175,37 0,35% 0,01% 
BE 11,04 10,99 188,59 188,59 0,00% 0,00% 188,59 0,00% 0,00% 188,59 0,00% 0,00% 188,59 0,00% 0,00% 188,59 0,00% 0,00% 188,59 0,00% 0,00% 
BG 30,00 29,87 91,38 93,04 1,81% 0,05% 100,24 9,69% 0,29% 106,24 16,26% 0,49% 112,24 22,83% 0,68% 124,24 26,45% 0,79% 136,24 49,09% 1,47% 
CY 21,31 21,22 167,35 167,35 0,00% 0,00% 167,35 0,00% 0,00% 167,35 0,00% 0,00% 167,35 0,00% 0,00% 167,35 0,00% 0,00% 172,63 3,16% 0,07% 
CZ 51,38 51,16 102,55 103,42 0,85% 0,04% 110,57 7,81% 0,40% 116,52 13,61% 0,70% 122,47 19,42% 0,99% 134,37 23,68% 1,21% 146,27 42,62% 2,18% 
DK 25,20 25,09 197,64 197,64 0,00% 0,00% 197,64 0,00% 0,00% 197,64 0,00% 0,00% 197,64 0,00% 0,00% 197,64 0,00% 0,00% 197,64 0,00% 0,00% 
EE 31,12 30,99 102,83 102,83 0,00% 0,00% 108,20 5,22% 0,16% 114,10 10,96% 0,34% 120,00 16,70% 0,52% 131,80 21,98% 0,68% 143,60 39,65% 1,23% 
FI 18,48 18,40 194,11 194,11 0,00% 0,00% 194,11 0,00% 0,00% 194,11 0,00% 0,00% 194,11 0,00% 0,00% 194,11 0,00% 0,00% 194,11 0,00% 0,00% 
FR 19,95 19,86 238,01 238,01 0,00% 0,00% 238,01 0,00% 0,00% 238,01 0,00% 0,00% 238,01 0,00% 0,00% 238,01 0,00% 0,00% 238,01 0,00% 0,00% 
DE  32,23 32,09 214,18 214,18 0,00% 0,00% 214,18 0,00% 0,00% 214,18 0,00% 0,00% 214,18 0,00% 0,00% 214,18 0,00% 0,00% 214,18 0,00% 0,00% 
EL 41,77 41,59 117,37 117,37 0,00% 0,00% 118,44 0,91% 0,04% 124,39 5,98% 0,25% 130,34 11,05% 0,46% 142,24 17,48% 0,73% 154,14 31,32% 1,30% 
HU 28,75 28,63 103,34 103,34 0,00% 0,00% 110,48 6,91% 0,20% 116,48 12,72% 0,36% 122,48 18,52% 0,53% 134,48 23,16% 0,66% 146,48 41,75% 1,20% 
IE 53,96 53,73 322,11 322,11 0,00% 0,00% 322,11 0,00% 0,00% 322,11 0,00% 0,00% 322,11 0,00% 0,00% 322,11 0,00% 0,00% 322,11 0,00% 0,00% 
IT 20,76 20,67 165,10 165,10 0,00% 0,00% 165,10 0,00% 0,00% 165,10 0,00% 0,00% 165,10 0,00% 0,00% 165,10 0,00% 0,00% 169,66 2,77% 0,06% 
LV  27,68 27,56 97,91 97,91 0,00% 0,00% 102,64 4,84% 0,13% 108,54 10,86% 0,30% 114,44 16,89% 0,47% 126,24 22,44% 0,62% 138,04 40,99% 1,13% 
LT 24,05 23,95 98,12 99,69 1,60% 0,04% 106,77 8,81% 0,21% 112,67 14,83% 0,36% 118,57 20,84% 0,50% 130,37 24,74% 0,59% 142,17 44,89% 1,07% 
LU 105,70 105,25 155,47 155,47 0,00% 0,00% 155,47 0,00% 0,00% 155,47 0,00% 0,00% 155,47 0,00% 0,00% 158,08 1,65% 0,17% 169,58 9,08% 0,96% 
MT 32,51 32,37 175,05 175,05 0,00% 0,00% 175,05 0,00% 0,00% 175,05 0,00% 0,00% 175,05 0,00% 0,00% 175,05 0,00% 0,00% 175,05 0,00% 0,00% 
NL. 24,42 24,31 188,46 188,46 0,00% 0,00% 188,46 0,00% 0,00% 188,46 0,00% 0,00% 188,46 0,00% 0,00% 188,46 0,00% 0,00% 188,46 0,00% 0,00% 
PL 26,54 26,43 83,56 90,91 8,81% 0,23% 98,23 17,57% 0,46% 104,33 24,87% 0,66% 110,43 32,17% 0,85% 122,63 31,87% 0,84% 134,83 61,37% 1,62% 
PT 20,05 19,96 138,84 138,84 0,00% 0,00% 138,84 0,00% 0,00% 138,84 0,00% 0,00% 138,84 0,00% 0,00% 144,85 4,15% 0,08% 156,95 13,04% 0,26% 
SK 24,68 24,57 96,16 99,67 3,65% 0,09% 106,81 11,08% 0,27% 112,76 17,27% 0,42% 118,71 23,45% 0,58% 130,62 26,38% 0,65% 142,52 48,21% 1,18% 
SI 31,15 31,02 115,25 115,25 0,00% 0,00% 117,39 1,86% 0,06% 123,39 7,07% 0,22% 129,39 12,27% 0,38% 141,39 18,49% 0,57% 153,40 33,10% 1,03% 
ES 21,95 21,86 112,79 112,79 0,00% 0,00% 112,79 0,00% 0,00% 115,39 2,30% 0,05% 121,19 7,44% 0,16% 132,79 15,06% 0,33% 144,39 28,01% 0,61% 
SE 20,58 20,49 201,29 201,29 0,00% 0,00% 201,29 0,00% 0,00% 201,29 0,00% 0,00% 201,29 0,00% 0,00% 201,29 0,00% 0,00% 201,29 0,00% 0,00% 
UK  26,00 25,89 341,62 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00% 0,00% 341,62 0,00% 0,00% 
Av 30,38 30,25 160,92 161,49 0,64% 0,02% 163,66 2,87% 0,09% 166,05 5,26% 0,16% 168,57 7,75% 0,24% 173,94 9,90% 0,31% 180,28 18,82% 0,59% 
 
EN 66   EN THE IMPACT ON HEALTH OBJECTIVES  
Table 10.a - Impact on price and demand of an increase of the minimum re quirement under Option B. 
  increase 57% increase 59% increase 61% increase 63% increase  65% 
  price demand  Price demand  price demand  price demand  price demand  
AT 1,49% -0,64% 8,27% -3,55% 13,18% -5,67% 14,87% -6,40% 15,36% -6,60% 
BE 0,00% 0,00% 4,39% -1,89% 5,75% -2,47% 7,49% -3,22% 8,37% -3,60% 
BG 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
CY 2,05% -0,88% 5,90% -2,54% 10,93% -4,70% 14,33% -6,16% 17,56% -7,55% 
CZ 2,51% -1,08% 4,67% -2,01% 8,07% -3,47% 13,18% -5,67% 18,32% -7,88% 
DK 2,74% -1,18% 3,08% -1,32% 3,16% -1,36% 4,61% -1,98% 5,47% -2,35% 
EE 0,18% -0,08% 1,54% -0,66% 4,15% -1,79% 8,53% -3,67% 14,19% -6,10% 
FI 0,00% 0,00% 4,30% -1,85% 6,17% -2,65% 6,17% -2,65% 6,17% -2,65% 
FR 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
DE  0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
EL 0,00% 0,00% 4,00% -1,72% 11,73% -5,04% 21,16% -9,10% 29,00% -12,47% 
HU 1,01% -0,43% 2,47% -1,06% 6,70% -2,88% 13,65% -5,87% 21,79% -9,37% 
IE 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
IT 0,00% 0,00% 2,96% -1,27% 11,54% -4,96% 18,76% -8,07% 18,76% -8,07% 
LV 0,45% -0,19% 1,09% -0,47% 2,50% -1,08% 4,68% -2,01% 7,95% -3,42% 
LT 0,73% -0,31% 2,37% -1,02% 4,91% -2,11% 9,31% -4,00% 15,45% -6,64% 
LU 2,94% -1,26% 9,57% -4,12% 15,46% -6,65% 21,11% -9,08% 23,42% -10,07% 
MT 0,00% 0,00% 0,00% 0,00% 1,01% -0,44% 5,77% -2,48% 9,48% -4,08% 
NL. 4,85% -2,08% 6,24% -2,68% 6,98% -3,00% 7,98% -3,43% 8,85% -3,81% 
PL 0,00% 0,00% 0,00% 0,00% 0,12% -0,05% 1,28% -0,55% 3,27% -1,41% 
PT 0,45% -0,19% 1,71% -0,74% 5,80% -2,49% 13,87% -5,97% 22,01% -9,46% 
SK 1,39% -0,60% 3,31% -1,43% 6,35% -2,73% 10,48% -4,50% 16,63% -7,15% 
SI 0,02% -0,01% 1,88% -0,81% 8,34% -3,59% 18,74% -8,06% 31,57% -13,57% 
ES 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,14% -0,06% 4,29% -1,84% 
SE 6,59% -2,83% 6,94% -2,98% 8,06% -3,47% 8,85% -3,81% 9,06% -3,90% 
UK 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
 
EN 67   EN  
Table 10.b - Impact on price and demand of an increase of the minimum re quirement under Option C. 
  €64  €70  €75  €80  €90  €100  
  price 
increase 
(%) demand  price 
increase 
(%) demand  price 
increase 
(%) demand  price 
increase 
(%) demand  price 
increase 
(%) demand  price 
increase (%) demand  
AT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,10% -0,05% 1,49% -0,64% 
BE 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,34% -0,15% 
BG 2,04% -0,88% 9,69% -4,17% 16,26% -6,99% 22,83% -9,82% 35,96% -15,46% 49,09% -21,11% 
CY 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 1,21% -0,52% 4,30% -1,85% 
CZ 2,76% -1,19% 8,29% -3,56% 13,64% -5,86% 19,42% -8,35% 31,02% -13,34% 42,63% -18,33% 
DK 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
EE 1,57% -0,67% 5,99% -2,58% 11,01% -4,74% 16,70% -7,18% 28,17% -12,11% 39,65% -17,05% 
FI 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
FR 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
DE  0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
EL 3,96% -1,70% 6,89% -2,96% 9,52% -4,09% 12,26% -5,27% 21,21% -9,12% 31,33% -13,47% 
HU 2,17% -0,93% 7,16% -3,08% 12,72% -5,47% 18,53% -7,97% 30,14% -12,96% 41,75% -17,95% 
IE 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
IT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 3,37% -1,45% 
LV 0,39% -0,17% 5,12% -2,20% 10,87% -4,67% 16,89% -7,26% 28,94% -12,44% 40,99% -17,63% 
LT 2,53% -1,09% 8,85% -3,80% 14,83% -6,38% 20,84% -8,96% 32,86% -14,13% 44,89% -19,30% 
LU 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,44% -0,19% 3,52% -1,52% 9,13% -3,92% 
MT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
NL. 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
PL 9,27% -3,99% 17,57% -7,55% 24,87% -10,69% 32,17% -13,83% 46,77% -20,11% 61,37% -26,39% 
PT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 4,34% -1,87% 13,04% -5,61% 
SK 4,43% -1,91% 11,08% -4,76% 17,27% -7,42% 23,45% -10,09% 35,83% -15,41% 48,21% -20,73% 
SI 0,35% -0,15% 3,25% -1,40% 7,24% -3,11% 12,28% -5,28% 22,69% -9,76% 33,10% -14,23% 
ES 0,81% -0,35% 2,22% -0,95% 5,13% -2,20% 8,99% -3,87% 17,93% -7,71% 28,08% -12,08% 
SE 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
UK 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
 
EN 68   EN Table 10.c - Impact on price and demand of an increase of the minimum re quirement under Option D. 
  increase 57% increase 59% increase 61% increase 63% increase 65% 
  Price deman
d  price deman
d  price deman
d  price deman
d  price deman
d  
AT 0,27% -0,12% 8,52% -3,66% 15,46% -6,65% 15,46% -6,65% 15,46% -6,65% 
BE 0,00% 0,00% 5,07% -2,18% 8,34% -3,58% 8,34% -3,58% 8,34% -3,58% 
BG 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
CY 0,00% 0,00% 7,11% -3,06% 15,36% -6,61% 18,27% -7,86% 18,27% -7,86% 
CZ 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 6,22% -2,67% 17,38% -7,47% 
DK 0,99% -0,43% 6,20% -2,66% 6,20% -2,66% 6,20% -2,66% 6,20% -2,66% 
EE 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 6,86% -2,95% 
FI 0,00% 0,00% 5,25% -2,26% 6,17% -2,65% 6,17% -2,65% 6,17% -2,65% 
FR 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
DE  0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
EL 0,00% 0,00% 0,49% -0,21% 9,22% -3,96% 19,61% -8,43% 32,18% -13,84% 
HU 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 5,01% -2,15% 16,47% -7,08% 
IE 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
IT 0,00% 0,00% 3,02% -1,30% 12,25% -5,27% 18,76% -8,07% 18,76% -8,07% 
LV 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
LT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 5,73% -2,46% 
LU 1,90% -0,82% 9,19% -3,95% 17,60% -7,57% 25,35% -10,90% 25,35% -10,90% 
MT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 8,08% -3,47% 9,97% -4,29% 
NL. 2,27% -0,98% 9,93% -4,27% 9,93% -4,27% 9,93% -4,27% 9,93% -4,27% 
PL 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
PT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 8,94% -3,84% 21,29% -9,16% 
SK 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 7,96% -3,42% 
SI 0,00% 0,00% 0,00% 0,00% 8,12% -3,49% 18,76% -8,07% 31,71% -13,64% 
ES 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 2,32% -1,00% 
SE 9,76% -4,20% 9,76% -4,20% 9,76% -4,20% 9,76% -4,20% 9,76% -4,20% 
UK 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
 
EN 69   EN Table 10.d - Impact on price and demand of an increase of the minimum re quirement under Option E. 
  €64  €70  €75  €80  €90  €100  
  Price 
increase 
(%) demand  price 
increase 
(%) demand  price 
increase 
(%) demand  price 
increase 
(%) demand  price 
increase 
(%) demand  price 
increase 
(%) demand  
AT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,35% -0,15% 
BE 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
BG 1,81% -0,78% 9,69% -4,17% 16,26% -6,99% 22,83% -9,82% 26,45% -11,4% 49,09% -21,1% 
CY 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 3,16% -1,36% 
CZ 0,85% -0,37% 7,81% -3,36% 13,61% -5,85% 19,42% -8,35% 23,68% -10,2% 42,62% -18,3% 
DK 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
EE 0,00% 0,00% 5,22% -2,25% 10,96% -4,71% 16,70% -7,18% 21,98% -9,45% 39,65% -17% 
FI 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
FR 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
DE  0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
EL 0,00% 0,00% 0,91% -0,39% 5,98% -2,57% 11,05% -4,75% 17,48% -7,52% 31,32% -13,5% 
HU 0,00% 0,00% 6,91% -2,97% 12,72% -5,47% 18,52% -7,97% 23,16% -9,96% 41,75% -18% 
IE 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
IT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 2,77% -1,19% 
LV 0,00% 0,00% 4,84% -2,08% 10,86% -4,67% 16,89% -7,26% 22,44% -9,65% 40,99% -17,6% 
LT 1,60% -0,69% 8,81% -3,79% 14,83% -6,38% 20,84% -8,96% 24,74% -10,6% 44,89% -19,3% 
LU 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 1,65% -0,71% 9,08% -3,90% 
MT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
NL. 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
PL 8,81% -3,79% 17,57% -7,55% 24,87% -10,7% 32,17% -13,8% 31,87% -13,7% 61,37% -26,4% 
PT 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0 0,00% 4,15% -1,78% 13,04% -5,61% 
SK 3,65% -1,57% 11,08% -4,76% 17,27% -7,42% 23,45% -10,1% 26,38% -11,3% 48,21% -20,7% 
SI 0,00% 0,00% 1,86% -0,80% 7,07% -3,04% 12,27% -5,28% 18,49% -7,95% 33,10% -14,2% 
ES 0,00% 0,00% 0,00% 0,00% 2,30% -0,99% 7,44% -3,20% 15,06% -6,48% 28,01% -12,0% 
SE 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 
UK 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0 0,00% 
 
EN 70   EN Table 11.a - Impact on price and demand of an increa se of both minimum requirements (Option C and D) . 
MS Current situation  €90  €100  63% 65% 
  (corrected for new MS)                 
  cheapest Most expensive cheapest most expensive cheapest most 
expensive cheapest most 
expensive cheapest most 
expensive 
AT 150,0 190,0 151,4 190,0 163,4 190,0 177,8 209,2 189,8 209,2 
BE 160,4 210,5 160,4 210,5 163,5 210,5 178,8 212,9 190,1 212,9 
BG 85,3 94,4 122,1 125,3 134,1 137,3 85,3 94,4 85,3 94,4 
CY 144,0 200,7 149,7 200,7 161,2 200,7 167,7 214,2 183,0 214,2 
CZ 82,1 134,4 120,9 155,4 132,8 167,3 82,1 192,9 82,1 193,5 
DK 157,5 227,8 157,5 227,8 157,5 227,8 157,5 234,9 157,5 234,9 
EE 83,8 127,7 119,8 147,5 131,6 159,3 83,8 160,9 83,8 177,2 
FI 182,3 198,4 182,3 198,4 182,3 198,4 201,5 207,8 201,5 207,8 
FR 223,3 250,0 223,3 250,0 223,3 250,0 223,3 250,0 223,3 250,0 
DE  180,0 230,0 180,0 230,0 180,0 230,0 180,0 230,0 180,0 230,0 
EL 75,0 150,0 119,8 154,9 131,7 166,8 75,0 191,0 75,0 193,0 
HU 72,9 130,0 114,5 151,9 126,5 163,9 72,9 180,0 72,9 190,3 
IE 300,0 335,0 300,0 335,0 300,0 335,0 300,0 335,0 300,0 335,0 
IT 160,0 200,0 160,0 200,0 167,9 200,0 194,3 208,0 194,3 208,0 
LV 81,6 141,3 114,1 158,5 125,9 170,3 81,6 196,3 81,6 196,3 
LT 78,5 124,4 116,1 149,6 127,9 161,4 78,5 168,9 78,5 186,0 
LU 120,0 180,0 136,6 180,0 148,1 181,1 120,3 206,4 131,2 206,4 
MT 151,4 186,4 151,4 186,4 151,4 186,4 151,4 197,2 151,4 197,2 
NL. 155,3 210,5 155,3 210,5 155,3 210,5 155,3 224,2 155,3 224,2 
PL 65,9 109,1 112,4 137,3 124,6 149,5 65,8 118,8 65,8 132,8 
PT 125,0 157,5 132,3 159,3 144,4 171,4 125,0 198,0 125,0 198,0 
SK 71,0 123,9 112,9 150,1 124,8 162,0 71,0 171,6 71,0 188,1 
SI 92,6 132,3 131,0 149,3 143,0 161,3 94,1 169,2 104,3 187,6 
ES 87,5 137,5 124,5 141,5 136,1 153,1 87,5 137,7 87,5 150,7 
SE 161,2 225,6 161,2 225,6 161,2 225,6 161,2 240,7 161,2 240,7 
UK 305,2 391,2 305,2 391,2 305,2 391,2 305,2 391,2 305,2 391,2 
AV 136,6 184,6 154,4 192,9 161,7 198,5 141,4 205,4 143,7 209,6 
 
EN 71   EN Table 11.b - Impact on price and demand of an increa se of both minimum requirements (Option C and D). 
MS Current situation  
  (corrected for new MS) €100and 63% €100and 65% €90 and 63% €90 and 65% 
  cheapest Most expensive cheapest most expensive cheapest most 
expensive cheapest most 
expensive cheapest most 
expensive 
AT 150,0 190,0 177,8 209,2 189,8 209,2 177,8 209,2 189,8 209,2 
BE 160,4 210,5 178,8 212,9 190,1 212,9 178,8 212,9 190,1 212,9 
BG 85,3 94,4 134,1 137,3 134,1 137,3 122,1 125,3 122,1 125,3 
CY 144,0 200,7 167,7 214,2 183,0 214,2 167,7 214,2 183,0 214,2 
CZ 82,1 134,4 132,8 192,9 132,8 193,5 120,9 192,9 120,9 193,5 
DK 157,5 227,8 157,5 234,9 157,5 234,9 157,5 234,9 157,5 234,9 
EE 83,8 127,7 131,6 160,9 131,6 177,2 119,8 160,9 119,8 177,2 
FI 182,3 198,4 201,5 207,8 201,5 207,8 201,5 207,8 201,5 207,8 
FR 223,3 250,0 223,3 250,0 223,3 250,0 223,3 250,0 223,3 250,0 
DE  180,0 230,0 180,0 230,0 180,0 230,0 180,0 230,0 180,0 230,0 
EL 75,0 150,0 131,7 191,0 131,7 193,0 119,8 191,0 119,8 193,0 
HU 72,9 130,0 126,5 180,0 126,5 190,3 114,5 180,0 114,5 190,3 
IE 300,0 335,0 300,0 335,0 300,0 335,0 300,0 335,0 300,0 335,0 
IT 160,0 200,0 194,3 208,0 194,3 208,0 194,3 208,0 194,3 208,0 
LV 81,6 141,3 125,9 196,3 125,9 196,3 114,1 196,3 114,1 196,3 
LT 78,5 124,4 127,9 168,9 127,9 186,0 116,1 168,9 116,1 186,0 
LU 120,0 180,0 148,1 206,4 148,1 206,4 136,6 206,4 136,6 206,4 
MT 151,4 186,4 151,4 197,2 151,4 197,2 151,4 197,2 151,4 197,2 
NL. 155,3 210,5 155,3 224,2 155,3 224,2 155,3 224,2 155,3 224,2 
PL 65,9 109,1 124,6 149,5 124,6 149,5 112,4 137,3 112,4 137,3 
PT 125,0 157,5 144,4 198,0 144,4 198,0 132,3 198,0 132,3 198,0 
SK 71,0 123,9 124,8 171,6 124,8 188,1 112,9 171,6 112,9 188,1 
SI 92,6 132,3 143,0 169,2 143,0 187,6 131,0 169,2 131,0 187,6 
ES 87,5 137,5 136,1 153,1 136,1 153,1 124,5 141,5 124,5 150,7 
SE 161,2 225,6 161,2 240,7 161,2 240,7 161,2 240,7 161,2 240,7 
UK 305,2 391,2 305,2 391,2 305,2 391,2 305,2 391,2 305,2 391,2 
AV 136,6 184,6 164,8 208,9 166,3 212,0 158,9 207,5 160,4 211,0 
 
EN 72   EN FINE CUT TOBACCO  
Table 12 - Simulation fine cut tobacco on total aver age releases December 2004 fo r selected Member States11 
        Adjustment Excise Adjustment TIRSP TIRSP 
  TIRSP Excise  Excise% Minimum dut y Minimum dut y Scenario 1 Scenario 2 Scenario 3 Scenario 4 Cigarettes 
 per 1000 per 1000 per 1000 40% 57% €43 €56 40%+€43 40% +€56 57%+€43 57%+ €56   
Belgium  74 28 38% 2% 19% 15 28 90 103 90 103 181 
Denmark 125 61 49% 8% 125 125 135 135 200 
Greece 114 67 59% 114 114 114 114 96 
Spain 64 24 38% 3% 20% 19 32 83 96 83 96 114 
Finland 98 53 54% 3% 98 98 101 101 190 
France 126 75 59% 126 126 126 126 238 
Italy 89 48 54% 3% 8 89 97 92 97 159 
Hun gary 36 17 47% 10% 26 39 62 75 62 75 88 
Netherlands 77 39 51% 6% 4 17 81 94 82 94 186 
Luxembour g 64 23 36% 4% 21% 20 33 84 97 84 97 141 
German y 81 47 59% 9 81 89 81 89 141 
Poland 26 14 54% 3% 29 42 55 68 55 68 53 
Avera ge TIRSP: 81  91 99 92 100 149 
GAP between 4,8  2,3 1,9 2,5 1,9 4,512 
Conclusion : Scenario 2 and 4 entail the best approximat ion between average TIRSP for fine cut in the selected Member States as well as be tween cigarettes and fine cut. The high 
specific minimum duty (53) is the best approximating factor. In both scenarios the TIRSP of fine cut would become at about 2:3 of the TIRSP for cigarettes. 
                                                 
11 Member States where fine cut has a substantial market share. 
12 Note that Poland and Hungary did not comply with the EU minima for cigarettes. 
 
EN 73   EN Table 13 - Examples of marketin g of the fine-cut products. 
Brand Producer Content gr Equiv. max. num. of 
cigarettes Ratio sticks per 
kilogram  
PALL MALL VOLUMEN TABAK FULL FLAVOUR BAT 55 110 0,50 2000  
PALL MALL VOLUMEN TABAK FULL FLAVOUR BAT 80 160 0,50 2000  
PALL MALL VOLUMEN TABAK SMOOTH TASTE BAT 55 110 0,50 2000  
PALL MALL VOLUMEN TABAK SMOOTH TASTE BAT 80 160 0,50 2000  
PL 88 EXPANDED TOBACCO Planta 140 259 0,54 1850  
RONSON SPECIAL RED TOBACCO Japan 
Tobacco 60 111 0,54 1850  
PL 88 EXPANDED TOBACCO Planta 25 46 0,54 1840  
GOLDFIELD VOLUMEN TABAK FULL FLAVOUR TMCC 70 128 0,55 1829  
JOHN PLAYER SPECIAL RED SINGLE  TOBACCO Imperial 55 100 0,55 1818  
JOHN PLAYER SPECIAL SILVER SINGLE 
TOBACCO Imperial 55 100 0,55 1818  
NEXT FULL FLAVOR VOLUME TOBACCO PMP 55 100 0,55 1818  
YUKON VOLUMENTABAK Pöschl 70 127 0,55 1814  
JOHN PLAYER SPECIAL RED SINGLE  TOBACCO Imperial 80 145 0,55 1813  
JOHN PLAYER SPECIAL SILVER SINGLE 
TOBACCO Imperial 80 145 0,55 1813  
WEST RED SINGLE TOBACCO Imperial 70 121 0,58 1729  
WEST SILVER SINGLE TOBACCO Imperial 70 121 0,58 1729  
BURTON ORIGINAL STICKS TOBACCO Von Eicken 110 180 0,61 1636  
BURTON SILVER STICKS TOBACCO Von Eicken 110 180 0,61 1636  
CONVENT FULL FLAVOR STICKS TOBACCO Dingelstädt 110 180 0,61 1636  
PL 88 BLAU EXPANDED TOBACCO Planta 110 180 0,61 1636  
BURTON ORIGINAL STICKS TOBACCO Von Eicken 60 98 0,61 1633  
BURTON SILVER STICKS TOBACCO Von Eicken 60 98 0,61 1633  
FARGO Landewyck 25 40 0,63 1600  
PL 88 BLAU EXPANDED TOBACCO Planta 25 40 0,63 1600  
MADISON VOLUME TOBACCO Junk 100 150 0,67 1500  
TRUMPET VOLUME TOBACCO Domsky 60 86 0,70 1433  
ROCCO STICKS TOBACCO Domsky 135 193 0,70 1430  
L&M PREMIER FINE CUT PMP 140 200 0,70 1429  
 
EN 74   EN Annex 14 - Simulations on the basis of the MPPC for fine-cut tobacco on 1 January 2007 
Data on the MPPC for fine-cut has been co llected from ESTA (European Smoking Tobacco 
Association). Note that for the comparison with  cigarettes the excise duty on cigarettes has 
been increased to €64 for the Member States  with derogations to the minimum rates. 
Graph a:  
Excise yield FC €43 (1kg =1000 sticks)
0,050,0100,0150,0200,0250,0300,0
BE BG CZDK DEEE EL ES FR IE ITCY LV LT LU HU MT NLAT PLPT SISKFISE UK
average€excise cigarettes
excise fine cut €43
excise fine-cut 2007
 
Graph b:  
Exicise yield FC €56 (1kg=1333 sticks)
0,050,0100,0150,0200,0250,0300,0
BE BGCZ DK DEEE EL ES FR IE ITCY LV LTLU HU MT NL AT PL PT SISKFISE UK
average€excise cigarettes
excise fine cut €56
excise fine cut 2007
 
Graph c:   
Excise Yield FC €60 (1kg= 1000 sticks) 
€ 0€ 50€ 100€ 150€ 200€ 250€ 300
BE BG CZDKDE EE ELES FR IE ITCY LV LT LUHU MTNL AT PL PT SISKFISEUK
AverageCigarettes €90 and 63%
Finecut €60
Finecut 2007
 
 
EN 75   EN Graph d:  
Excise Yield FC €80 (1kg= 1333 sticks)
€ 0€ 50€ 100€ 150€ 200€ 250€ 300
BE BG CZDK DE EE EL ES FR IE ITCY LVLT LUHU MT NL AT PL PT SISKFISE UK
AverageCigarettes €90 and 63%
Finecut €80
Finecut 2007
 
Graph e:  
TIRSP FC €43 (1kg= 1000 sticks)
050100150200250300350400450
BE BG CZDK DE EE ELES FRIE ITCY LV LTLUHU MT NL AT PL PT SISKFI
SE UK
Average€TIRSP cigarettes
TIRSP fine cut €43
excise fine-cut 2007
 
Graph f:  
TIRSP FC € 56 (1kg= 1333 sticks)
050100150200250300350400450
BEBGCZDKDEEEELESFR IE ITCYLVLTLUHUMT NL AT PL PT SISK FISEUK
Average€TIRSP cigarettes
TIRSP fine cut €56
TIRSP fine cut 2007
 
 
EN 76   EN Graph g:  
TIRSP FC €60 (1kg= 1000 sticks) 
0,0050,00100,00150,00200,00250,00300,00350,00400,00450,00
BE BG CZDKDEEE ELES FR IE ITCY LV LTLUHU MT NLATPL PT SISKFISEUK
Average€Cigarettes €90 (and 63%)
TIRSP FC €60
TIRSP FC 2007
 
Graph h:  
TIRSP FC €80 (1kg= 1333 sticks) 
0,0050,00100,00150,00200,00250,00300,00350,00400,00450,00
BE BG CZDKDEEEELES FR IE ITCY LV LTLUHUMTNL AT PLPT SISKFISEUK
Average€Cigarettes €90 (and 63%)
TIRSP FC €80
TIRSP FC 2007
 
Graph i:  
Proportional minimum requirement
0,00%10,00%20,00%30,00%40,00%50,00%60,00%70,00%80,00%90,00%
BE BG CZ DK DE EEEL ES FR IE ITCY LV LT LU HU MT NL AT PLPT SISKFISE UK
Average% in TIRSP €32
% in TIRSP €43
% in TIRSP €56
% in TIRSP €60
% in TIRSP €80
 
 
EN 77   EN j. Impact on demand of fine cut: Increases in TIRSP 
  TIRSP2007 TIRSP€60 increase TIRSP€80 increase 
BE 99,00 123,6 25% 147,8 49%
BG 89,48 123,1 38% 147,1 64%
CZ 43,58 82,4 89% 106,2 144%
DK 132,18 132,2 0% 156,3 18%
DE 117,50 122,4 4% 146,2 24%
EE 25,00 71,7 187% 95,3 281%
EL 106,00 106,0 0% 126,8 20%
ES 86,00 114,2 33% 137,4 60%
FR 130,00 130,0 0% 134,8 4%
IE 310,00 310,0 0% 310,0 0%
IT 102,50 105,6 3% 129,6 26%
CY 88,84 118,0 33% 141,0 59%
LV 81,21 113,0 39% 136,6 68%
LT 63,72 96,6 52% 120,2 89%
LU 83,00 117,6 42% 140,6 69%
HU 31,82 84,0 164% 108,0 239%
MT 116,47 116,5 0% 134,7 16%
NL 100,00 117,9 18% 141,7 42%
AT 97,00 114,3 18% 138,3 43%
PL 38,46 83,1 116% 107,5 179%
PT 106,25 126,7 19% 150,9 42%
SI 88,75 122,4 38% 146,4 65%
SK 69,57 98,0 41% 121,8 75%
FI 98,00 107,0 9% 131,4 34%
SE 206,80 206,8 0% 206,8 0%
UK 309,74 309,7 0% 309,7 0%
 
EN 78   EN Annex 15 – Questionnaire for data collection on cigarettes -  
DATA COLLECTION EXCISE DUTIES - QUESTIONNAIRE   
   
MEMBER STATE:   
Please fill out packin g units.   
Please fill out price cate gories per packin g unit.   
Packin g unit price cate gory Jan Feb Ma rApr ….. Total 
packin g unit A price cate gory 1     
packin g unit A price cate gory 2   0
packin g unit A add price cate gories   0
packin g unit A price cate gory x   0
     
packin g unit B  price cate gory 1     
packin g unit B price cate gory 2   0
packin g unit B add price cate gories   0
packin g unit B price cate gory x   0
add packin g units    
  price cate gory 1   0
  price cate gory 2   0
  add price cate gories   0
  price cate gory x   0
      
packin g unit X  price cate gory 1   0
packin g unit X  price cate gory 2   0
packin g unit X  add price cate gories   0
packin g unit X  price cate gory x   0
Adjusting of ad valorem and specific duties in order to reach 64 Euro on MPPC - 
Extrapolation 1 January 2006 excise rates  
pre-
tax Adapted 
specific  Adapted 
ad 
valorem 
% Adapted 
ad 
valorem 
in € Total 
tax 
original rel
sp
inMember 
State Original 
specific  Original 
ad 
valorem 
% Original 
ad 
valorem 
in € Total tax 
on 
MPPC 
(original) % 
specific 
in total % ad 
valorem 
in total  
Bulgaria 7,67 0,48 29,83 37,5 20% 80% 14,29 13,09 0,54 50,91 64 2
Cezch 
Republic 20,27 0,24 17,84 38,11 53% 47% 24,35 34,04 0,29 29,96 64 5
Estonia 17,58 0,26 16,29 33,87 52% 48% 19,24 33,22 0,31 30,78 64 5
Hungary 27,45 0,27 23,7 51,15 54% 46% 22,00 34,35 0,29 29,65 64 5
Latvia 10,92 0,148 4,68 15,6 70% 30% 11,19 44,80 0,22 19,20 64 7
Lithuania 13,76 0,15 8,14 21,9 63% 37% 24,11 40,21 0,23 23,79 64 6
Poland 19,17 0,313 23,37 42,54 45% 55% 18,66 28,84 0,35 35,16 64 4
Romania  9,1 0,3 14,78 23,88 38% 62% 16,02 24,39 Na 39,61 64 3
Slovakia 28,31 0,23 20,72 49,03 58% 42% 26,68 36,95 0,25 27,05 64 5
Slovenia 13,94 0,427101 40,13 54,07 26% 74% 24,22 16,50 0,45 47,50 64 2
 
EN 79   EN