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 applied to manufactured tobacco - Impact assessment {COM(2008) 459 final} {SEC(2008) 2267}
Date: 2008-07-16
Institutions: European Commission
Subjects: excise duty, tax harmonisation, tax on consumption, tobacco, tobacco industry

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COMMISSION OF THE EUROPEAN 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 applied to manufactured tobacco 

IMPACT ASSESSMENT 

{COM(2008) 459 final} 
{SEC(2008) 2267} 

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THIS 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 relationship between tobacco duties, 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 reduction of tobacco consumption. In addition it has 
been clarified how the objectives are inter-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 possible negative effects on the budgets of some 
Member  States.  In  addition  a  separate  chapter  on  compliance  costs  (fight  against  illicit 
trade)  has  been  added,  paying  particular  attention  to  the  impact  of  trade  from  third 
countries. 

•  As  concerns  the  presentation,  a  non-technical  summary  has  been  added  and  a  glossary 
explaining  the  technical  terminology  and  the  abbreviations.  The  table  comparing  the 
options has been simplified. Finally, a description of the data sources and data collection 
method has been added. 

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EXECUTIVE SUMMARY  

The Commission services have made an impact assessment focusing on potential measures that could 
modernise or add more transparency to the structure of excise duties on tobacco products. In addition, 
particular attention has been paid to the relationship between public health and the final price of the 
products,  taking  stock  of  the  WHO  Framework  Convention  on  Tobacco  Control,  as  well  as  to  the 
options to bring the structure and the rates of excise 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 position papers via a public web- consultation.  

In  order  to  examine  how  the  different  objectives  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 instability 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 distortions of competition between the different products of manufactured 
tobacco. It was therefore not an option 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  currently  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 the 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  current  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 which 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 

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and  with  a  view  to  tobacco  control.  However  an  increase  of  the  monetary  minimum  should  be 
combined with an increase of the 57% minimum requirement, 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 cigarettes 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 cigarettes 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% reduction over a period of 5 years would also be inline 
with  the  European  Strategy  for  Tobacco  Control"  (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  the  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  extremely  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 minimum 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 tax levels among Member States on fine-cut tobacco courage smuggling 
and cross border shopping between a number of neighbouring 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 consumption 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  significant  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  minimum  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  fine  cut  tobacco,  the  previous  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  respect  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) 

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Applying the aforementioned 2:3 relationship on the suggested 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 minimum 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, above 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 least €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 selling 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  excise  duty  may  not  represent  less 
than 5% or more than 55% of the amount of the 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  sum  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. 

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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  2007.  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. Its 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 contributions produced by various stake holders through 
various means such as the Public Consultation, position papers, articles, and meetings.  

Consultation methods, main sectors targeted and general profile of respondents 

Written  questionnaires  have  been  sent  to  the  ministries  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 the 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  manufactured  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  and  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 

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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  this  option  is  not  realistic,  they  could  accept  the 
implementation of a minimum requirement on the basis 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  structure  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  tobacco  sector  are  opposed  to  any  increase  in  taxation. 
Only a few contributions call for an increase in the level 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  industry  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  supports  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  view  that  the  different  tobacco  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 given 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 tax 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 expense 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/common/consultations/tax/index_en.htm 

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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-concept, 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  were  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 and 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 consists 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 between 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  total  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 represent 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  sum  of  specific  and  ad-valorem  duties  is  lower. 
This minimum excise tax may not be more than 100% of the total excise on the MPPC.  

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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  constantly  raise  the  excise  duty  in  order  to  comply 
with the 57% rule. 

•  Under  their  Acts  of  Accession,  a  number  of  new  Member  States  were  granted  derogations  to 
postpone the application of the minimum excise duties 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 force relate to cigars and cigarillos, 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  not  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  intended  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  transitional  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  States.  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 excise duties and prices of cigarettes in the EU: 

Table 1: Excise duties and TIRSP (MPPC) of cigarettes in Europe in 2006 

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Euro

o
ur
E

400

350

300

250

200

150

100

50

0

AT 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

MPPC
excise tax

MPPC
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 72 106 238

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

Member State

Table 2: Comparison of lowest, weighted average and highest price of cigarettes  
in Member States in 2006 (per 1000 sticks) 

400

375

350

325

300

275

250

225

200

175

150

125

100

75

50

25

0

3
5
0,
1
2

0
9
1

3
6,
9
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4
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A

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6

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6

G
B

5
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2
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CZ

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K
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FI

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6
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6

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2

0
9
9,
3

V
L

4
2,
7

1
7
1,
3

0
1
9,
4

T
L

9
4
5,
5
1

2
3
1

U
L

0
0
5,
7
1

1
4
1,
5
1

MT

6
4
8,
8
1

9
8
7,
5
1

NL

2
3
2,
8

9
8
8,
3
1

2
1
2,
4

1
6
8,
5

PL

5
2
1

T
P

O
R

Member State

8
1
1,
9
3

6
5,
2
2

8
5
1,
4
3

9
9
8,
1
1

2
5
5,
0
1

3
8
2,
0
1

SI

7
7
9,
8

3
6
5,
6

1
9
8,
7

K
S

5
7,
3
1

1
8
2,
1
1

5
7,
8

S
E

1
3
1,
0
2

5
1
1,
6
1

E
S

5
1
5,
0
3

K
U

lowest price
WAP

highest price  

The differences in TIRSP  pave the way for substantial cross border shopping and smuggling. These 
cross-border operations create distortions of competition in the tobacco market, lead to revenue losses 
and  losses  of  business  to  retailers  on  the  high-tax  side  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 represented approximately 13% of the EU-25 tobacco market whereas 4% 
to 5% consisted of legitimate cross-border shopping and 8% to 9% of illicit trade. However, the non-
domestically taxed part of tobacco consumptions represents 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  internal  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 significant, 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  affects  the  health  of  non-smokers,  particularly  in 
vulnerable groups, who are increasingly demanding protection.  

Taxation  forms  part  of  an  overall  strategy  of  prevention  and  dissuasion,  which  also  includes  other 
measures aimed at reducing demand such as non-price measures, protection from exposure to tobacco 

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smoke,  regulation  of  the  contents,  etc.  However,  according  to  the  World  Bank  price  increases  in 
tobacco products are the most effective single intervention 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  addition,  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 Member 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 the 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 largely 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  effective  level  to  address  Internal  Market  and  Health 
objectives. 

•  The  current  arrangements  for  cigarettes  complex,  not  transparent  and  result  in 

division of markets and distortions 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 year 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  tax  components,  price  structure,  external 
components,  etc.  Consequently,  government  tax  revenues  are  volatile  as  changes  in  the 
MPPC can trigger tax rate changes. As the MPPC 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  shifting  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  market  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  justifiable  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. 

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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  tobacco  are  taxed  differently,  imbalances  in 
taxation lead to substitution by other categories 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  States  are  free  to  determine  the  excise  structure  for 
fine-cut smoking tobacco intended for the rolling of cigarettes (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  cigarettes.  The  substantial  differences  in  tax  levels 
among Member States on fine-cut tobacco encourage smuggling and cross border shopping between a 
number of neighbouring countries. In addition, the gap 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 decreased 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 harmful 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 Community: 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  sufficient  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 tobacco 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 since 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 without any coordination at EU level, it gave rise to substantial cross-
border shopping and smuggling. In addition, with the recent enlargement of the EU, the tax and retail 
selling  price  differentials  between  Member  States  have  actually  widened.  This  gap  resulted  again  in 
significant  cross  border  shopping  and  smuggling.  When  all  new  Member  States  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  represented  approximately  13%  of  the  total  EU  tobacco 

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market.  The  markets  share  of  legitimate  circumvention  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 incentive to buy cigarettes across the border when price 
differences are or become substantial due to tax hikes and/or enlargement of the EU. For example: 

–  France: substantial cross-border shopping in Belgium, Luxembourg and Spain; 

–  Germany:  substantial  cross-border  shopping  in  the  Czech  Republic,  Luxembourg  and 

Poland. 

Although  the  total  non-domestically-taxed  consumption  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  main  markets  such  as  FR,  DE  and  UK).  In  addition, 
Industry sources indicate that since the latest accessions 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 States that maintain a relative low tax rate attract 
cross-border  shopping  and  illicit  trade,  thus  imposing  external  costs  on  other  Member  States.  The 
baseline scenario would maintain the negative effects on other Member States of low taxing policies. 
In  2006  the  excise  duties  collected  on  cigarettes  represented  in  the  EU  Member  States  (including 
Romania and Bulgaria) almost 70 billion Euro, which 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  potential  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.  Balkan  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 avoidable 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 without coordination with neighbouring Member States, 
it  has  given  rise  to  substantial  cross  border  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.  

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Without  an  increase  of  the  minimum  level  of  taxation  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 undermining directly the health objectives. 

Consequently, unless all Member States start to coordinate their health policy, 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 tobacco 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 annex). 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  tax  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 inflow 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-cut 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  the  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  protection  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  for  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  Council  Recommendation  of  2  December  2002  on  the 
prevention  of  smoking  and  on  initiatives  to  improve  tobacco  control  and  of  the  Framework 

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Convention on Tobacco Control, negotiated under the auspices of the World Health Organisation.  

More in particular the policy objectives are the following: 

•  Future  policy  should  ensure  the  smooth  operation  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 considerable 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 should 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 tax rate that is high relative to taxes in neighbouring 
Member  States  faces  cross-border  shopping  and  illicit  trade,  resulting  in  revenue  losses  and  the 
undermining  of  health  objectives.  On  the  other  hand,  Member  States  that  maintain  a  low  tax  rate 
attracts  cross-border  shopping  and  revenues,  thus  imposing  external  costs  on  other  Member  States. 
Therefore, future policy should reduce the duty differentials 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  cross-border  shopping  and  intra-EU-
smuggling would require harmonisation of rates and structures. However the Council has rejected this 
approach  and  has  adopted  a  system  of  minimum  rates.  Minimum  rates  provide  a  "safety  net"  for 

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Member States by ensuring that other Member States 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 particular, by cross-border 
shopping and smuggling.  

In order to reduce the cross border flows, the gap between the cheapest and most expensive 
cigarettes in the EU should be reduced. However taking account of the geographical spread of 
the enlarged EU, this would only solve a part of the problem. There are significant differences 
in the level of excise duties between the EU Member States that have or had derogations to 
the  current  minimum  rates  and  the  other  Member  States,  but  also  in-between  the  EU-15  as 
well as in between the new Member States. 

Consequently the impact on the Internal market should be examined from two angles: 

–  reducing the gap between the cheapest and most expensive cigarettes in the EU;  

–  reducing  the  gap  at  regional  level,  taking  into  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 average level in the EU-15. As a balanced approach they should be close to 
the  average  excise  level  in  the  EU-27,  which  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  (2003/54/EC)  recommends  in  Article  7  that  Member 
States should adopt and implement appropriate price measures on tobacco products so as to discourage 
tobacco  consumption.  Additionally,  the  Community  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).  Regulatory  measures  are  complemented  with  other 
initiatives such as prevention campaigns.  

Moreover,  these  health  policy  considerations  have  become  more  important  recently.  In  2005,  the 
European  Community  became  Party  to  the  World  Health  Organization’s  Framework  Convention  on 
Tobacco Control (FCTC). Article 6 of the FCTC recommends 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"  (ECTC),  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 cross-border flows, but needs to be adjusted for the 

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illicit  trade  from  third  countries  towards  the  EU.  Consequently  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 consumption over the coming 5 years as well as to contribute to 
a decline of smoking prevalence of 2% per year, 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.  

However, because of the current tax and price differentials, 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 taxation 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  the  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  the  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  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  which  becomes  the  MPPC.  In  addition,  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  forming  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 defined in a comparable and equal way for all Member 
States and should apply to all tobacco products of a particular 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  Member  States  it  falls  within  a  high  price  category. 
Consequently, the MPPC cannot ensure a uniform 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  changes.  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 

17 

   EN 

 
                                                 
Since  the  current  Directives  maintain  the  difference  in  excise  duties  on  cigarettes  and  on  fine-cut 
tobacco,  the  Commission,  upon  request  of  a  number  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  order  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 structure 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 cigarettes 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 but keeps the reference to the price of cigarettes.  

Due to the fact that the minimum requirement consists of two different elements (57%, €64), the above 
mentioned two basic approaches have to be assessed with 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 

18 

   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 rates 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  other  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  taxes  and  prices,  on  the  functioning  of  the  internal 
market, on demand, consumption and health, on industries (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  PRICE  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 specific 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  all  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  option  would  have  no  impact,  since  the  general  taxation 
level as compared to the pre-tax price relatively high, 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 necessary 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 following Member States will be affected:  

Table 4: The effect of applying the minimum of €64 per 10 00 on all cigarettes in 2006 

Member State 

Market  share  below  the 
MPPC % in 2006 

Bulgaria 

Czech Republic 

Estonia 

Greece 

33,28% 

56,13% 

56,05% 

41.21% 

19 

increase 

%-  points 
in 
excise  duty  needed  to 
reach  excise  level  of  the 
MPPC in 2006 

3,04 

0 

3,04 

7,28 

EN 

   EN 

 
Hungary 

Latvia 

Lithuania 

Poland 

Romania  

Slovakia 

Slovenia 

Spain 

37,92% 

27,24% 

54,59% 

88,15% 

No data 

79,21% 

11,32% 

16,05% 

0,56 

1,29 

5,6 

12,43 

No data 

6,21 

0,56 

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  result  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  (or  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 market 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  maintained  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 with 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 Member 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 transitional 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 

20 

   EN 

 
12,00

10,50

s
nt
oi
p
%-

9,00

7,50

6,00

4,50

3,00

1,50

0,00

Option B

Option C

AT

BE

BG

CY

CZ

DK

0,37

0,002

0,50

0,51

1,97

Option D

0,07

Option E

3,04

2,2

0,23

Table 5. 

EE

0,04

3,04

FI

FR

DE

EL

HU

IE

IT

0,0003

0,21

0,02

7,28

0,56

MT

LV

0,09

1,29

LT

0,15

5,60

2,12

LU

0,81

0,71

PT

0,10

NL

1,71

0,78

PL

12,43

10,42

RO

0,00

0,00

0,00

0,00

SK

SI

ES

0,29

0,004

6,21

0,56

1,37

UK

SE

5,02

4,48

4,76

Member State

Option B Option C Option D Option E

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  fell  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 transitional 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 those Member States where they are already high, and 
consequently to avoid an increase in the gap between high and low taxing Member States.  From an 
Internal Market perspective this rule 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 

21 

   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  maintain a  mixed system (ad-valorem and specific) 
Member States would have to set their 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 specific duties) that best suits the requirements of 
their national market. 

5.1.2. The impact on the Internal Market 

As said before, the impact on the Internal market should be examined from two angles: 

–  reducing the gap between the cheapest and most expensive cigarettes in the EU;  

–  reducing  the  gap  at  regional  level,  taking  into  account  the  geographical  spread  of  the 

enlarged EU.  

Option B and B+: the effect of applying the 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  impact  on  the  gap  between  the  cheapest  and  most 
expensive cigarettes in the EU since the excise duty 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  taxing  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 cigarettes 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 

22 

   EN 

 
                                                 
Table 6: TIRSP of cigarettes in the EU-27: 

EU 

lowest 

57% 

€80,72 

59% 

61% 

63% 

65% 

€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  cigarettes  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 since most Member States have increased their excise 
duties on tobacco, inter alia for reasons of health protection. 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 approximation 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 maintaining the current level of approximation between the 
EU-15 Member States as long as the monetary requirement 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 

highest 

€80,72 

€88,04 

€94,14 

€100,24 

€112,44 

€124,64 

€335 

€335 

€335 

€335 

€335 

€335 

(Only brands with a national market share of more than 2,5% are taken into account) 

EN 

23 

   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  instrument  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 are significantly below the EU level (e.g. Ukraine, 
Moldova, and Russia). Consequently a sudden increase of the monetary minimum requirement would 
probably  increase  the  incentive  for  smuggling  from  these  neighbouring  third  countries,  if  not 
combined with an increase of the 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 little 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 cigarettes 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 average 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  smuggling.  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 view preference should be given to Option C and C+. 

Conclusion 

The standard deviation between WAP of cigarettes 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  instrument  to  achieve  approximation  of  TIRSP  of 
cigarettes in the EU and to improve the 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  price  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 

24 

   EN 

 
Consequently  as  long  as  the  monetary  minimum  requirement  cannot  be  increased  to  a  level,  which 
corresponds at least to the average taxation 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 categories 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 Member 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 specific and an ad-valorem duty, the % of total excise 
duties will be lower on more expensive cigarettes. Consequently 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 the 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 table 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,  taking  into  account  the  flexibility  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  situation  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 applying 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. 

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Applying  the  57%  rule  in  accordance  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 between 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  existing  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  increase  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 changes 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, notwithstanding reductions in demand. However the increase 

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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. This 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 lower level of excise duties on tobacco as compared 
to  its  neighbouring  countries,  has  30%  of  releases  for  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 countries, which reduces the cross border sales to 10%. 
The  theoretical  increase  in  revenue  should  be  adjusted  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 quantity (number of sticks) of year n-1. This data is 
available to tax administrations as a result of the releases for consumption. There would be no need for 
monitoring of the market segments anymore. In addition, 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 reductions 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  duty  differentials  will  lead  to  a  reduction  in  the 
present demand shifts between countries, which will offset part of the adjustments in excise rates. It 
should  also  be  noted  that  the  impact  on  inflation  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:  Bulgaria,  France,  Germany,  Ireland,  Latvia  (Only  Option 
D+), Poland, Spain and UK. All things being equal, Luxembourg would experience a significant rise 

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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 neighbouring countries. Increasing the minimum rate to the level of 63% and more 
would affect the following Member States by 0.3 percentage 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 the 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 measures, protection from exposure to tobacco smoke, 
regulation of the contents, etc. According to the World Bank price increases in tobacco products are 
the most effective single measure that can be taken 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 addition, 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 among 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 the 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.  Consequently  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  takes  into  account  intra  EU  cross-border  flows,  but 
needs to be adjusted for the increase of the illicit trade from third countries towards the EU. Industry 
sources  estimate  currently  that  illicit  trade  from  third  countries  is  around  3.5%  of  total  EU 
consumption. Although no data is available on the evolution of the third country illicit trade over the 

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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 

Belgium 

Cyprus 

Czech Rep. 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Slovak Rep. 

Slovenia 

Spain 

Sweden 

UK 

Bulgaria 

Romania 

7.762.472 

2.421.679 

5.078.000 

54.810.412 

95.826.690 

34.408.444 

14.184.287 

5.419.638 

15.358.733 

14.314.440 

2.017.325 

19.096.775 

7.156.722 

2.294.900 

4.923.954 

15.062.233 

14.286.561 

1.985.432 

25.613.577 

7.872.682 

2.239.173 

4.798.725 

14.463.704 

13.634.112 

13.280.238 

13.384.484 

1.655.603 

1.921.873 

22.459.838 

26.231.340 

8.177.705 

2.189.850 

4.929.521 

80.529.400 

69.647.800 

54.924.400 

145.152.720 

132.603.170 

111.716.210 

31.987.518 

18.319.609 

7.015.555 

32.369.492 

19.435.456 

6.294.855 

35.185.190 

13.853.849 

5.330.593 

105.215.836 

101.581.626 

98.846.737 

92.822.302 

3.787.340 

4.979.270 

5.780.790 

596.247 

17.024.215 

82.047.368 

17.924.867 

4.989.533 

4.794.979 

90.615.611 

7.656.792 

56.088.000 

22.612.855 

 na 

3.994.500 

3.666.203 

5.610.803 

576.900 

17.080.472 

80.244.262 

19.623.143 

2.997.609 

4.611.836 

92.333.287 

7.482.187 

53.952.287 

26.245.083 

 na 

5.062.364 

2.957.084 

6.374.169 

565.376 

14.999.591 

75.283.084 

18.069.016 

4.564.499 

4.487.482 

4.197.236 

3.721.841 

5.309.000 

589.151 

13.654.000 

87.553.826 

17.134.790 

9.410.743 

4.556.764 

93.261.002 

92.699.536 

7.281.953 

52.620.073 

23.043.814 

6.859.511 

50.503.000 

20.596.677 

 na 

36.490.906 

13.883.290 

13.705.663 

1.888.343 

28.262.528 

8.215.985 

2.277.728 

4.986.000 

55.772.177 

93.465.500 

33.383.128 

15.810.596 

5.857.276 

93.807.356 

4.753.872 

5.216.700 

4.745.000 

578.686 

13.963.000 

79.769.525 

18.963.003 

4.786.986 

4.947.442 

91.834.325 

7.674.016 

49.011.000 

14.836.821 

32.452.729 

Total EU 15 

606.745.153 

580.599.323 

539.813.976 

508.952.517 

509.266.719 

Total EU 12 
(excl RO) 

Total EU 27 
(excl RO) 

165.536.201 

171.610.031 

156.122.843 

175.385.417 

163.129.227 

772.281.353 

752.209.353 

695.936.819 

684.337.934 

672.395.947 

-10% 

-4% 

-6% 

48% 

15% 

-1% 

1% 

-31% 

-36% 

4% 

-14% 

-17% 

-11% 

26% 

5% 

-18% 

-3% 

-18% 

-3% 

6% 

-4% 

3% 

1% 

0% 

-13% 

-34% 

-11% 

-16% 

-1% 

-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 cigarettes 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  increase  in  excise  duties  has  not  entailed  a  similar 
decrease  in  releases  for  consumption  compared  to  the  EU-15.  This  is  mainly  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, 

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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 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. With a view to attaining 
this  objective,  the  EU  minimum  requirements  (which  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  yield  in  the  EU-27  will  be  around  €94  when  all  new 
member  States  have  reached  the  current  minima,  this  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 requirement to €90 would result in an increase of 
around 40% of the lowest TIRSP and would entail a potential 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 for 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 account of the purchasing power in all Member States 
and, if increased, would be a tool to reduce cigarette consumption and demand.  

Theoretically, an increase of the 57% rule to 65% would entail a price increase by more than 25% and 
consequently,  taking  into  account  a  price  elasticity  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 Member 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 Internal Market. Consequently the impact in practice 
would be moderated (see table 10.c in annex).  

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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 the 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  national  rates  above  the  monetary  or  proportional  EU 
minimum  requirements,  the  real  impact  on  current  demand  would  be  moderated.  Consequently,  in 
order to trigger an decrease of 10% in consumption 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 

15,5% 
8,3% 
36,0% 
18,3% 
31,0% 
6,2% 
28,2% 
6,2% 
0,0% 
0,0% 
21,2% 
30,1% 
0,0% 
18,8% 
28,9% 
32,9% 
25,4% 
8,1% 
9,9% 
46,8% 
8,9% 
35,8% 
22,7% 
17,9% 

6,6 
3,6 
15,5 
7,9 
13,3 
2,7 
12,1 
2,7 
0,0 
0,0 
9,1 
13,0 
0,0 
8,1 
12,4 
14,1 
10,9 
3,5 
4,3 
20,1 
3,8 
15,4 
9,8 
7,7 

15,5% 
8,3% 
49,1% 
18,3% 
42,6% 
6,2% 
39,7% 
6,2% 
0,0% 
0,0% 
31,3% 
41,8% 
0,0% 
18,8% 
41,0% 
44,9% 
25,4% 
8,1% 
9,9% 
61,4% 
13,0% 
48,2% 
33,1% 
28,1% 

6,6 
3,6 
21,1 
7,9 
18,3 
2,7 
17,0 
2,7 
0,0 
0,0 
13,5 
18,0 
0,0 
8,1 
17,6 
19,3 
10,9 
3,5 
4,3 
26,4 
5,6 
20,7 
14,2 
12,1 

15,5% 
8,3% 
36,0% 
18,3% 
31,0% 
6,2% 
28,2% 
6,2% 
0,0% 
0,0% 
32,2% 
30,1% 
0,0% 
18,8% 
28,9% 
32,9% 
25,4% 
10,0% 
9,9% 
46,8% 
21,3% 
35,8% 
31,7% 
17,9% 

6,6 
3,6 
15,5 
7,9 
13,3 
2,7 
12,1 
2,7 
0,0 
0,0 
13,8 
13,0 
0,0 
8,1 
12,4 
14,1 
10,9 
4,3 
4,3 
20,1 
9,2 
15,4 
13,6 
7,7 

15,5% 
8,3% 
49,1% 
18,3% 
42,6% 
6,2% 
39,7% 
6,2% 
0,0% 
0,0% 
32,2% 
41,8% 
0,0% 
18,8% 
41,0% 
44,9% 
25,4% 
10,0% 
9,9% 
61,4% 
21,3% 
48,2% 
33,1% 
28,1% 

6,6 
3,6 
21,1 
7,9 
18,3 
2,7 
17,0 
2,7 
0,0 
0,0 
13,8 
18,0 
0,0 
8,1 
17,6 
19,3 
10,9 
4,3 
4,3 
26,4 
9,2 
20,7 
14,2 
12,1 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV  
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 

EN 

31 

   EN 

 
 
 
SE 
UK  

9,8% 
0,0% 

4,2 
0,0 

9,8% 
0,0% 

4,2 
0,0 

9,8% 
0,0% 

4,2 
0,0 

9,8% 
0,0% 

4,2 
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 national 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  cigarettes,  also  by  those  Member  States  which  already 
have a high level of taxation. 

5.2.1.3.4 The relation between prices of cigarettes 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  minimum  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 than 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  more  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 
2008 

2006 

€100 on all/63% on WAP 
2008 

2006 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech R 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 

157 
146 
76 
115 
150 
147 
136 
143 
114 
132 
170 
120 
112 
129 
115 
114 
361 
100 
157 
110 
118 

169 
156 
89 
122 
167 
154 
158 
155 
121 
142 
187 
131 
121 
137 
136 
133 
399 
108 
170 
126 
125 

169 
156 
81 
122 
154 
154 
145 
155 
121 
142 
175 
120 
121 
137 
125 
122 
399 
108 
170 
114 
124 

157 
146 
70 
115 
137 
147 
125 
143 
114 
132 
159 
110 
112 
129 
105 
104 
361 
100 
157 
100 
117 

32 

EN 

   EN 

 
 
 
Slovakia 
Slovenia 
Spain 
Sweden 
UK 
Average 

128 
158 
195 
139 
86 
140 

149 
177 
207 
150 
92 
153 

117 
146 
180 
139 
86 
135 

137 
163 
190 
150 
92 
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  further  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
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). 

4  (100).  In  addition  the  average  TIRSP  of  the 

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 the best means, as it creates a European "tax floor" 
for cheaper market segments. This can not be achieved by applying the monetary minimum on WAP.  

Conclusion: 

From a health perspective an increase to €90 on  all/63% on WAP would create 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  States.  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  cigarettes,  also  by  those  Member  States  which  already 
have  a  high  level  of  taxation.  Apart  from  BG  and  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 taxed 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 contribute 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  which  undermines  the  functioning  of  the  internal 
market as well as the EU and its Member States' health policy. Third country smuggling is a simple 
circumvention  of  customs  controls  by  fraudsters  who  smuggle  products  by  various  methods 
(concealment, false description and false declaration etc.) from third countries where prices and taxes 
are low.  

EN 

33 

   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  third  country  smuggling  the  excise  duties  are  often  kept 
low.  As  a  result  these  Member  States  attract  cross-border  shopping  and  illicit  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 responsibility 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  the  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 Members States signed an Anti-Contraband and Anti-
Counterfeit  Agreement  with  Philip  Morris  International;  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 agreements introduce tighter controls on the distribution 
of tobacco products and introduce tracking and tracing systems to help law enforcement agencies to 
identify the origin of smuggled products. The terms of cooperation with other tobacco companies (IT, 
BAT) are under negotiation. 

In  addition,  the  European  Anti-Fraud  Office  (OLAF)  is  in  the  process  of  placing  overseas  liaison 
officers  in  “tobacco  hotspots”  to  facilitate  its  work  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  the  production  index  of  tobacco  products,  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 

150

140

130

120

110

100

90

80

70

150

140

130

120

110

100

90

80

70

1995

1997

1999

2001

2003

2005

1995

1997

1999

2001

2003

2005

Food products, beverages and tobacco

Food products, beverages and tobacco

Manufacture of tobacco products

Manufacture of tobacco products

150

140

130

120

110

100

90

80

70

1995

1997

1999

2001

2003

2005

Food products, beverages and tobacco

Manufacture of tobacco products

EN 

34 

   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  tobacco  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-valorem or on the specific element, depends on the 
policy objective pursued.  

Ad-valorem  duties  increase  absolute  price  differences  and  consequently  promote  cheaper  brands  of 
cigarettes.  In  the  past  ad-valorem  duties  were  applied  to  favour cheaper  local  cigarettes  above  more 
expensive international brands. However, nowadays ad-valorem duties are mainly attractive for those 
Member States where there is a greater 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  minimise  the  variability  of  prices,  the  ad-valorem 
component underscores those differences, which can 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  share  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 specific 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 tobacco 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 Greece, France and Malta for cigarettes and Finland, 
Greece and Italy for fine-cut tobacco) a 100% specific 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 excise 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. Consequently from an internal market, budgetary 

EN 

35 

   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  greater  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 Member 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  increase  the  excise  duties  on  value-for-money 
and/or premium cigarettes. Albeit that without increases the impact in most Member States would be 
minor. In case of subsequent increases of the 57%, it would stepwise transform into a pure ad-valorem 
duty. This effect will be higher in Member States with more specific duties as compared to Member 
States  that  rely  more  on  ad-valorem  duties.  Consequently  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 cigarettes in the Internal Market and therefore cannot 
be justified neither from an internal market 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  consequences  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  tobacco.  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  

effect 

Direct 
on 
excise  duties  and 
without 
prices 
in 
increases 
minimum rates. 

Increases 
slightly 
the  excise  duties 
and  prices  in  upper 
market  segments  in 
11 Member States.  

Increase 
slightly 
the  excise  duties 
and 
in 
prices 
market 
cheaper 
segments 
9 
in 
Member States.  

Does  not  lead  to 
changes. 
major 
Neutral 
towards 
price categories. 

It  is  likely  to  affect 
only  4  Member 
States. 

Neutral 
price categories. 

towards 

Option B+ and D+ 

Option C+ and E+ 

EN 

36 

   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 

Reducing the gap 
between the 
cheapest and most 
expensive cigarettes 
in the EU 

Reducing the gap at 
regional level, 
taking into account 
the geographical 
spread of the 
enlarged EU.  

Minimum 
level 
close to average EU 

Option B+ and D+ 

Option C+ and E+ 

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.  

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 

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  the  objectives  of  creating  more  transparency 

and simplification. 

Option B+ and D+ 

Option C+ and E+ 

Creation  of  a  level 
playing field 

Yes 

Simplification and 
transparency  

Yes 

No 
increase 
administrative 
costs 
industry 

for 

of 

Yes 

the 

Yes 

Yes 

Yes 

6.5 Comparing the other economic impacts  

Impact on: 

Option B+ 

Option C+ 

Option D+ 

Option E+ 

Direct 
impact  

budgetary 

€ 934.466.000 
59% 
61%  € 2.135.643.000
63%  € 3.288.237.000
65%  € 4.070.068.000

€ 1.165.273.000 
€2.429.977.000
€3.727.456.000

€70 
€80  
€90  
€100  € 5.209.014.000 

€ 831.035.000  
59% 
61%  € 1.980.855.000 
63%  € 2.987.650.000 
65%  € 3.796.497.000 

€ 886.295.000
€70 
€2.319.773.000
€80  
€90  
€4.546.278.000
€100  € 5.130.658.000

EN 

37 

   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 
tax 
the 
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 

A minimum tax 
floor (cheaper 
cigarettes) 

Spread of the 
impact on demand 
in the EU 

Affect 
upper markets 

mainly 

Increase 
of 
lowest TIRSP  

the 

Neutral 
price categories 

towards 

Neutral 
price categories 

towards 

No  

Yes  

No 

No 

Almost  no  impact 
on  (new)  Member 
States  where  pre-
are 
prices 
tax 
relatively low 

Almost  no  impact 
on  most  of  EU-15 
Member States  

Almost  no  impact 
on  (new)  Member 
States  where  pre-
are 
prices 
tax 
relatively low 

Almost  no  impact 
on  most  of  EU-15 
Member States 

Reduction 
demand of 10% 

of 

No 

No 

No 

No 

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 way for further increases of excise duties on 
cigarettes, also by those Member States which already have a high level of taxation. 

Relation  with  local 
purchasing power 

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 

38 

   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 fine 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  

EU-27 

2002 

2003 

2004 

2005 

2006 

2002/2006

(kg) 

Austria 

Belgium 

Cyprus 

Czech Republic** 

Denmark 

Estonia 

Finland 

France 

Germany* 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Slovak Republic 

Slovenia 

Spain 

Sweden 

UK 

Bulgaria 

Romania 
Total EU 15 
Total EU 12  
(excl LT, RO) 
Total EU 27 
(excl LT, RO) 

259.000 

272.000 

298.000 

396.000 

8.417.000 

8.327.000 

8.429.000 

8.180.707 

62.000 

629.400 

902.200 

8.000 

949.000 

97.000 

650.400 

855.200 

8.000 

931.000 

152.000 

190.300 

675.300 

10.000 

880.000 

170.518 

423.300 

577.000 

12.680 

883.000 

5.720.900 

5.980.000 

6.969.500 

7.008.800 

14.441.300 

14.834.100 

15.400.000 

14.700.900 

800.700 

757.701 

135.568 

285.520 

6.700 

na 

819.000 

1.159.668 

111.904 

324.510 

7.500 

57.151 

964.000 

1.038.884 

1.027.501 

112.320 

463.255 

8.200 

14.306 

895.180 

95.972 

593.460 

14.000 

11.500 

3.194.000 

2.983.000 

3.006.000 

2.970.423 

19.060 

19.850 

27.170 

30.850 

422.900 

9.425.583 

192.799 

481.957 

552.000 

10.680 

796.000 

7.107.073 

18.747.400 

1.247.809 

739.374 

107.264 

677.589 

18.500 

12.718 

2.845.418 

27.290 

13.130.839 

12.943.061 

12.087.666 

10.970.000 

10.811.000 

1.060.000 

1.727.000 

302.830 

33.527 

30.445 

287.370 

19.837 

28.392 

2.583.000 

326.450 

24.000 

26.642 

828.000 

391.470 

13.000 

16.040 

1.275.416 

1.785.347 

2.254.601 

2.684.910 

886.000 

825.000 

909.000 

966.000 

2.864.039 

2.893.447 

3.052.281 

3.189.180 

500 

na 

700 

na 

1.300 

na 

2.000 

na 

496.000 

358.480 

26.000 

19.120 

2.612.660 

800.000 

3.453.780 

8.300 

na 

53.564.312 

54.171.938 

55.827.374 

54.646.706 

59.964.956 

2.607.333 

3.718.347 

4.050.113 

2.405.568 

2.020.020 

56.171.645 

57.890.285 

59.877.486 

57.052.274 

61.984.976 

63% 

12% 

211% 

-23% 

-39% 

34% 

-16% 

24% 

30% 

56% 

-2% 

-21% 

137% 

176% 

na 

-11% 

43% 

-18% 

-53% 

18% 

-22% 

-37% 

105% 

-10% 

21% 

1560% 

na 
12%

-23%

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 tobacco and fine-cut tobacco together.  

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39 

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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 Member States there is no significant tax differential as 
compared to cigarettes. 

Data collection 

Because the market for fine-cut tobacco is relatively 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  tax  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 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-cut tobacco increased by around 10% in the same 
period. The lower levels of excise duties in a number 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  the  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  protection  purposes.  In  addition,  it  will  maintain  cross-
border shopping which imposes external costs 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  characteristics.  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 two products, it seems reasonable that the minimum 
rates for fine-cut tobacco should be fixed at about two 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 the two products and the relatively labour-intensive 
process of manufacturing fine-cut tobacco. This ratio is widely accepted by the stakeholders. 

7 
8 

9 

10 

The most recent available WAP date from 2004 (the 2005 KPMG study). 
Data  on  2007  from  ESTA  (European  Smoking  Tobacco  Association).  As  for  cigarettes,  no 
representative data is available for Romania. 
The cross-price elasticity will depend inter alia on non-quantifiable factors such as such as traditions, 
culture, fashion, social environment which differ from 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. 
COM(2001) 133 final, 14.03.2001 

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40 

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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  difference  in  excise  duties  on  cigarettes  and  on  fine-cut 
tobacco,  the  Commission,  upon  request  of  a  number  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  order  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 structure 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  taxation  on  fine  cut,  there  is  no  monetary  minimum 
requirement such as there is for cigarettes. As a result, 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  structure  of  the  minimum  requirements  for  fine-cut 
tobacco with those for cigarettes, this impact assessment examines the introduction of a combination 
of a proportional minimum and a monetary minimum for fine-cut 

Table  12.a  in  annex  contains  a  simulation  of  the  impact  of  these  options  on  the  level  of  taxation  in 
those Member States where fine-cut tobacco has a reasonable 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  perspective.  Again,  as  for  cigarettes,  from  a  health 
perspective a high specific minimum duty is also the best means to ensure a minimum price and tax 
level of the cheaper market segments.  

Consequently, the introduction of a compulsory monetary 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  the  excise  structure  for  fine-cut  smoking  tobacco 
intended  for  the  rolling  of  cigarettes  (specific  or  ad  valorem  or  mixed).  For  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 majority of stakeholders are opposed to any restriction 
of the current flexibility in the field of fine-cut tobacco. 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 cigarettes are set by way of overall minimum requirements, 
the alignment of taxation on cigarettes 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 

41 

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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 thirds of the minimum rates for cigarettes. 

On the one hand, 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. 

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 hand-rolled cigarettes (ISO norm 15592-3) refers to 
0.4 and 0.75 gram of tobacco per hand-rolled cigarette. 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  (the  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  equivalent  to  the  filter  has  to  be  considered. 
Consequently the weight of 1kg smoking tobacco would 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 minimum 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  these  products,  often  called  "volume  tobacco",  contain 
expanded tobacco, have a relatively small market share 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  absolute  minimum  a  2:3 
relationship  between  minimum  rates  for  fine  cut  tobacco  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  following  analysis  will  consider  the  impact  of  two 
hypotheses, namely 1000 and 1333 sticks. 

7.1.2.2 The impact of increases of the monetary 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 cigarettes 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 

42 

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significant for EE, HU, CZ and PL. The main markets 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 rates for cigarettes on 1 January 2007. However as 
these Member States will have to increase the excise duties on cigarettes by the end of the transitional 
periods, it is likely that they will in any case increase 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 above, 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 result in a 2:3 relationship at national level.  

7.1.2.3  The  monetary  minimum  requirement:  the  need  to  take  account  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 rates 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 relationship 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 Member 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 TIRSP 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. 

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43 

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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 the 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 health 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  increases  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 order to trigger a decrease in demand by 10% over the 
coming years the TIRSP should be increased by around 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%.,  taking  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  further  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 should 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 smoking 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 

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44 

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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. Nevertheless, in order to maintain a synergy with the 
minimum requirements for cigarettes, it should be maintained to ensure that the tax incidence on fine 
cut  would  not  decrease  below  2:3  of  cigarettes.  Moreover  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 prices 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  increases  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 aimed 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  States.  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 relationship between fine-cut and cigarettes. 

7.2 Other smoking tobacco (pipe tobacco) and cigars 

This is a small and declining market and even without any increase in the minimum rates at EU level 
will most probably continue to decline. There are no indications 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  health  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  compulsory  monetary  and  proportional  minimum 
requirement. 

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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  should  entail  parallel  increases  for  fine-cut  tobacco. 
Depending  on  the  hypothesis,  applying  the  aforementioned  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 approximately 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 objective 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 order to avoid tax-induced distortions of competition, Member States 
with excise rates for cigarettes far above the EU minima, 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  arrangements  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 stipulate that the Council, acting on a proposal from 
the  Commission,  must  examine  the  structure  and  rates  of  excise  duty  not  less  frequently  than  every 
four  years.  Consequently  monitoring  and  evaluation  of  these  provisions  will  take  place  in  the 
framework of this periodical review.  

However in order to carry out an in-depth examination of the operation of the single market and of the 
rates and structure of excise duties on the different tobacco products, the Commission services need 
information  on  the  quantities  and  prices  of  the  tobacco  products  released  for  consumption  in  the 
Member States. Currently the collection of this information is a cumbersome 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  information  from  all  Member  States  it  is  essential  to  agree 
upon common provisions on pooling and sharing of information on tobacco taxation.  

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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 the 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 

BE 

BG 

CY 

CZ 

DK 

EE 

FI 

FR 

DE  

EL 

HU 

IE 

IT 

LV  

LT 

LU. 

MT 

NL. 

PL 

PT 

SK 

SI 

ES 

SE 

UK  

62,81% 

0,68% 

0% 

47,30% 

60,69% 

62,27% 

69,55% 

0% 

0% 

0% 

0,21% 

53,29% 

2,07% 

0% 

85,04% 

80,52% 

74,63% 

0% 

63,58% 

11,84% 

9,34% 

30,09% 

70,15% 

0% 

70,79% 

0% 

- 

- 

0% 

- 

15,91% 

- 

1,45% 

- 

- 

- 

- 

9,18% 

- 

- 

3,01% 

6,98% 

- 

- 

- 

0% 

- 

16,82% 

1,32% 

- 

- 

0% 

0,37 

0,002 

0 

0,5 

0,51 

1,97 

0,04 

0 

0 

0 

0,0003 

0,21 

0,02 

0 

0,09 

0,15 

0,81 

0 

1,71 

0 

0,1 

0,29 

0,004 

0 

5,02 

0 

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Table  2 
weighted average prices in 2006. 

-  The  effect  of  applying 

the  57%  rule 

in  accordance  with  

(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 

% WAP in 
2006 

%  MPPC 
corrected 
for 
€64 
(only  new 
Member 
States) 
- 
- 
68,13% 
- 
60,87% 
- 
65,16% 
- 
- 
- 
- 
62,02% 
- 
- 
72,14% 
61,56% 
- 
- 
- 
63,46% 
- 
59,31% 
60,45% 
- 
- 
- 

56,93% 
57,80% 
60,78% 
57,01% 
51,40% 
56,77% 
52,29% 
57,79% 
64,30% 
64,86% 
58,88% 
57,64% 
59,73% 
58,27% 
42,17% 
43,02% 
56,43% 
61,24% 
56,39% 
64,02% 
61,24% 
58,88% 
56,27% 
64,51% 
52,80% 
 67,24% 

%  WAP 
corrected 
for 
€64 
(only  new 
Member 
States) 
- 
- 
68,52% 
- 
61,69% 
- 
63,65% 
- 
- 
- 
- 
61,98% 
- 
- 
67,4% 
63,87% 
- 
- 
- 
69,38% 
- 
63,49% 
59,19% 
- 
- 
- 

Difference 
MPPC  and 
WAP 
(percent 
points) 

-1,77 
0,17 
0,39 
-2,04 
0,82 
2,09 
-1,51 
0,41 
0,30 
2,57 
1,38 
-0,04 
-0,60 
-0,22 
-4,74 
2,31 
-0,59 
0,42 
-0,70 
5,92 
0,20 
4,18 
-1,26 
0,22 
3,60 
4,54 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV  
LT 
LU. 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK  

58,7% 
57,63% 
60,34% 
59,05% 
51,27% 
54,68% 
54,05% 
57,38% 
64% 
62,29% 
57,5% 
58,27% 
60,33% 
58,49% 
49,35% 
40,33% 
57,02% 
60,82% 
57,09% 
56,98% 
61,04% 
54,43% 
57,55% 
64,29% 
49,2% 
62,89% 

EN 

48 

   EN 

 
 
Table  3  -  The  effect  of  applying  the  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 

Bulgaria 
CZ Republic 
Estonia 
Greece 
Hungary 
Latvia 
Lithuania 
Poland 
Romania  
Slovakia 
Slovenia 
Spain 

37,5 
38,11 
33,87 
80,5 
51,15 
15,6 
21,9 
42,54 
-no data  
49,03 
54,07 
72,33 

The 
excise 
yield  in  Euro 
on  MPPC 
corrected 
assuming 
that  Member 
States  have 
reached  64€ 
on MPPC 
64 
64 
64 
64 
64 
64 
64 
64 
64 
64 
64 
64 

excise 
in 
on 
in 

The 
yield 
Euro 
WAP 
2006 

36,47 
38,11 
34,96 
69,11 
51,64 
16,82 
21,12 
37,52 
-no data 
46,46 
57,86 
72,76 

The 
excise 
yield  in  Euro 
on 
WAP 
corrected 
assuming 
that  Member 
States  have 
reached  64€ 
on MPPC 
62,62 
63,27 
65,45 
NA 
64,05 
65,99 
62,67 
57,96 
-no data 
61,05 
68,21 
NA 

Difference 
MPPC-  WAP 
in € 

1,38 
0,73 
-1,45 
11,39 
-0,05 
-1,99 
1,33 
6,04 
no-data 
2,95 
-4,21 
-0,43 

EN 

49 

   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) 

MS 

Current 
WAP(corrected 
for new MS) 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV  
LT 
LU. 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK  
Average 
STDEVP 

174,76 
188,59 
91,38 
167,35 
102,55 
197,64 
102,83 
194,11 
238,01 
214,18 
117,37 
103,34 
322,11 
165,10 
97,91 
98,12 
155,47 
175,05 
188,46 
83,56 
138,84 
96,16 
115,25 
112,79 
201,29 
341,62 

160,92 
66,02 

WAP 57% 

WAP 59% 

WAP 61% 

WAP 63% 

WAP 65% 

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  

177,39 
188,60 
91,38 
170,89 
105,14 
216,13 
103,02 
194,11 
238,01 
214,18 
117,38 
104,39 
322,34 
165,10 
98,35 
98,84 
160,07 
175,05 
201,25 
83,56 
139,47 
97,50 
115,27 
112,79 
248,45 
341,62 
164,63 
68,21 

174,89 
188,59 
91,38 
167,63 
105,09 
197,64 
103,02 
194,11 
238,01 
214,18 
117,37 
104,37 
322,11 
165,10 
98,35 
98,84 
157,99 
175,05 
188,46 
83,56 
139,39 
97,50 
115,26 
112,79 
201,29 
341,62 
161,29 
65,79 

177,37 
188,59 
91,38 
170,78 
105,13 
203,05 
103,02 
194,11 
238,01 
214,18 
117,37 
104,38 
322,11 
165,10 
98,35 
98,84 
160,03 
175,05 
197,60 
83,56 
139,47 
97,50 
115,27 
112,79 
214,56 
341,62 
162,66 
66,45 

189,86 
199,96 
91,38 
179,33 
107,37 
230,51 
104,41 
204,30 
238,01 
214,18 
122,07 
105,90 
324,02 
170,08 
98,98 
100,45 
170,51 
175,05 
213,89 
83,56 
141,24 
99,35 
117,43 
112,79 
267,61 
341,62 
169,38 
70,02 

176,84 
188,74 
91,38 
168,81 
107,03 
197,64 
104,38 
194,11 
238,01 
214,18 
122,04 
105,85 
322,11 
169,45 
98,97 
100,37 
163,85 
175,05 
188,46 
83,56 
140,67 
99,35 
117,42 
112,79 
201,29 
341,62 
162,46 
65,32 

206,63 
189,20 
196,87  216,45 
91,38  91,38 
177,22  193,05 
107,35  110,94 
203,73  248,08 
104,41  107,10 
202,46  223,79 
238,01  238,01 
214,18  214,18 
122,06  131,15 
105,89  110,28 
322,11  343,14 
169,99  185,31 
98,98  100,36 
100,45  102,94 
170,35  183,22 
175,05  176,83 
200,22  229,34 
83,56  83,66 
141,22  147,08 
99,35  102,27 
117,42  124,87 
112,79  112,79 
215,26  293,00 
341,62  341,91 
177,61 
165,43 
74,07 
66,50 

177,64 
189,23 
91,38 
172,67 
109,34 
197,64 
106,92 
194,11 
238,01 
214,18 
129,99 
109,85 
322,11 
171,78 
100,06 
102,69 
167,77 
175,05 
188,46 
83,66 
144,69 
102,27 
124,84 
112,79 
201,29 
341,62 
164,23 
64,42 

197,80  226,96 
199,43  238,49 
91,38  91,38 
185,64  209,17 
110,83  116,83 
203,88  273,00 
107,10  111,70 
206,09  247,38 
238,01  238,01 
214,18  216,54 
131,14  142,38 
110,25  117,62 
322,11  375,73 
184,15  203,55 
100,36  102,64 
102,94  107,43 
179,50  198,22 
176,83  190,07 
201,61  249,26 
83,66  84,62 
146,90  159,71 
102,27  106,23 
124,86  136,86 
112,79  112,96 
217,52  325,81 
341,62  345,21 
189,53 
168,96 
80,63 
65,93 

178,03 
189,51 
91,38 
175,34 
112,76 
197,64 
111,25 
194,11 
238,01 
214,18 
134,82 
115,83 
322,11 
171,78 
101,86 
106,71 
169,52 
175,10 
188,46 
84,62 
151,83 
105,28 
135,78 
112,87 
201,29 
341,62 
166,22 
63,23 

200,75 
202,71 
91,38 
191,33 
116,07 
206,74 
111,60 
206,09 
238,01 
214,18 
142,21 
117,44 
322,11 
196,06 
102,49 
107,26 
188,28 
185,14 
203,50 
84,62 
158,10 
106,23 
136,84 
112,96 
219,11 
341,62 
173,19 
64,80 

251,72 
265,53 
91,38 
228,22 
124,75 
307,66 
117,77 
276,54 
246,93 
230,47 
156,19 
127,23 
418,33 
225,75 
106,34 
113,71 
216,17 
208,78 
274,19 
86,29 
175,57 
112,33 
151,80 
117,73 
367,83 
355,25 
205,94 
90,26 

178,07 
189,51 
91,38 
175,34 
117,35 
197,64 
114,50 
194,11 
238,01 
214,18 
139,32 
123,12 
322,11 
171,78 
104,48 
111,37 
170,05 
175,10 
188,46 
86,28 
154,60 
108,40 
145,77 
117,39 
201,29 
341,62 
168,12 
61,88 

201,59 
204,37 
91,38 
196,73 
121,34 
208,45 
117,42 
206,09 
238,01 
214,18 
151,41 
125,85 
322,11 
196,06 
105,70 
113,28 
191,87 
191,64 
205,15 
86,29 
169,40 
112,15 
151,63 
117,63 
219,53 
341,62 
176,96 
63,03 

EN 

50 

EN 

 
  
Table 4.b - Evolution in % of the WAP if an increased 57% rule were applied to all cigarettes (Option B) 

MS 

Current 
WAP 
(corrected 
for  new 
MS  

174,76 
AT 
188,59 
BE 
91,38 
BG 
167,35 
CY 
102,55 
CZ 
197,64 
DK 
102,83 
EE 
194,11 
FI 
238,01 
FR 
214,18 
DE  
117,37 
EL 
103,34 
HU 
322,11 
IE 
165,10 
IT 
97,91 
LV  
98,12 
LT 
155,47 
LU. 
MT 
175,05 
188,46 
NL. 
83,56 
PL 
138,84 
PT 
96,16 
SK 
115,25 
SI 
112,79 
ES 
201,29 
SE 
341,62 
UK  
Average  160,92 

WAP 57% 

WAP 59% 

WAP 61% 

WAP 63% 

WAP 65% 

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  

1,50% 
0,01% 
0,00% 
2,12% 
2,52% 
9,36% 
0,18% 
0,00% 
0,00% 
0,00% 
0,00% 
1,02% 
0,07% 
0,00% 
0,45% 
0,73% 
2,96% 
0,00% 
6,78% 
0,00% 
0,45% 
1,39% 
0,02% 
0,00% 
23,43% 
0,00% 
2,04% 

0,08% 
0,00% 
0,00% 
0,17% 
2,48% 
0,00% 
0,18% 
0,00% 
0,00% 
0,00% 
0,00% 
1,00% 
0,00% 
0,00% 
0,45% 
0,73% 
1,62% 
0,00% 
0,00% 
0,00% 
0,40% 
1,39% 
0,01% 
0,00% 
0,00% 
0,00% 
0,33% 

8,64% 
1,49% 
6,03% 
0,00% 
0,00% 
0,00% 
2,05% 
7,16% 
2,51% 
4,70% 
2,74%  16,63% 
1,54% 
0,18% 
5,25% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
4,00% 
0,00% 
2,48% 
1,01% 
0,59% 
0,00% 
3,02% 
0,00% 
1,09% 
0,45% 
2,37% 
0,73% 
9,67% 
2,94% 
0,00% 
0,00% 
4,85%  13,49% 
0,00% 
0,00% 
1,72% 
0,45% 
3,32% 
1,39% 
1,89% 
0,02% 
0,00% 
0,00% 
6,59%  32,95% 
0,00% 
0,00% 
4,87% 
1,05% 

1,19% 
0,08% 
0,00% 
0,88% 
4,36% 
0,00% 
1,50% 
0,00% 
0,00% 
0,00% 
3,98% 
2,43% 
0,00% 
2,64% 
1,08% 
2,29% 
5,39% 
0,00% 
0,00% 
0,00% 
1,32% 
3,31% 
1,88% 
0,00% 
0,00% 
0,00% 
1,24% 

1,65%  13,18% 
8,27%  18,24% 
5,75% 
0,34% 
4,39%  14,78% 
0,00% 
0,00% 
0,00% 
0,00% 
3,18%  10,93% 
5,90%  15,36% 
8,07% 
6,62% 
4,67% 
8,18% 
3,16% 
0,00% 
3,08%  25,52% 
4,15% 
3,98% 
4,15% 
1,54% 
6,17% 
0,00% 
4,30%  15,29% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
4,00%  11,73%  10,75%  11,73% 
6,70% 
6,72% 
2,47% 
6,30% 
0,00% 
0,00% 
0,00% 
6,53% 
4,05%  11,54% 
2,96%  12,25% 
2,20% 
1,09% 
2,50% 
2,50% 
4,91% 
4,66% 
4,91% 
2,37% 
7,91%  15,46% 
9,57%  17,85% 
1,01% 
0,00% 
0,00% 
1,01% 
6,98% 
0,00% 
6,24%  21,69% 
0,12% 
0,12% 
0,12% 
0,00% 
5,80% 
4,21% 
5,93% 
1,71% 
6,35% 
6,35% 
6,35% 
3,31% 
8,34% 
8,32% 
8,35% 
1,88% 
0,00% 
0,00% 
0,00% 
0,00% 
8,06% 
0,00% 
6,94%  45,56% 
0,00% 
0,00% 
0,08% 
0,00% 
5,42% 
2,72% 
9,74% 
2,87% 

1,87%  14,87% 
29,87% 
7,49% 
0,49% 
26,46% 
0,00% 
0,00% 
0,00% 
4,78%  14,33% 
24,99% 
9,95%  13,18% 
13,93% 
4,61% 
0,00% 
38,13% 
8,53% 
8,19% 
8,62% 
6,17% 
0,00% 
27,44% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
1,10% 
21,31%  14,86%  21,16% 
13,83%  12,09%  13,65% 
0,00% 
16,65% 
0,00% 
4,05%  18,76% 
23,29% 
4,03% 
4,83% 
4,68% 
9,31% 
8,75% 
9,49% 
9,04%  21,11% 
27,50% 
5,77% 
0,03% 
8,58% 
7,98% 
0,00% 
32,26% 
1,28% 
1,28% 
1,28% 
9,35%  13,87% 
15,03% 
10,48% 
9,48%  10,48% 
18,76%  17,82%  18,74% 
0,14% 
0,07% 
0,14% 
8,85% 
0,00% 
61,86% 
0,00% 
0,00% 
1,05% 
8,65% 
16,80%  4,47% 

15,36% 
1,89% 
44,04% 
8,37% 
0,49% 
40,80% 
0,00% 
0,00% 
0,00% 
17,56% 
36,38% 
4,78% 
18,32% 
21,65%  14,43% 
5,47% 
55,67% 
0,00% 
14,19% 
14,53%  11,35% 
6,17% 
0,00% 
42,46% 
0,00% 
0,00% 
3,75% 
0,00% 
7,60% 
0,00% 
29,00% 
33,07%  18,70% 
21,79% 
23,13%  19,15% 
0,00% 
0,00% 
29,87% 
18,76% 
4,05% 
36,74% 
7,95% 
8,60% 
6,71% 
15,45% 
15,88%  13,50% 
23,42% 
9,38% 
39,04% 
9,48% 
0,03% 
19,27% 
8,85% 
0,00% 
45,49% 
3,27% 
3,27% 
3,27% 
22,01% 
26,45%  11,35% 
16,63% 
16,81%  12,73% 
31,57% 
31,71%  26,48% 
4,29% 
4,07% 
4,38% 
9,06% 
0,00% 
82,74% 
0,00% 
3,99% 
0,00% 
6,24%  11,81% 
26,44% 

EN 

51 

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 

AT 

BE 

BG 

CY 

CZ 

DK 

EE 
FI 

FR 

DE  

EL 

HU 

IE 

IT 
LV  

LT 

LU. 

MT 

NL. 

PL 

PT 

SK 

SI 

ES 

SE 

UK  

Market share 
under 59% 

Market share 
under 61% 

Market share 
under 63% 

Market share 
under 65% 

94,74% 

82,46% 

0% 

64,77% 

25,03% 

62,59% 

23,92% 

100%% 

0% 

0% 

66,79% 

20,28% 

17,55% 

100% 

7,01% 

22,87% 

94,40% 

0% 

74,55% 

0,10% 

16,02% 

18,24% 

40,01% 

0% 

74,79% 

0% 

99,95% 

100% 

0% 

100% 

43,87% 

68,43% 

24,17% 

100% 

0% 

0% 

81,69% 

53,29% 

87,05% 

100% 

14,35% 

22,99% 

96,88% 

47,40% 

80,41% 

2,18% 

46,46% 

29,86% 

90,80% 

0% 

88,50% 

1,67 

100% 

100% 

0% 

100% 

49,04% 

90,60% 

42,59% 

100% 

0% 

13,55% 

85,96% 

62,30% 

100% 

100% 

20,86% 

45,41% 

99,04% 

96,52% 

89,74% 

11,53% 

81,56% 

32,64% 

99,97% 

18,75% 

92,23% 

20,53% 

100% 

100% 

0% 

100% 

61,56% 

92,49% 

43,95% 

100% 

100% 

65,48% 

85,96% 

66,81% 

100% 

100% 

34,93% 

54,10% 

99,05% 

96,52% 

95,23% 

12,45% 

87,37% 

47,39% 

100% 

76,26% 

93,19% 

34,26% 

EN 

52 

EN 

 
  
Table 5.a - Evolution of the WAP if an increased €64 rule were applied to all cigarettes (Option C) 

MS 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV  
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK  

Average 
STDEVP 

EN 

Current  WAP 
(corrected  for 
new MS) 

€70 

€75  

€80  

€90  

€100  

174,76 
188,59 
91,38 
167,35 
102,55 
197,64 
102,83 
194,11 
238,01 
214,18 
117,37 
103,34 
322,11 
165,10 
97,91 
98,12 
155,47 
175,05 
188,46 
83,56 
138,84 
96,16 
115,25 
112,79 
201,29 
341,62 
160,92 
66,02 

174,76 
188,59 
100,24 
167,35 
111,05 
197,64 
108,99 
194,11 
238,01 
214,18 
125,46 
110,74 
322,11 
165,10 
102,93 
106,80 
155,47 

175,05 
188,46 
98,24 
138,84 
106,81 
118,99 
115,30 
201,29 
341,62 

164,16 
63,05 

174,76 
188,59 
106,24 
167,35 
116,54 
197,64 
114,16 
194,11 
238,01 
214,18 
128,54 
116,48 
322,11 
165,10 
108,55 
112,67 
155,47 

175,05 
188,46 
104,33 
138,84 
112,76 
123,59 
118,58 
201,29 
341,62 

166,35 
61,13 

174,76 
188,59 
112,24 
167,35 
122,47 
197,64 
120,00 
194,11 
238,01 
214,18 
131,77 
122,48 
322,11 
165,10 
114,44 
118,57 
156,15 

175,05 
188,46 
110,43 
138,84 
118,71 
129,41 
122,94 
201,29 
341,62 

168,72 
59,15 

174,94 
188,59 
124,24 
169,37 
134,37 
197,64 
131,80 
194,11 
238,01 
214,18 
142,27 
134,48 
322,11 
165,10 
126,24 
130,37 
160,95 

175,05 
188,46 
122,63 
144,87 
130,62 
141,40 
133,02 
201,29 
341,62 

174,14 
55,07 

177,36 
189,23 
136,24 
174,54 
146,27 
197,64 
143,60 
194,11 
238,01 
214,18 
154,15 
146,48 
322,11 
170,65 
138,04 
142,17 
169,66 

175,05 
188,46 
134,83 
156,95 
142,52 
153,40 
144,47 
201,29 
341,62 

180,50 
50,96 

53 

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  

174,76 

188,59 

91,38 

167,35 

102,55 

197,64 

102,83 

194,11 

238,01 

214,18 

117,37 

103,34 

322,11 

165,10 

97,91 

98,12 

155,47 

175,05 

188,46 

83,56 

138,84 

96,16 

115,25 

112,79 

201,29 

341,62 
160,92 

AT 

BE 

BG 

CY 

CZ 

DK 

EE 

FI 

FR 

DE 

EL 

HU 

IE 

IT 

LV  

LT 

LU 

MT 

NL. 

PL 

PT 

SK 

SI 

ES 

SE 

UK  

Average 

EN 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,10% 

0,00% 

9,69%  16,26%  22,83% 

35,96% 

0,00% 

0,00% 

0,00% 

1,21% 

8,29%  13,64%  19,42% 

31,02% 

0,00% 

0,00% 

0,00% 

0,00% 

5,99%  11,01%  16,70% 

28,17% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

6,89% 

9,52%  12,26% 

21,21% 

7,16%  12,72%  18,53% 

30,14% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

5,12%  10,87%  16,89% 

28,94% 

8,85%  14,83%  20,84% 

32,86% 

0,00% 

0,00% 

0,44% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

3,52% 

0,00% 

0,00% 

17,57%  24,87%  32,17% 

46,77% 

0,00% 

0,00% 

0,00% 

4,34% 

11,08%  17,27%  23,45% 

35,83% 

3,25% 

7,24%  12,28% 

22,69% 

2,22% 

5,13% 

8,99% 

17,93% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

3,31% 

5,51% 

7,88% 

13,10% 

1,49% 

0,34% 

49,09% 

4,30% 

42,63% 

0,00% 

39,65% 

0,00% 

0,00% 

0,00% 

31,33% 

41,75% 

0,00% 

3,37% 

40,99% 

44,89% 

9,13% 

0,00% 

0,00% 

61,37% 

13,04% 

48,21% 

33,10% 

28,08% 

0,00% 

0,00% 
18,95% 

54 

EN 

 
  
Table 5.c - The market share affected by increasing the minimum of €64 per 1000 on all cigarettes 

MS 

AT 

BE 

BG 

CY 

CZ 

DK 

EE 

FI 

FR 

DE  

EL 

HU 

IE 

IT 

LV  

LT 
LU 

MT 

NL. 

PL 

PT 

SK 

SI 

ES 

SE 

UK  

EN 

Market share 
under €70 

Market share  
under €75 

Market share 
under €80 

Market share 
under €90 

Market share 
under €100 

0 

0 

100% 

0 

85,80% 

0 

0 

0 

100% 

0 

98,35% 

0 

0 

0 

100% 

0 

99,94% 

0 

76,08% 

98,55% 

99,94% 

0 

0 

0 

51,64% 

91,54% 

0 

0 

85,75% 

98,93% 
0 

0 

0 

99,90% 

0 

100% 

68,88% 

25,53% 

0 

0 

0 

0 

0 

51,92% 

99,29% 

0 

0 

98,03% 

100% 
0 

0 

0 

100% 

0 

100% 

86,70% 

63,92% 

0 

0 

0 

0 

0 

55,85% 

99,99% 

0 

0 

100% 

100% 
17,31% 

0 

0 

100% 

0 

100% 

99,82% 

81,02% 

0 

0 

5,26% 

0 

100% 

35,30% 

99,99% 

0 

100% 

0 

0 

0 

99,06% 

99,99% 

0 

0 

100% 

100% 
65,65% 

0 

0 

100% 

98,79% 

100% 

99,98% 

98,06% 

0 

0 

59,27% 

22,78% 

100% 

56,83 

100% 

0 

100% 

0 

0 
0 

99,99% 

99,99% 

0 

94,11% 

100% 

100% 

98,73% 

0 

0 

100% 

100% 

100% 

99,98% 

99,25% 

0 

0 

55 

EN 

 
  
Table 6.a – Evolution of the WAP if an increased 57% rule were applied on WAP (Option D) 

MS 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV  
LT 
LU 
MT 
NL 
PL 
PT 
SK 
SI 
ES 
SE 
UK  
Av 
STDEVP 

Current 
WAP 
corrected 
for

new
174,76 
188,59 
91,38 
167,35 
102,55 
197,64 
102,83 
194,11 
238,01 
214,18 
117,37 
103,34 
322,11 
165,10 
97,91 
98,12 
155,47 
175,05 
188,46 
83,56 
138,84 
96,16 
115,25 
112,79 
201,29 
341,62 

160,92 
66,02 

without 
capping 

57% 
capping 
€101  

capping 
€122  

without 
capping 

59% 
capping 
€101 

61% 

63% 

65% 

capping 
€122  

without 
capping 

capping 
€101  

capping 
€122  

without 
capping 

capping 
€101  

capping 
€122  

without 
capping 

capping 
€101  

capping 
€122  

175,24 
188,59 
91,38 
167,35 
102,55 
199,60 
102,83 
194,11 
238,01 
214,18 
117,37 
103,34 
322,11 
165,10 
97,91 
98,12 
158,43 
175,05 
192,74 
83,56 
138,84 
96,16 
115,25 
112,79 
238,02 
341,62 
162,70 
67,35 

175,24 
188,59 
91,38 
167,35 
102,55 
197,64 
102,83 
194,11 
238,01 
214,18 
117,37 
103,34 
322,11 
165,10 
97,91 
98,12 
158,43 
175,05 
188,46 
83,56 
138,84 
96,16 
115,25 
112,79 
201,29 
341,62 
161,05 
66,01 

175,24 
188,59 
91,38 
167,35 
102,55 
199,60 
102,83 
194,11 
238,01 
214,18 
117,37 
103,34 
322,11 
165,10 
97,91 
98,12 
158,43 
175,05 
192,74 
83,56 
138,84 
96,16 
115,25 
112,79 
220,93 
341,62 
162,04 
66,69 

189,64 
198,14 
91,38 
179,24 
102,55 
218,61 
102,83 
204,30 
238,01 
214,18 
117,95 
103,34 
322,11 
170,08 
97,91 
98,12 
169,76 
175,05 
208,14 
83,56 
138,84 
96,16 
115,25 
112,79 
260,68 
341,62 
167,32 
69,73 

176,58 
188,59 
91,38 
173,78 
102,55 
197,64 
102,83 
194,11 
238,01 
214,18 
117,95 
103,34 
322,11 
170,08 
97,91 
98,12 
169,76 
175,05 
188,46 
83,56 
138,84 
96,16 
115,25 
112,79 
201,29 
341,62 
162,00 
66,08 

189,64  206,63 
198,14  216,45 
91,38  91,38 
179,24  193,05 
102,55  102,55 
209,88  241,62 
102,83  102,83 
204,30  223,79 
238,01  238,01 
214,18  214,18 
117,95  128,19 
103,34  103,34 
322,11  341,01 
170,08  185,31 
97,91  97,91 
98,12  98,12 
169,76  182,84 
175,05  175,05 
207,19  226,22 
83,56  83,56 
138,84  138,84 
96,16  96,16 
115,25  124,61 
112,79  112,79 
220,93  288,12 
341,62  341,62 
175,16 
165,42 
74,73 
67,82 

176,58 
188,59 
91,38 
173,78 
102,55 
197,64 
102,83 
194,11 
238,01 
214,18 
128,19 
103,34 
322,11 
170,86 
97,91 
98,12 
170,73 
175,05 
188,46 
83,56 
138,84 
96,16 
124,61 
112,79 
201,29 
341,62 
162,82 
65,62 

201,78  226,96 
204,31  238,49 
91,38  91,38 
193,05  209,17 
102,55  108,93 
209,88  270,05 
102,83  102,83 
206,09  247,38 
238,01  238,01 
214,18  214,18 
128,19  140,38 
103,34  108,51 
322,11  375,73 
185,31  203,55 
97,91  97,91 
98,12  98,12 
182,84  198,10 
175,05  189,19 
207,19  247,73 
83,56  83,56 
138,84  151,26 
96,16  96,16 
124,61  136,86 
112,79  112,79 
220,93  322,02 
341,62  341,62 
186,57 
168,56 
82,09 
67,98 

176,58 
188,59 
91,38 
173,78 
108,93 
197,64 
102,83 
194,11 
238,01 
214,18 
140,38 
108,51 
322,11 
170,86 
97,91 
98,12 
170,73 
175,05 
188,46 
83,56 
151,26 
96,16 
136,86 
112,79 
201,29 
341,62 
164,68 
64,63 

201,78 
204,31 
91,38 
197,93 
108,93 
209,88 
102,83 
206,09 
238,01 
214,18 
140,38 
108,51 
322,11 
196,06 
97,91 
98,12 
194,88 
189,19 
207,19 
83,56 
151,26 
96,16 
136,86 
112,79 
220,93 
341,62 
172,03 
67,27 

251,72 
265,53 
91,38 
228,22 
120,38 
306,05 
109,89 
276,54 
246,93 
215,64 
155,14 
120,35 
418,33 
225,75 
97,91 
103,74 
216,14 
208,35 
273,77 
83,56 
168,41 
103,82 
151,80 
115,41 
364,96 
341,62 
202,36 
91,17 

176,58 
188,59 
91,38 
173,78 
120,38 
197,64 
109,89 
194,11 
238,01 
214,18 
155,14 
120,35 
322,11 
170,86 
97,91 
103,74 
170,73 
175,05 
188,46 
83,56 
158,16 
103,82 
151,80 
115,41 
201,29 
341,62 
167,87 
62,63 

201,78 
204,31 
91,38 
197,93 
120,38 
209,88 
109,89 
206,09 
238,01 
214,18 
155,14 
120,35 
322,11 
196,06 
97,91 
103,74 
194,88 
192,51 
207,19 
83,56 
168,41 
103,82 
151,80 
115,41 
220,93 
341,62 
175,74 
64,94 

EN 

56 

EN 

 
  
 
 
 
Table 6.b - Evolution in % of the WAP if an increased 57% rule were applied on WAP (Option D) 

MS  Current 

WAP 
(corrected 
f

174,76 
188,59 
91,38 
167,35 
102,55 
197,64 
102,83 
194,11 
238,01 
214,18 
117,37 
103,34 
322,11 
165,10 
97,91 
98,12 
155,47 
175,05 
188,46 
83,56 
138,84 
96,16 
115,25 
112,79 
201,29 
341,62 
160,92 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV  
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK  
Av 

without 
capping 

57% 
capping 
€101  

capping 
€122  

without 
capping 

59% 
capping 
€101 

61% 

63% 

65% 

capping 
€122  

without 
capping 

capping 
€101  

capping 
€122  

without 
capping 

capping 
€101  

capping 
€122  

without 
capping 

capping 
€101  

capping 
€122  

0,27% 
0,00% 
0,00% 
0,00% 
0,00% 
0,99% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
1,90% 
0,00% 
2,27% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
18,25% 
0,00% 
0,91% 

0,27% 
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% 
1,90% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,08% 

0,27% 
0,00% 
0,00% 
0,00% 
0,00% 
0,99% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
1,90% 
0,00% 
2,27% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
9,76% 
0,00% 
0,58% 

8,52% 
5,07% 
0,00% 
7,11% 
0,00% 
10,61% 
0,00% 
5,25% 
0,00% 
0,00% 
0,49% 
0,00% 
0,00% 
3,02% 
0,00% 
0,00% 
9,19% 
0,00% 
10,44% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
29,51% 
0,00% 
3,43% 

1,04% 
0,00% 
0,00% 
3,84% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,49% 
0,00% 
0,00% 
3,02% 
0,00% 
0,00% 
9,19% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,68% 

8,52% 
5,07% 
0,00% 
7,11% 
0,00% 
6,20% 
0,00% 
5,25% 
0,00% 
0,00% 
0,49% 
0,00% 
0,00% 
3,02% 
0,00% 
0,00% 
9,19% 
0,00% 
9,93% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
9,76% 
0,00% 
2,48% 

18,24% 
14,78% 
0,00% 
15,36% 
0,00% 
22,25% 
0,00% 
15,29% 
0,00% 
0,00% 
9,22% 
0,00% 
5,87% 
12,25% 
0,00% 
0,00% 
17,60% 
0,00% 
20,03% 
0,00% 
0,00% 
0,00% 
8,12% 
0,00% 
43,14% 
0,00% 
7,77% 

1,04% 
0,00% 
0,00% 
3,84% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
9,22% 
0,00% 
0,00% 
3,49% 
0,00% 
0,00% 
9,82% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
8,12% 
0,00% 
0,00% 
0,00% 
1,37% 

15,46% 
8,34% 
0,00% 
15,36% 
0,00% 
6,20% 
0,00% 
6,17% 
0,00% 
0,00% 
9,22% 
0,00% 
0,00% 
12,25% 
0,00% 
0,00% 
17,60% 
0,00% 
9,93% 
0,00% 
0,00% 
0,00% 
8,12% 
0,00% 
9,76% 
0,00% 
4,55% 

29,87% 
26,46% 
0,00% 
24,99% 
6,22% 
36,64% 
0,00% 
27,44% 
0,00% 
0,00% 
19,61% 
5,01% 
16,65% 
23,29% 
0,00% 
0,00% 
27,42% 
8,08% 
31,45% 
0,00% 
8,94% 
0,00% 
18,76% 
0,00% 
59,98% 
0,00% 
14,26% 

1,04% 
0,00% 
0,00% 
3,84% 
6,22% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
19,61% 
5,01% 
0,00% 
3,49% 
0,00% 
0,00% 
9,82% 
0,00% 
0,00% 
0,00% 
8,94% 
0,00% 
18,76% 
0,00% 
0,00% 
0,00% 
2,95% 

15,46% 
8,34% 
0,00% 
18,27% 
6,22% 
6,20% 
0,00% 
6,17% 
0,00% 
0,00% 
19,61% 
5,01% 
0,00% 
18,76% 
0,00% 
0,00% 
25,35% 
8,08% 
9,93% 
0,00% 
8,94% 
0,00% 
18,76% 
0,00% 
9,76% 
0,00% 
7,11% 

44,04% 
40,80% 
0,00% 
36,38% 
17,38% 
54,85% 
6,86% 
42,46% 
3,75% 
0,68% 
32,18% 
16,47% 
29,87% 
36,74% 
0,00% 
5,73% 
39,03% 
19,02% 
45,26% 
0,00% 
21,29% 
7,96% 
31,71% 
2,32% 
81,31% 
0,00% 
23,70% 

1,04% 
0,00% 
0,00% 
3,84% 
17,38% 
0,00% 
6,86% 
0,00% 
0,00% 
0,00% 
32,18% 
16,47% 
0,00% 
3,49% 
0,00% 
5,73% 
9,82% 
0,00% 
0,00% 
0,00% 
13,91% 
7,96% 
31,71% 
2,32% 
0,00% 
0,00% 
5,87% 

15,46% 
8,34% 
0,00% 
18,27% 
17,38% 
6,20% 
6,86% 
6,17% 
0,00% 
0,00% 
32,18% 
16,47% 
0,00% 
18,76% 
0,00% 
5,73% 
25,35% 
9,97% 
9,93% 
0,00% 
21,29% 
7,96% 
31,71% 
2,32% 
9,76% 
0,00% 
10,39% 

EN 

57 

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 
BE 

BG 

CY 

CZ 

DK 

EE 

FI 

FR 

DE  

EL 

HU 

IE 

IT 

LV  

LT 

LU 

MT 

NL. 

PL 

PT 

SK 

SI 

ES 

SE 

UK  

Average 

STDEVP 

174,76 

188,59 

91,38 

167,35 

102,55 

197,64 

102,83 

194,11 

238,01 

214,18 

117,37 

103,34 

322,11 

165,10 

97,91 

98,12 

155,47 

175,05 

188,46 

83,56 

138,84 

96,16 

115,25 

112,79 

201,29 

341,62 
160,92 

66,02 

174,76  174,76  174,76 

174,76 

175,37 

188,59  188,59  188,59 

188,59 

188,59 

100,24  106,24  112,24 

124,24 

136,24 

167,35  167,35  167,35 

167,35 

172,63 

110,57  116,52  122,47 

134,37 

146,27 

197,64  197,64  197,64 

197,64 

197,64 

108,20  114,10  120,00 

131,80 

143,60 

194,11  194,11  194,11 

194,11 

194,11 

238,01  238,01  238,01 

238,01 

238,01 

214,18  214,18  214,18 

214,18 

214,18 

118,44  124,39  130,34 

142,24 

154,14 

110,48  116,48  122,48 

134,48 

146,48 

322,11  322,11  322,11 

322,11 

322,11 

165,10  165,10  165,10 

165,10 

169,66 

102,64  108,54  114,44 

126,24 

138,04 

106,77  112,67  118,57 

130,37 

142,17 

155,47  155,47  155,47 

158,08 

169,58 

175,05  175,05  175,05 

175,05 

175,05 

188,46  188,46  188,46 

188,46 

188,46 

98,23 

104,33  110,43 

122,63 

134,83 

138,84  138,84  138,84 

144,85 

156,95 

106,81  112,76  118,71 

130,62 

142,52 

117,39  123,39  129,39 

141,39 

153,40 

112,79  115,39  121,19 

132,79 

144,39 

201,29  201,29  201,29 

201,29 

201,29 

341,62  341,62  341,62 
163,66  166,05  168,57 

341,62 
173,94 

341,62 
180,28 

63,41 

61,34 

59,24 

55,11 

50,99 

EN 

58 

   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 
BE 

BG 

CY 

CZ 

DK 

EE 

FI 

FR 

DE  

EL 

HU 

IE 

IT 

LV  

LT 

LU 

MT 

NL. 

PL 

PT 

SK 

SI 

ES 

SE 

UK  

Average 

174,76 

188,59 

91,38 

167,35 

102,55 

197,64 

102,83 

194,11 

238,01 

214,18 

117,37 

103,34 

322,11 

165,10 

97,91 

98,12 

155,47 

175,05 

188,46 

83,56 

138,84 

96,16 

115,25 

112,79 

201,29 

341,62 

160,92 

0,00% 

0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
9,69%  16,26%  22,83% 
0,00% 
0,00% 
0,00% 
7,81%  13,61%  19,42% 
0,00% 
0,00% 
0,00% 
5,22%  10,96%  16,70% 
0,00% 
0,00% 
0,00% 

0,00% 

0,35% 

0,00% 

0,00% 

26,45% 

49,09% 

0,00% 

3,16% 

23,68% 

42,62% 

0,00% 

0,00% 

21,98% 

39,65% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 
0,00% 
5,98%  11,05% 
0,91% 
6,91%  12,72%  18,52% 
0,00% 
0,00% 
0,00% 

0,00% 
0,00% 
0,00% 
4,84%  10,86%  16,89% 
8,81%  14,83%  20,84% 
0,00% 
0,00% 
0,00% 

0,00% 

0,00% 

17,48% 

31,32% 

23,16% 

41,75% 

0,00% 

0,00% 

0,00% 

2,77% 

22,44% 

40,99% 

24,74% 

44,89% 

1,65% 

9,08% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 
0,00% 
0,00% 
17,57%  24,87%  32,17% 
0,00% 
0,00% 
0,00% 
11,08%  17,27%  23,45% 
1,86% 
7,07%  12,27% 
2,30% 
7,44% 

0,00% 

0,00% 

0,00% 

31,87% 

61,37% 

4,15% 

13,04% 

26,38% 

48,21% 

18,49% 

33,10% 

15,06% 

28,01% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

2,87% 

5,26% 

7,75% 

9,90%  18,82% 

EN 

59 

   EN 

 
 
  
  
 
 
  
  
  
THE BUDGETARY IMPACT 

Table 8.a - The impact on budget of excise duty changes per year Options B and C 

MS 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV  
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK  
Total  

Option B (capping €122 )

65%

63%

59% 

63854,81 
0 
0 
0 
11227,25 
25857,65 
20162,77 
75613,75  127747,31  201514,51 
40404,98 
27946,97 
27278,63 
10840,33 
5432,81 
2047,02 
32795,42 
32795,42 
23142,14 
0 
0 
0 
0 
0 
0 

61% 
57%
21102,01  112081,05  173115,89  193156,32  198758,84 
82831,46  106737,93  118561,21 
0 
0 
0 
31006,82 
4003,46 
41195,58 
270181,6 
47713,58 
24276,11 
17349,33 
242,97 
32795,42 
0 
0 
0 
0 
0 
89666,07  250294,67  423461,76  548043,34 
22,89 
59384,26  115522,76  173964,78 
22501,34 
9262,69 
0 
0 
0 
0 
0  262615,05  967944,03  1497733,3  1497733,4 
19575,82 
40855,03 
93174,16 
5276,44 
94428,93  105124,42  119468,34  131833,46 

6391,28 
13935 
64897,61 
596,49 

11767,15 
25683,85 
85325,36 
3288,96 

0 

0 

0 

0 

€80

€70

€64

0 
0 

0 
0 

0 
0 

2374,25 

Option C (correct for new Member States)
€75 

€90
1494,67 
0 

0 
0 
14706,57 
0 

0 
7743,03 
0 
0 
0 

0 
2085,24 
0 
0 
0 

0 
13766,43 
0 
0 
0 

0 
20063,23 
0 
0 
0 

0 
31090,05 
0 
0 
0 

€100
21023,22 
5120,74 
66226,7  105900,35  141384,89  199786,65  241431,98 
8269,53 
45208,69  130917,14  207820,34  284166,72  416240,18  520133,09 
0 
39869,87 
0 
0 
0 
88888,96  151788,29  206116,08  260813,34  424289,27  581797,97 
63332,07  108350,68  151472,46  225915,62  284572,05 
19830,82 
0 
0 
297462,1 
0 
77901,74 
1010,04 
94042,77 
7293,59 
39917,89 
0 
0 
0 
0 
0 
1111412  1247869,1 
62543,87  177445,94 
0 
87236,44 
72215,84 
11254,61 
1145,77 
86856,62 
64366,72 
49013,47  132512,96  300461,71  513685,12  962632,56  1398062,9 
0 
0 
5209014 

0 
0 
60912,88 
76222,2 
15959,24 
0 
0 

0 
40132,36 
22814,38 

0 
26890,5 
10496,36 

0 
0 
3727456 

2813,72 
6851,77 
41746,01 
0 

0 
0 
38997,1 
53006,74 
2035,7 
0 
0 
43953,06  111205,63  301996,92  538035,05  718921,08  874792,11 
280911,4 
0 
187643,5 
52100,53 
38829,05 
25530,43 
54660,34 
37459,35 
83818,84 
8709,25  252627,61 
75852,24 
74181,36 
0 
0 
257070,33  934466,27  2135642,6  3288236,6 

0 
0 
4070068  542434,67  1165272,5  1789870,4  2429977,3 

1170,62 
2128,93 
13340,09 
0 
73992,01 
0 
6649,28 
3598,54 
54,68 
0 
56030,46 
0 

0 
0 
26211,01 
39375,93 
0 
0 
0 

4244,38 
82859,7 
15914,83 
26107 
0 
67916,33 
0 

24,05 
25096,17 
8473,53 
6148,19 
0 
58856,81 
0 

0 
0 
12852,78 
24477,63 
0 
0 
0 

0 
0 

0 
0 

0 
0 

EN 

60 

EN 

 
  
Table 8.b - The impact on budget of excise duty changes per year Options D and E 

0 

0 

0 

0 
0 

0 
0 

0 
0 

0 
0 

€75 

€70 

€64 

€80 

€90 

WAP 
59% 

WAP 
65% 

0 
0 
13088,71 
0 

Option E (correct for new Member States) 

0 
27525,88 
0 
53785,45 
0 
32795,42 
0 
0 

0 
13433,59 
0 
53785,45 
0 
28076,39 
0 
0 

0 
14087,42  123812,53  207493,76  284123,75  496561,69 
0 
36548,31 
0 
0 
0 

Option D (capping €122)  
WAP 
WAP 
WAP 
63% 
61% 
57% 
3901,89  115298,44  199964,59  199964,59  199964,59 
73293,5  118133,27  118133,27  118133,27 
0 
0 
0 
0 
32113,96 
32113,96 
0 
99572,91  258035,77 
0 
53785,45 
53785,45 
8898,01 
8820,63 
0 
0 
0 
32795,42 
32795,42 
0 
0 
0 
0 
0 
0 
11265,11  200036,02  396603,81  593633,13 
0 
44928,54  136620,42 
0 
0 
0 
0 
0 
0  267503,38  1022098,4  1497733,4  1497733,4 
0 
0 
0 
16180,15 
0 
0 
99511,91 
72870,48 
8700,18 
5534,14 
0 
0 
35216,46  146893,33  146893,33  146893,33  146893,33 

€100 
5023,13 
0 
66226,7  105900,35  141384,89  254392,95  241431,98 
6110,27 
520131,3 
0 
39869,87 
0 
0 
0 
20739,61  132425,82  236834,85  471666,04  581699,32 
61204,35  108300,64  151449,28  268608,83  284567,51 
0 
0 
0 
0  245484,07 
0 
77901,74 
26191,61 
94042,77 
39375,93 
39702,56 
0 
0 
0 
0 
0 
0  287861,52  538009,34  718921,08  874792,11  1571498,4  1247869,1 
63728,21  177445,94 
0 
87236,44 
89725,19 
40132,19 
86852,83 
72389,72 
22306,22 
0  137403,26  429590,25  1047925,9  1395289,4 
0 
0 
0 
0 
0 
0 
138020,39  831034,76  1980855,4  2987649,6  3796497,3  328996,91  886295,15  1552156,9  2319772,8  4546277,6  5130658,3 

0 
0 
0  125058,28  273227,16 
19734,17 
0 
0 
25448,72 
84112,44 
54710,81 
0  138364,16 
0 
81303,86 
81303,86 
0 
0 

0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
4640,65 
0 
0 
0 

0 
0 
0 
0 
0 
81303,86 
0 

0 
0 
38997,1 
53006,74 
0 
0 
0 

0 
0 
0 
0 
0 
81303,86 
0 

0 
0 
12154,4 
24396,4 
0 
0 
0 

0 
9318,61 
0 
0 
0 
0 

72860,95 
92633,42 
7737,97 
0 
0 

0 
20062,59 
0 
0 
0 

0 
13705,99 
0 
0 
0 

0 
6787,48 
0 
0 
0 

0 
0 
99511,91 
4540,09 

0 
0 
40181,7 
0 

0 
52100,44 
37430,75 

0 
26890,24 
6074,09 

81303,86 
0 

0 
0 

0 
0 

0 
0 

0 

MS 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV  
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK  
Total  

EN 

61 

EN 

 
  
 
 
THE IMPACT ON INFLATION 

Table 9.a - Impact on inflation if the 57% rule were applied to all cigarettes (Option B) 

s
`
P
C
I
H

6
0
0
2
t

h
g
i
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w

s
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t

h
g
i
e
w

WAP 57% 

WAP 59% 

WAP 61% 

WAP 63% 

WAP 65% 

t
n
e
r
r
u
C

P
A
W

i

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a
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2
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o
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0,28% 
0,24%  200,75  14,87% 
18,50  174,76  177,37 
0,15%  197,80  13,18% 
18,58 
0,09% 
7,49% 
0,06%  202,71 
10,99  188,59  188,59 
5,75% 
0,05%  199,43 
11,04 
0,00% 
0,00% 
91,38 
91,38 
0,00% 
0,00% 
0,00% 
91,38 
29,87 
91,38 
30,00 
0,37% 
0,23%  191,33  14,33% 
21,22  167,35  170,78 
0,13%  185,64  10,93% 
21,31 
0,94% 
0,41%  116,07  13,18% 
51,16  102,55  105,13 
8,07% 
0,24%  110,83 
51,38 
0,14% 
4,61% 
0,08%  206,74 
25,09  197,64  203,05 
3,16% 
0,08%  203,88 
25,20 
0,44% 
8,53% 
0,13%  111,60 
30,99  102,83  103,02 
4,15% 
0,05%  107,10 
31,12 
0,11% 
6,17% 
0,11%  206,09 
18,40  194,11  194,11 
6,17% 
0,08%  206,09 
18,48 
0,00% 
0,00% 
0,00%  238,01 
19,86  238,01  238,01 
0,00% 
0,00%  238,01 
19,95 
0,00% 
0,00%  214,18 
0,00% 
32,09  214,18  214,18 
0,00%  214,18 
0,00% 
32,23 
1,21% 
0,49%  142,21  21,16% 
41,59  117,37  117,37 
0,17%  131,14  11,73% 
41,77 
0,62% 
0,19%  117,44  13,65% 
28,63  103,34  104,38 
6,70% 
0,07%  110,25 
28,75 
53,73  322,11  322,11 
0,00% 
0,00%  322,11 
0,00% 
0,00%  322,11 
0,00% 
53,96 
0,39% 
0,24%  196,06  18,76% 
20,67  165,10  165,10 
0,06%  184,15  11,54% 
20,76 
0,22% 
4,68% 
0,07%  102,49 
97,91 
2,50% 
0,03%  100,36 
98,35 
27,56 
27,68 
0,37% 
0,12%  107,26 
9,31% 
98,12 
0,06%  102,94 
4,91% 
24,05 
98,84 
23,95 
2,46% 
1,63%  188,28  21,11% 
105,70  105,25  155,47  160,03 
1,01%  179,50  15,46% 
0,31% 
5,77% 
0,03%  185,14 
1,01% 
0,00%  176,83 
32,37  175,05  175,05 
32,51 
0,22% 
7,98% 
0,17%  203,50 
24,31  188,46  197,60 
6,98% 
0,15%  201,61 
24,42 
83,56 
0,09% 
1,28% 
84,62 
0,00% 
0,12% 
0,00% 
83,66 
26,43 
26,54 
83,56 
0,44% 
0,12%  158,10  13,87% 
19,96  138,84  139,47 
5,80% 
0,03%  146,90 
20,05 
0,41% 
0,16%  106,23  10,48% 
96,16 
6,35% 
0,08%  102,27 
97,50 
24,57 
24,68 
0,98% 
0,26%  136,84  18,74% 
31,02  115,25  115,27 
8,34% 
0,06%  124,86 
31,15 
0,09% 
0,14% 
0,00%  112,96 
21,86  112,79  112,79 
0,00% 
0,00%  112,79 
21,95 
0,19% 
8,85% 
0,17%  219,11 
20,49  201,29  214,56 
8,06% 
0,14%  217,52 
20,58 
0,00% 
25,89  341,62  341,62 
0,00% 
0,00%  341,62 
0,00% 
26,00 
0,00%  341,62 
8,65%  0,30%  176,96  11,81%  0,40% 
5,42%  0,19%  173,19 
30,25  160,92  162,66  1,05%  0,04%  165,43  2,87%  0,10%  168,96 
30,38 

0,03%  189,20 
0,00%  196,87 
0,00% 
91,38 
0,04%  177,22 
0,13%  107,35 
0,07%  203,73 
0,01%  104,41 
0,00%  202,46 
0,00%  238,01 
0,00%  214,18 
0,00%  122,06 
0,03%  105,89 
0,00%  322,11 
0,00%  169,99 
0,01% 
98,98 
0,02%  100,45 
0,31%  170,35 
0,00%  175,05 
0,12%  200,22 
0,00% 
83,56 
0,01%  141,22 
99,35 
0,03% 
0,00%  117,42 
0,00%  112,79 
0,14%  215,26 
0,00%  341,62 

0,28%  201,59 
0,08%  204,37 
0,00% 
91,38 
0,30%  196,73 
0,67%  121,34 
0,12%  208,45 
0,26%  117,42 
0,11%  206,09 
0,00%  238,01 
0,00%  214,18 
0,88%  151,41 
0,39%  125,85 
0,00%  322,11 
0,39%  196,06 
0,13%  105,70 
0,22%  113,28 
2,22%  191,87 
0,19%  191,64 
0,19%  205,15 
0,03% 
86,29 
0,28%  169,40 
0,26%  112,15 
0,58%  151,63 
0,00%  117,63 
0,18%  219,53 
0,00%  341,62 

15,36% 
8,37% 
0,00% 
17,56% 
18,32% 
5,47% 
14,19% 
6,17% 
0,00% 
0,00% 
29,00% 
21,79% 
0,00% 
18,76% 
7,95% 
15,45% 
23,42% 
9,48% 
8,85% 
3,27% 
22,01% 
16,63% 
31,57% 
4,29% 
9,06% 
0,00% 

1,49% 
0,00% 
0,00% 
2,05% 
2,51% 
2,74% 
0,18% 
0,00% 
0,00% 
0,00% 
0,00% 
1,01% 
0,00% 
0,00% 
0,45% 
0,73% 
2,94% 
0,00% 
4,85% 
0,00% 
0,45% 
1,39% 
0,02% 
0,00% 
6,59% 
0,00% 

8,27% 
4,39% 
0,00% 
5,90% 
4,67% 
3,08% 
1,54% 
4,30% 
0,00% 
0,00% 
4,00% 
2,47% 
0,00% 
2,96% 
1,09% 
2,37% 
9,57% 
0,00% 
6,24% 
0,00% 
1,71% 
3,31% 
1,88% 
0,00% 
6,94% 
0,00% 

MS 
AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV  
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK  
Av 

EN 

62 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
€
 
 
 
 
 
 
€
 
 
 
 
 
 
Table 9.b - Impact on inflation if the €64 rule were applied to all cigarettes (Option C) 

6
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7
 €
P
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W

.
r
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%

(

n
o
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m

i

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a
l
f
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5
7
 €
P
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%

(

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o
t
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m

i

n
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t
a
l
f
n
i

0
8
 €
P
A
W

.
r
c
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I

.
)

%

(

n
o
t
c
a
p
m

i

n
o
i
t
a
l
f
n
i

0
9
 €
P
A
W

.
r
c
n
I

)

%

(

n
o
t
c
a
p
m

i

n
o
i
t
a
l
f
n
i

0
0
1
 €
P
A
W

.
r
c
n
I

)

%

(

18,50  174,76  174,76 
18,58 
10,99  188,59  188,59 
11,04 
29,87 
93,25 
91,38 
30,00 
21,22  167,35  167,35 
21,31 
51,16  102,55  105,38 
51,38 
25,09  197,64  197,64 
25,20 
30,99  102,83  104,44 
31,12 
18,40  194,11  194,11 
18,48 
19,86  238,01  238,01 
19,95 
32,09  214,18  214,18 
32,23 
41,59  117,37  122,02 
41,77 
28,63  103,34  105,58 
28,75 
53,73  322,11  322,11 
53,96 
20,67  165,10  165,10 
20,76 
97,91 
27,56 
98,29 
27,68 
24,05 
98,12  100,60 
23,95 
105,70  105,25  155,47  155,47 
32,37  175,05  175,05 
32,51 
24,31  188,46  188,46 
24,42 
26,43 
26,54 
91,30 
83,56 
19,96  138,84  138,84 
20,05 
96,16  100,43 
24,57 
24,68 
31,02  115,25  115,65 
31,15 
21,86  112,79  113,71 
21,95 
20,49  201,29  201,29 
20,58 
25,89  341,62  341,62 
26,00 
30,25  160,92  162,05  1,16%  0,04%  164,16 
30,38 

0,00 
0,00%  174,76 
0,00 
0,00%  188,59 
9,69 
0,06%  100,24 
0,00 
0,00%  167,35 
8,29 
0,14%  111,05 
0,00 
0,00%  197,64 
5,99 
0,05%  108,99 
0,00 
0,00%  194,11 
0,00 
0,00%  238,01 
0,00 
0,00%  214,18 
6,89 
0,16%  125,46 
7,16 
0,06%  110,74 
0,00 
0,00%  322,11 
0,00 
0,00%  165,10 
5,12 
0,01%  102,93 
8,85 
0,06%  106,80 
0,00 
0,00%  155,47 
0,00 
0,00%  175,05 
0,00 
0,00%  188,46 
17,57 
98,24 
0,25% 
0,00 
0,00%  138,84 
11,08 
0,11%  106,81 
3,25 
0,01%  118,99 
2,22 
0,02%  115,30 
0,00 
0,00%  201,29 
0,00%  341,62  0,00% 

0,00% 
0,00% 
2,04% 
0,00% 
2,76% 
0,00% 
1,57% 
0,00% 
0,00% 
0,00% 
3,96% 
2,17% 
0,00% 
0,00% 
0,39% 
2,53% 
0,00% 
0,00% 
0,00% 
9,27% 
0,00% 
4,43% 
0,35% 
0,81% 
0,00% 
0,00% 

0,00 
0,00%  174,76 
0,00 
0,00%  188,59 
0,29%  106,24  16,26 
0,00%  167,35 
0,00 
0,42%  116,54  13,64 
0,00 
0,00%  197,64 
0,19%  114,16  11,01 
0,00 
0,00%  194,11 
0,00 
0,00%  238,01 
0,00 
0,00%  214,18 
0,29%  128,54 
9,52 
0,21%  116,48  12,72 
0,00%  322,11 
0,00 
0,00 
0,00%  165,10 
0,14%  108,55  10,87 
0,21%  112,67  14,83 
0,00 
0,00%  155,47 
0,00 
0,00%  175,05 
0,00%  188,46 
0,00 
0,46%  104,33  24,87 
0,00%  138,84 
0,00 
0,27%  112,76  17,27 
7,24 
0,10%  123,59 
5,13 
0,05%  118,58 
0,00 
0,00%  201,29 
0,00 
0,00%  341,62 

0,00 
0,00%  174,76 
0,00 
0,00%  188,59 
0,49%  112,24  22,83 
0,00%  167,35 
0,00 
0,70%  122,47  19,42 
0,00 
0,00%  197,64 
0,34%  120,00  16,70 
0,00 
0,00%  194,11 
0,00 
0,00%  238,01 
0,00 
0,00%  214,18 
0,40%  131,77  12,26 
0,36%  122,48  18,53 
0,00%  322,11 
0,00 
0,00 
0,00%  165,10 
0,30%  114,44  16,89 
0,36%  118,57  20,84 
0,44 
0,00%  156,15 
0,00 
0,00%  175,05 
0,00%  188,46 
0,00 
0,66%  110,43  32,17 
0,00%  138,84 
0,00 
0,42%  118,71  23,45 
0,22%  129,41  12,28 
8,99 
0,11%  122,94 
0,00 
0,00%  201,29 
0,00 
0,00%  341,62 

1,21  0,03%  174,54 

0,00  0,00%  197,64 

0,10  0,00%  177,36 
0,00  0,00%  189,23 

0,00  0,00%  194,11 
0,00  0,00%  238,01 
0,00  0,00%  214,18 

0,00%  174,94 
1,49 
0,00%  188,59 
0,34 
0,68%  124,24  35,96  1,07%  136,24  49,09 
0,00%  169,37 
4,30 
0,99%  134,37  31,02  1,59%  146,27  42,63 
0,00%  197,64 
0,00 
0,52%  131,80  28,17  0,87%  143,60  39,65 
0,00%  194,11 
0,00 
0,00%  238,01 
0,00 
0,00%  214,18 
0,00 
0,51%  142,27  21,21  0,88%  154,15  31,33 
0,53%  134,48  30,14  0,86%  146,48  41,75 
0,00%  322,11 
0,00 
0,00%  165,10 
3,37 
0,47%  126,24  28,94  0,80%  138,04  40,99 
0,50%  130,37  32,86  0,79%  142,17  44,89 
0,05%  160,95 
9,13 
0,00%  175,05 
0,00 
0,00%  188,46 
0,00 
0,85%  122,63  46,77  1,24%  134,83  61,37 
0,00%  144,87 
4,34  0,09%  156,95  13,04 
0,58%  130,62  35,83  0,88%  142,52  48,21 
0,38%  141,40  22,69  0,70%  153,40  33,10 
0,20%  133,02  17,93  0,39%  144,47  28,08 
0,00%  201,29 
0,00 
0,00%  341,62 
0,00 
18,9 

3,52  0,37%  169,66 
0,00  0,00%  175,05 
0,00  0,00%  188,46 

0,00  0,00%  322,11 
0,00  0,00%  170,65 

0,00  0,00%  201,29 
0,00  0,00%  341,62 

0,4%  180,50 

13,1 

3,31  0,10%  166,35 

5,51  0,17%  168,72 

7,88  0,24%  174,14 

MS 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV  
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK  
Av 

EN 

63 

t
c
a
p
m

i

n
o

n
o
i
t
a
l
f
n
i

0,03% 
0,00% 
1,47% 
0,09% 
2,18% 
0,00% 
1,23% 
0,00% 
0,00% 
0,00% 
1,30% 
1,20% 
0,00% 
0,07% 
1,13% 
1,07% 
0,96% 
0,00% 
0,00% 
1,62% 
0,26% 
1,18% 
1,03% 
0,61% 
0,00% 
0,00% 
0,59% 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 9.c - Impact on inflation if the 57% rule were applied to WAP (Option D) 

57% 

59% 

61% 

63% 

65% 

6
0
0
2

t
h
g
i
e
w

s
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P
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I
H

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r
r
o
c
(
P
A
W

t
n
e
r
r
u
C

2
2
1
 €
g
n
i
p
p
a
c

e
s
a
e
r
c
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I

n
o
t
c
a
p
m

i

n
o
i
t
a
l
f
n
i

e
s
a
e
r
c
n
I

n
o
t
c
a
p
m

i

n
o
i
t
a
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f
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i

2
2
1
 €
g
n
i
p
p
a
c

e
s
a
e
r
c
n
I

n
o
t
c
a
p
m

I

n
o
i
t
a
l
f
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2
2
1
 €
g
n
i
p
p
a
c

e
s
a
e
r
c
n
I

n
o
t
c
a
p
m

i

n
o
i
t
a
l
f
n
i

2
2
1
 €
g
n
i
p
p
a
c

e
s
a
e
r
c
n
I

n
o
t
c
a
p
m

i

n
o
i
t
a
l
f
n
i

2
2
1
 €
g
n
i
p
p
a
c

MS 
AT 

BE 

BG 

CY 

CZ 

DK 

EE 

FI 

FR 

DE  

EL 

HU 

IE 

IT 

LV  

LT 

LU 

MT 

NL. 

PL 

PT 

SK 

SI 

ES 

SE 

UK  

Av 

18,58 

11,04 

30,00 

21,31 

51,38 

25,20 

31,12 

18,48 

19,95 

32,23 

41,77 

28,75 

53,96 

20,76 

27,68 

24,05 

105,70 

32,51 

24,42 

26,54 

20,05 

24,68 

31,15 

21,95 

20,58 

26,00 

30,38 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

27,56 

23,95 

97,91 

98,12 

97,91 

0,00% 

0,00% 

97,91 

0,00% 

0,00% 

98,12 

0,00% 

0,00% 

98,12 

0,00% 

0,00% 

97,91 

98,12 

0,00% 

0,00% 

0,00% 

0,00% 

97,91 

98,12 

0,00% 

0,00% 

97,91 

0,00% 

0,00% 

0,00% 

0,00% 

103,74 

5,73% 

0,14% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

25,89 
30,25 

341,62 
160,92 

341,62 
162,04 

0,00% 
0,58% 

0,00% 
0,02% 

341,62 
165,42 

0,00% 
2,48% 

0,00% 
0,08% 

341,62 
168,56 

0,00% 
4,55% 

0,00% 
0,16% 

341,62 
172,03 

0,00% 
7,11% 

0,00% 
0,26% 

341,62 
175,74 

0,00% 
10,39% 

0,00% 
0,37% 

EN 

64 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 9.d - Impact on inflation if the €64 rule were applied to WAP (Option E) 

HICP`s 
weight 
2006 

new  
HICP`s 
weight 

Current  
WAP 
(corr.)  WAP 

€64 

Incr. 

impact  
on  
inflation  WAP 

€70 

Incr. 

impact  
on  
inflation  WAP 

€75 

Incr. 

impact  
on 
inflation  WAP 

€80 

Incr. 

impact  
on  
inflation 

€90 

90 € 

Incr. 

impact 
on  
inflation  WAP 

€100 

Incr. 

impact 
on 
inflation 

18,58 

11,04 

30,00 

21,31 

51,38 

25,20 

31,12 

18,48 

19,95 

32,23 

41,77 

28,75 

53,96 

20,76 

27,68 

24,05 

105,70 

32,51 

24,42 

26,54 

20,05 

24,68 

31,15 

21,95 

20,58 

26,00 

30,38 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

27,56 

23,95 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

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% 

0,01% 

0,00% 

1,47% 

0,07% 

2,18% 

0,00% 

1,23% 

0,00% 

0,00% 

0,00% 

1,30% 

1,20% 

0,00% 

0,06% 

1,13% 

1,07% 

0,96% 

0,00% 

0,00% 

1,62% 

0,26% 

1,18% 

1,03% 

0,61% 

0,00% 

25,89 
30,25 

341,62 
160,92 

341,62 
161,49 

0,00% 
0,64% 

0,00% 
0,02% 

341,62 
163,66 

0,00% 
2,87% 

0,00% 
0,09% 

341,62 
166,05 

0,00% 
5,26% 

0,00% 
0,16% 

341,62 
168,57 

0,00% 
7,75% 

0,00% 
0,24% 

341,62 
173,94 

0,00% 
9,90% 

0,00% 
0,31% 

341,62 
180,28 

0,00% 
18,82% 

0,00% 
0,59% 

MS 
AT 

BE 

BG 

CY 

CZ 

DK 

EE 

FI 

FR 

DE  

EL 

HU 

IE 

IT 

LV  

LT 

LU 

MT 

NL. 

PL 

PT 

SK 

SI 

ES 

SE 

UK  

Av 

EN 

65 

EN 

 
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
THE IMPACT ON HEALTH OBJECTIVES 

Table 10.a - Impact on price and demand of an increase of the minimum requirement under Option B. 

increase 57% 
price 
1,49% 
0,00% 
0,00% 
2,05% 
2,51% 
2,74% 
0,18% 
0,00% 
0,00% 
0,00% 
0,00% 
1,01% 
0,00% 
0,00% 
0,45% 
0,73% 
2,94% 
0,00% 
4,85% 
0,00% 
0,45% 
1,39% 
0,02% 
0,00% 
6,59% 
0,00% 

demand  
-0,64% 
0,00% 
0,00% 
-0,88% 
-1,08% 
-1,18% 
-0,08% 
0,00% 
0,00% 
0,00% 
0,00% 
-0,43% 
0,00% 
0,00% 
-0,19% 
-0,31% 
-1,26% 
0,00% 
-2,08% 
0,00% 
-0,19% 
-0,60% 
-0,01% 
0,00% 
-2,83% 
0,00% 

increase 59% 
Price 
8,27% 
4,39% 
0,00% 
5,90% 
4,67% 
3,08% 
1,54% 
4,30% 
0,00% 
0,00% 
4,00% 
2,47% 
0,00% 
2,96% 
1,09% 
2,37% 
9,57% 
0,00% 
6,24% 
0,00% 
1,71% 
3,31% 
1,88% 
0,00% 
6,94% 
0,00% 

demand  
-3,55% 
-1,89% 
0,00% 
-2,54% 
-2,01% 
-1,32% 
-0,66% 
-1,85% 
0,00% 
0,00% 
-1,72% 
-1,06% 
0,00% 
-1,27% 
-0,47% 
-1,02% 
-4,12% 
0,00% 
-2,68% 
0,00% 
-0,74% 
-1,43% 
-0,81% 
0,00% 
-2,98% 
0,00% 

increase 61% 
price 
13,18% 
5,75% 
0,00% 
10,93% 
8,07% 
3,16% 
4,15% 
6,17% 
0,00% 
0,00% 
11,73% 
6,70% 
0,00% 
11,54% 
2,50% 
4,91% 
15,46% 
1,01% 
6,98% 
0,12% 
5,80% 
6,35% 
8,34% 
0,00% 
8,06% 
0,00% 

demand  
-5,67% 
-2,47% 
0,00% 
-4,70% 
-3,47% 
-1,36% 
-1,79% 
-2,65% 
0,00% 
0,00% 
-5,04% 
-2,88% 
0,00% 
-4,96% 
-1,08% 
-2,11% 
-6,65% 
-0,44% 
-3,00% 
-0,05% 
-2,49% 
-2,73% 
-3,59% 
0,00% 
-3,47% 
0,00% 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV 
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK 

EN 

increase 65% 
price 
15,36% 
8,37% 
0,00% 
17,56% 
18,32% 
5,47% 
14,19% 
6,17% 
0,00% 
0,00% 
29,00% 
21,79% 
0,00% 
18,76% 
7,95% 
15,45% 
23,42% 
9,48% 
8,85% 
3,27% 
22,01% 
16,63% 
31,57% 
4,29% 
9,06% 
0,00% 

demand  
-6,60% 
-3,60% 
0,00% 
-7,55% 
-7,88% 
-2,35% 
-6,10% 
-2,65% 
0,00% 
0,00% 
-12,47% 
-9,37% 
0,00% 
-8,07% 
-3,42% 
-6,64% 
-10,07% 
-4,08% 
-3,81% 
-1,41% 
-9,46% 
-7,15% 
-13,57% 
-1,84% 
-3,90% 
0,00% 

increase 63% 
price 
14,87% 
7,49% 
0,00% 
14,33% 
13,18% 
4,61% 
8,53% 
6,17% 
0,00% 
0,00% 
21,16% 
13,65% 
0,00% 
18,76% 
4,68% 
9,31% 
21,11% 
5,77% 
7,98% 
1,28% 
13,87% 
10,48% 
18,74% 
0,14% 
8,85% 
0,00% 

demand  
-6,40% 
-3,22% 
0,00% 
-6,16% 
-5,67% 
-1,98% 
-3,67% 
-2,65% 
0,00% 
0,00% 
-9,10% 
-5,87% 
0,00% 
-8,07% 
-2,01% 
-4,00% 
-9,08% 
-2,48% 
-3,43% 
-0,55% 
-5,97% 
-4,50% 
-8,06% 
-0,06% 
-3,81% 
0,00% 

66 

EN 

 
  
  
  
Table 10.b - Impact on price and demand of an increase of the minimum requirement under Option C. 

€64  

price 
increase 
(%) 

d
e
m
a
n
d

€70  

price 
increase 
(%) 

d
e
m
a
n
d

€75  

price 
increase 
(%) 

d
e
m
a
n
d

€80  

price 
increase 
(%) 

d
e
m
a
n
d

€90  

price 
increase 
(%) 

d
e
m
a
n
d

€100  

price 
increase (%) 

d
e
m
a
n
d

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV 
LT 
LU 
MT 
NL. 

PL 
PT 
SK 
SI 
ES 
SE 
UK 

0,00% 
0,00% 
2,04% 
0,00% 
2,76% 
0,00% 
1,57% 
0,00% 
0,00% 
0,00% 
3,96% 
2,17% 
0,00% 
0,00% 
0,39% 
2,53% 
0,00% 
0,00% 
0,00% 

9,27% 
0,00% 
4,43% 
0,35% 
0,81% 
0,00% 
0,00% 

0,00% 
0,00% 
-0,88% 
0,00% 
-1,19% 
0,00% 
-0,67% 
0,00% 
0,00% 
0,00% 
-1,70% 
-0,93% 
0,00% 
0,00% 
-0,17% 
-1,09% 
0,00% 
0,00% 
0,00% 

-3,99% 
0,00% 
-1,91% 
-0,15% 
-0,35% 
0,00% 
0,00% 

0,00% 
0,00% 
9,69% 
0,00% 
8,29% 
0,00% 
5,99% 
0,00% 
0,00% 
0,00% 
6,89% 
7,16% 
0,00% 
0,00% 
5,12% 
8,85% 
0,00% 
0,00% 
0,00% 

17,57% 
0,00% 
11,08% 
3,25% 
2,22% 
0,00% 
0,00% 

0,00% 
0,00% 
-4,17% 
0,00% 
-3,56% 
0,00% 
-2,58% 
0,00% 
0,00% 
0,00% 
-2,96% 
-3,08% 
0,00% 
0,00% 
-2,20% 
-3,80% 
0,00% 
0,00% 
0,00% 

-7,55% 
0,00% 
-4,76% 
-1,40% 
-0,95% 
0,00% 
0,00% 

0,00% 
0,00% 
16,26% 
0,00% 
13,64% 
0,00% 
11,01% 
0,00% 
0,00% 
0,00% 
9,52% 
12,72% 
0,00% 
0,00% 
10,87% 
14,83% 
0,00% 
0,00% 
0,00% 

24,87% 
0,00% 
17,27% 
7,24% 
5,13% 
0,00% 
0,00% 

0,00% 
0,00% 
-6,99% 
0,00% 
-5,86% 
0,00% 
-4,74% 
0,00% 
0,00% 
0,00% 
-4,09% 
-5,47% 
0,00% 
0,00% 
-4,67% 
-6,38% 
0,00% 
0,00% 
0,00% 

-10,69% 
0,00% 
-7,42% 
-3,11% 
-2,20% 
0,00% 
0,00% 

0,00% 
0,00% 
22,83% 
0,00% 
19,42% 
0,00% 
16,70% 
0,00% 
0,00% 
0,00% 
12,26% 
18,53% 
0,00% 
0,00% 
16,89% 
20,84% 
0,44% 
0,00% 
0,00% 

32,17% 
0,00% 
23,45% 
12,28% 
8,99% 
0,00% 
0,00% 

EN 

-0,05% 
0,00% 
-15,46% 
-0,52% 
-13,34% 
0,00% 
-12,11% 
0,00% 
0,00% 
0,00% 
-9,12% 
-12,96% 
0,00% 
0,00% 
-12,44% 
-14,13% 
-1,52% 
0,00% 
0,00% 

-20,11% 
-1,87% 
-15,41% 
-9,76% 
-7,71% 
0,00% 
0,00% 

1,49% 
0,34% 
49,09% 
4,30% 
42,63% 
0,00% 
39,65% 
0,00% 
0,00% 
0,00% 
31,33% 
41,75% 
0,00% 
3,37% 
40,99% 
44,89% 
9,13% 
0,00% 
0,00% 
61,37% 

13,04% 
48,21% 
33,10% 
28,08% 
0,00% 

0,00% 

-0,64% 
-0,15% 
-21,11% 
-1,85% 
-18,33% 
0,00% 
-17,05% 
0,00% 
0,00% 
0,00% 
-13,47% 
-17,95% 
0,00% 
-1,45% 
-17,63% 
-19,30% 
-3,92% 
0,00% 
0,00% 

-26,39% 
-5,61% 
-20,73% 
-14,23% 
-12,08% 
0,00% 
0,00% 

0,00% 
0,00% 
-9,82% 
0,00% 
-8,35% 
0,00% 
-7,18% 
0,00% 
0,00% 
0,00% 
-5,27% 
-7,97% 
0,00% 
0,00% 
-7,26% 
-8,96% 
-0,19% 
0,00% 
0,00% 

-13,83% 
0,00% 
-10,09% 
-5,28% 
-3,87% 
0,00% 
0,00% 

0,10% 
0,00% 
35,96% 
1,21% 
31,02% 
0,00% 
28,17% 
0,00% 
0,00% 
0,00% 
21,21% 
30,14% 
0,00% 
0,00% 
28,94% 
32,86% 
3,52% 
0,00% 
0,00% 

46,77% 
4,34% 
35,83% 
22,69% 
17,93% 
0,00% 
0,00% 

67 

EN 

 
  
 
  
  
 
 
 
 
 
 
 
 
 
 
 
 
Table 10.c - Impact on price and demand of an increase of the minimum requirement under Option D. 

increase 57% 

increase 59% 

increase 61% 

increase 63% 

increase 65% 

P

r
i
c
e

d

d
e
m
a
n

p
r
i
c
e

d

d
e
m
a
n

p
r
i
c
e

d

d
e
m
a
n

p
r
i
c
e

d

d
e
m
a
n

p
r
i
c
e

d

d
e
m
a
n

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV 
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK 

0,27% 
0,00% 
0,00% 
0,00% 
0,00% 
0,99% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
1,90% 
0,00% 
2,27% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
9,76% 
0,00% 

-0,12% 
0,00% 
0,00% 
0,00% 
0,00% 
-0,43% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
-0,82% 
0,00% 
-0,98% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
-4,20% 
0,00% 

8,52% 
5,07% 
0,00% 
7,11% 
0,00% 
6,20% 
0,00% 
5,25% 
0,00% 
0,00% 
0,49% 
0,00% 
0,00% 
3,02% 
0,00% 
0,00% 
9,19% 
0,00% 
9,93% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
9,76% 
0,00% 

-3,66% 
-2,18% 
0,00% 
-3,06% 
0,00% 
-2,66% 
0,00% 
-2,26% 
0,00% 
0,00% 
-0,21% 
0,00% 
0,00% 
-1,30% 
0,00% 
0,00% 
-3,95% 
0,00% 
-4,27% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
-4,20% 
0,00% 

15,46% 
8,34% 
0,00% 
15,36% 
0,00% 
6,20% 
0,00% 
6,17% 
0,00% 
0,00% 
9,22% 
0,00% 
0,00% 
12,25% 
0,00% 
0,00% 
17,60% 
0,00% 
9,93% 
0,00% 
0,00% 
0,00% 
8,12% 
0,00% 
9,76% 
0,00% 

-6,65% 
-3,58% 
0,00% 
-6,61% 
0,00% 
-2,66% 
0,00% 
-2,65% 
0,00% 
0,00% 
-3,96% 
0,00% 
0,00% 
-5,27% 
0,00% 
0,00% 
-7,57% 
0,00% 
-4,27% 
0,00% 
0,00% 
0,00% 
-3,49% 
0,00% 
-4,20% 
0,00% 

15,46% 
8,34% 
0,00% 
18,27% 
6,22% 
6,20% 
0,00% 
6,17% 
0,00% 
0,00% 
19,61% 
5,01% 
0,00% 
18,76% 
0,00% 
0,00% 
25,35% 
8,08% 
9,93% 
0,00% 
8,94% 
0,00% 
18,76% 
0,00% 
9,76% 
0,00% 

-6,65% 
-3,58% 
0,00% 
-7,86% 
-2,67% 
-2,66% 
0,00% 
-2,65% 
0,00% 
0,00% 
-8,43% 
-2,15% 
0,00% 
-8,07% 
0,00% 
0,00% 
-10,90% 
-3,47% 
-4,27% 
0,00% 
-3,84% 
0,00% 
-8,07% 
0,00% 
-4,20% 
0,00% 

15,46% 
8,34% 
0,00% 
18,27% 
17,38% 
6,20% 
6,86% 
6,17% 
0,00% 
0,00% 
32,18% 
16,47% 
0,00% 
18,76% 
0,00% 
5,73% 
25,35% 
9,97% 
9,93% 
0,00% 
21,29% 
7,96% 
31,71% 
2,32% 
9,76% 
0,00% 

-6,65% 
-3,58% 
0,00% 
-7,86% 
-7,47% 
-2,66% 
-2,95% 
-2,65% 
0,00% 
0,00% 
-13,84% 
-7,08% 
0,00% 
-8,07% 
0,00% 
-2,46% 
-10,90% 
-4,29% 
-4,27% 
0,00% 
-9,16% 
-3,42% 
-13,64% 
-1,00% 
-4,20% 
0,00% 

EN 

68 

EN 

 
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 10.d - Impact on price and demand of an increase of the minimum requirement under Option E. 

Price 
increase 
(%) 

€64  

d
e
m
a
n
d

price 
increase 
(%) 

€70  

d
e
m
a
n
d

price 
increase 
(%) 

€75  

d
e
m
a
n
d

€80  

€90  

€100  

price 
increase 
(%) 

d
e
m
a
n
d

price 
increase 
(%) 

d
e
m
a
n
d

price 
increase 
(%) 

d
e
m
a
n
d

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV 
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK 

0,00% 
0,00% 
1,81% 
0,00% 
0,85% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
1,60% 
0,00% 
0,00% 
0,00% 
8,81% 
0,00% 
3,65% 
0,00% 
0,00% 
0,00% 
0,00% 

0,00% 
0,00% 
-0,78% 
0,00% 
-0,37% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
-0,69% 
0,00% 
0,00% 
0,00% 
-3,79% 
0,00% 
-1,57% 
0,00% 
0,00% 
0,00% 
0,00% 

0,00% 
0,00% 
9,69% 
0,00% 
7,81% 
0,00% 
5,22% 
0,00% 
0,00% 
0,00% 
0,91% 
6,91% 
0,00% 
0,00% 
4,84% 
8,81% 
0,00% 
0,00% 
0,00% 
17,57% 
0,00% 
11,08% 
1,86% 
0,00% 
0,00% 
0,00% 

0,00% 
0,00% 
-4,17% 
0,00% 
-3,36% 
0,00% 
-2,25% 
0,00% 
0,00% 
0,00% 
-0,39% 
-2,97% 
0,00% 
0,00% 
-2,08% 
-3,79% 
0,00% 
0,00% 
0,00% 
-7,55% 
0,00% 
-4,76% 
-0,80% 
0,00% 
0,00% 
0,00% 

0,00% 
0,00% 
16,26% 
0,00% 
13,61% 
0,00% 
10,96% 
0,00% 
0,00% 
0,00% 
5,98% 
12,72% 
0,00% 
0,00% 
10,86% 
14,83% 
0,00% 
0,00% 
0,00% 
24,87% 
0,00% 
17,27% 
7,07% 
2,30% 
0,00% 
0,00% 

0,00% 
0,00% 
22,83% 
0,00% 
19,42% 
0,00% 
16,70% 
0,00% 
0,00% 
0,00% 

0,00% 
0,00% 
-6,99% 
0,00% 
-5,85% 
0,00% 
-4,71% 
0,00% 
0,00% 
0,00% 
-2,57%  11,05% 
-5,47%  18,52% 
0,00% 
0,00% 
-4,67% 
-6,38% 
0,00% 
0,00% 
0,00% 
-10,7% 
0,00% 
-7,42% 
-3,04% 
-0,99% 
0,00% 
0,00% 

0,00% 
0,00% 
16,89% 
20,84% 
0,00% 
0,00% 
0,00% 
32,17% 
0 
23,45% 
12,27% 
7,44% 
0,00% 
0,00% 

0,00% 
0,00% 
-9,82% 
0,00% 
-8,35% 
0,00% 
-7,18% 
0,00% 
0,00% 
0,00% 
-4,75% 
-7,97% 
0,00% 
0,00% 
-7,26% 
-8,96% 
0,00% 
0,00% 
0,00% 
-13,8% 
0,00% 
-10,1% 
-5,28% 
-3,20% 
0,00% 
0,00% 

0,00% 
0,00% 
26,45% 
0,00% 
23,68% 
0,00% 
21,98% 
0,00% 
0,00% 
0,00% 
17,48% 
23,16% 
0,00% 
0,00% 
22,44% 
24,74% 
1,65% 
0,00% 
0,00% 
31,87% 
4,15% 
26,38% 
18,49% 
15,06% 
0,00% 
0,00% 

0,00% 
0,35% 
0,00% 
0,00% 
-11,4% 
49,09% 
0,00% 
3,16% 
-10,2%  42,62% 
0,00% 
0,00% 
-9,45% 
39,65% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
0,00% 
-7,52% 
31,32% 
-9,96% 
41,75% 
0,00% 
0,00% 
0,00% 
2,77% 
-9,65% 
40,99% 
-10,6% 
44,89% 
-0,71% 
9,08% 
0,00% 
0,00% 
0,00% 
0,00% 
-13,7% 
61,37% 
-1,78% 
13,04% 
-11,3% 
48,21% 
-7,95% 
33,10% 
-6,48% 
28,01% 
0,00% 
0,00% 
0,00% 

0 

-0,15% 
0,00% 
-21,1% 
-1,36% 
-18,3% 
0,00% 
-17% 
0,00% 
0,00% 
0,00% 
-13,5% 
-18% 
0,00% 
-1,19% 
-17,6% 
-19,3% 
-3,90% 
0,00% 
0,00% 
-26,4% 
-5,61% 
-20,7% 
-14,2% 
-12,0% 
0,00% 
0,00% 

EN 

69 

EN 

 
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
Table 11.a - Impact on price and demand of an increase of both minimum requirements (Option C and D) . 

MS 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV 
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK 

AV 

Current situation  
(corrected for new MS) 

€90  

€100  

63% 

65% 

cheapest 
150,0 
160,4 
85,3 
144,0 
82,1 
157,5 
83,8 
182,3 
223,3 
180,0 
75,0 
72,9 
300,0 
160,0 
81,6 
78,5 
120,0 
151,4 
155,3 
65,9 
125,0 
71,0 
92,6 
87,5 
161,2 
305,2 
136,6 

Most expensive 
190,0 
210,5 
94,4 
200,7 
134,4 
227,8 
127,7 
198,4 
250,0 
230,0 
150,0 
130,0 
335,0 
200,0 
141,3 
124,4 
180,0 
186,4 
210,5 
109,1 
157,5 
123,9 
132,3 
137,5 
225,6 
391,2 
184,6 

cheapest  most expensive 
151,4 
160,4 
122,1 
149,7 
120,9 
157,5 
119,8 
182,3 
223,3 
180,0 
119,8 
114,5 
300,0 
160,0 
114,1 
116,1 
136,6 
151,4 
155,3 
112,4 
132,3 
112,9 
131,0 
124,5 
161,2 
305,2 
154,4 

190,0 
210,5 
125,3 
200,7 
155,4 
227,8 
147,5 
198,4 
250,0 
230,0 
154,9 
151,9 
335,0 
200,0 
158,5 
149,6 
180,0 
186,4 
210,5 
137,3 
159,3 
150,1 
149,3 
141,5 
225,6 
391,2 
192,9 

cheapest 
163,4 
163,5 
134,1 
161,2 
132,8 
157,5 
131,6 
182,3 
223,3 
180,0 
131,7 
126,5 
300,0 
167,9 
125,9 
127,9 
148,1 
151,4 
155,3 
124,6 
144,4 
124,8 
143,0 
136,1 
161,2 
305,2 
161,7 

most 
expensive 
190,0 
210,5 
137,3 
200,7 
167,3 
227,8 
159,3 
198,4 
250,0 
230,0 
166,8 
163,9 
335,0 
200,0 
170,3 
161,4 
181,1 
186,4 
210,5 
149,5 
171,4 
162,0 
161,3 
153,1 
225,6 
391,2 
198,5 

cheapest 
177,8 
178,8 
85,3 
167,7 
82,1 
157,5 
83,8 
201,5 
223,3 
180,0 
75,0 
72,9 
300,0 
194,3 
81,6 
78,5 
120,3 
151,4 
155,3 
65,8 
125,0 
71,0 
94,1 
87,5 
161,2 
305,2 
141,4 

most 
expensive 
209,2 
212,9 
94,4 
214,2 
192,9 
234,9 
160,9 
207,8 
250,0 
230,0 
191,0 
180,0 
335,0 
208,0 
196,3 
168,9 
206,4 
197,2 
224,2 
118,8 
198,0 
171,6 
169,2 
137,7 
240,7 
391,2 
205,4 

cheapest 
189,8 
190,1 
85,3 
183,0 
82,1 
157,5 
83,8 
201,5 
223,3 
180,0 
75,0 
72,9 
300,0 
194,3 
81,6 
78,5 
131,2 
151,4 
155,3 
65,8 
125,0 
71,0 
104,3 
87,5 
161,2 
305,2 
143,7 

most 
expensive 
209,2 
212,9 
94,4 
214,2 
193,5 
234,9 
177,2 
207,8 
250,0 
230,0 
193,0 
190,3 
335,0 
208,0 
196,3 
186,0 
206,4 
197,2 
224,2 
132,8 
198,0 
188,1 
187,6 
150,7 
240,7 
391,2 
209,6 

EN 

70 

EN 

 
  
  
  
  
  
  
  
  
  
  
  
Table 11.b - Impact on price and demand of an increase of both minimum requirements (Option C and D). 

Current situation  
(corrected for new MS) 

€100and 63% 

€100and 65% 

MS 

AT 
BE 
BG 
CY 
CZ 
DK 
EE 
FI 
FR 
DE  
EL 
HU 
IE 
IT 
LV 
LT 
LU 
MT 
NL. 
PL 
PT 
SK 
SI 
ES 
SE 
UK 

AV 

EN 

cheapest 
150,0 
160,4 
85,3 
144,0 
82,1 
157,5 
83,8 
182,3 
223,3 
180,0 
75,0 
72,9 
300,0 
160,0 
81,6 
78,5 
120,0 
151,4 
155,3 
65,9 
125,0 
71,0 
92,6 
87,5 
161,2 
305,2 
136,6 

Most expensive 
190,0 
210,5 
94,4 
200,7 
134,4 
227,8 
127,7 
198,4 
250,0 
230,0 
150,0 
130,0 
335,0 
200,0 
141,3 
124,4 
180,0 
186,4 
210,5 
109,1 
157,5 
123,9 
132,3 
137,5 
225,6 
391,2 
184,6 

cheapest  most expensive 

177,8
178,8
134,1
167,7
132,8
157,5
131,6
201,5
223,3
180,0
131,7
126,5
300,0
194,3
125,9
127,9
148,1
151,4
155,3
124,6
144,4
124,8
143,0
136,1
161,2
305,2
164,8 

209,2
212,9
137,3
214,2
192,9
234,9
160,9
207,8
250,0
230,0
191,0
180,0
335,0
208,0
196,3
168,9
206,4
197,2
224,2
149,5
198,0
171,6
169,2
153,1
240,7
391,2

208,9 

cheapest 
189,8
190,1
134,1
183,0
132,8
157,5
131,6
201,5
223,3
180,0
131,7
126,5
300,0
194,3
125,9
127,9
148,1
151,4
155,3
124,6
144,4
124,8
143,0
136,1
161,2
305,2
166,3 

71 

most 
expensive 

209,2
212,9
137,3
214,2
193,5
234,9
177,2
207,8
250,0
230,0
193,0
190,3
335,0
208,0
196,3
186,0
206,4
197,2
224,2
149,5
198,0
188,1
187,6
153,1
240,7
391,2

€90 and 63% 
most 
expensive 

cheapest 

€90 and 65% 
most 
expensive 

cheapest 

177,8
178,8
122,1
167,7
120,9
157,5
119,8
201,5
223,3
180,0
119,8
114,5
300,0
194,3
114,1
116,1
136,6
151,4
155,3
112,4
132,3
112,9
131,0
124,5
161,2
305,2

209,2
212,9
125,3
214,2
192,9
234,9
160,9
207,8
250,0
230,0
191,0
180,0
335,0
208,0
196,3
168,9
206,4
197,2
224,2
137,3
198,0
171,6
169,2
141,5
240,7
391,2

189,8
190,1
122,1
183,0
120,9
157,5
119,8
201,5
223,3
180,0
119,8
114,5
300,0
194,3
114,1
116,1
136,6
151,4
155,3
112,4
132,3
112,9
131,0
124,5
161,2
305,2

209,2 
212,9 
125,3 
214,2 
193,5 
234,9 
177,2 
207,8 
250,0 
230,0 
193,0 
190,3 
335,0 
208,0 
196,3 
186,0 
206,4 
197,2 
224,2 
137,3 
198,0 
188,1 
187,6 
150,7 
240,7 
391,2 

212,0 

158,9 

207,5 

160,4 

211,0 

EN 

 
  
  
  
FINE CUT TOBACCO 

Table 12 - Simulation fine cut tobacco on total average releases December 2004 for selected Member States11 

Adjustment Excise 

Adjustment TIRSP 

TIRSP

Excise  

Excise%

Minimum duty 

Minimum duty 

per 1000

per 1000 

per 1000

Belgium  

Denmark 

Greece 

Spain 

Finland 

France 

Italy 

Hungary 

Netherlands 

Luxembourg 

Germany 

Poland 

74

125

114

64

98

126

89

36

77

64

81

26

28 

61 

67 

24 

53 

75 

48 

17 

39 

23 

47 

14 

Average TIRSP: 

GAP 

between 

81

4,8

38%

49%

59%

38%

54%

59%

54%

47%

51%

36%

59%

54%

40%

2%

3%

4%

57%

19%

8%

20%

3%

3%

10%

6%

21%

€43

15

€56

28

19

32

26

4

20

3%

29

8

39

17

33

9

42

Scenario 1

40%+€43

Scenario 2

40% +€56

Scenario 3

57%+€43

Scenario 4

57%+ €56

90

125

114

83

98

126

89

62

81

84

81

55

91

2,3

103

125

114

96

98

126

97

75

94

97

89

68

99

1,9

90

135

114

83

101

126

92

62

82

84

81

55

92

2,5

103

135

114

96

101

126

97

75

94

97

89

68

100

1,9

TIRSP 

Cigarettes 

181 

200 

96 

114 

190 

238 

159 

88 

186 

141 

141 

53 

149 

4,512 

Conclusion: Scenario 2 and 4 entail the best approximation between average TIRSP for fine cut in the selected Member States as well as between 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 
12 

Member States where fine cut has a substantial market share. 
Note that Poland and Hungary did not comply with the EU minima for cigarettes. 

EN 

72 

EN 

 
  
  
  
  
  
  
 
  
 
 
 
                                                 
Table 13 - Examples of marketing of the fine-cut products. 

Brand 

Producer 

Content gr 

Equiv. max. num. of 
cigarettes 

Ratio 

sticks per 
kilogram 

PALL MALL VOLUMEN TABAK FULL FLAVOUR 
PALL MALL VOLUMEN TABAK FULL FLAVOUR 
PALL MALL VOLUMEN TABAK SMOOTH TASTE 
PALL MALL VOLUMEN TABAK SMOOTH TASTE 
PL 88 EXPANDED TOBACCO 
RONSON SPECIAL RED TOBACCO 

PL 88 EXPANDED TOBACCO 
GOLDFIELD VOLUMEN TABAK FULL FLAVOUR 
JOHN PLAYER SPECIAL RED SINGLE TOBACCO 
JOHN PLAYER SPECIAL SILVER SINGLE 
TOBACCO 
NEXT FULL FLAVOR VOLUME TOBACCO 
YUKON VOLUMENTABAK 
JOHN PLAYER SPECIAL RED SINGLE TOBACCO 
JOHN PLAYER SPECIAL SILVER SINGLE 
TOBACCO 
WEST RED SINGLE TOBACCO 
WEST SILVER SINGLE TOBACCO 
BURTON ORIGINAL STICKS TOBACCO 
BURTON SILVER STICKS TOBACCO 
CONVENT FULL FLAVOR STICKS TOBACCO 
PL 88 BLAU EXPANDED TOBACCO 
BURTON ORIGINAL STICKS TOBACCO 
BURTON SILVER STICKS TOBACCO 
FARGO 
PL 88 BLAU EXPANDED TOBACCO 
MADISON VOLUME TOBACCO 
TRUMPET VOLUME TOBACCO 
ROCCO STICKS TOBACCO 
L&M PREMIER FINE CUT 

BAT 
BAT 
BAT 
BAT 
Planta 
Japan 
Tobacco 
Planta 
TMCC 
Imperial 
Imperial 

PMP 
Pöschl 
Imperial 
Imperial 

Imperial 
Imperial 
Von Eicken 
Von Eicken 
Dingelstädt 
Planta 
Von Eicken 
Von Eicken 
Landewyck 
Planta 
Junk 
Domsky 
Domsky 
PMP 

EN 

55
80
55
80
140
60

25
70
55
55

55
70
80
80

70
70
110
110
110
110
60
60
25
25
100
60
135
140

73 

110
160
110
160
259
111

46
128
100
100

100
127
145
145

121
121
180
180
180
180
98
98
40
40
150
86
193
200

0,50 2000 
0,50 2000 
0,50 2000 
0,50 2000 
0,54 1850 
0,54 1850 

0,54 1840 
0,55 1829 
0,55 1818 
0,55 1818 

0,55 1818 
0,55 1814 
0,55 1813 
0,55 1813 

0,58 1729 
0,58 1729 
0,61 1636 
0,61 1636 
0,61 1636 
0,61 1636 
0,61 1633 
0,61 1633 
0,63 1600 
0,63 1600 
0,67 1500 
0,70 1433 
0,70 1430 
0,70 1429 

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 collected 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. 

Excise yield FC €43 (1kg =1000 sticks)

Graph a: 

300,0

250,0

200,0

150,0

100,0

50,0

0,0

BE BG CZ DK DE EE EL

ES FR IE IT

CY LV LT LU HU MT NL AT PL PT SI

SK FI

SE UK

average

Exicise yield FC €56 (1kg=1333 sticks)

Graph b: 

300,0

250,0

200,0

150,0

100,0

50,0

0,0

BE BG CZ DK DE EE EL

ES FR IE IT

CY LV LT LU HU MT NL AT PL PT SI

SK FI

SE UK

average

Excise Yield FC €60 (1kg= 1000 sticks) 

Graph c:  

€ 300

€ 250

€ 200

€ 150

€ 100

€ 50

€ 0

excise cigarettes

excise fine cut €43

excise fine-cut 2007

excise cigarettes

excise fine cut €56

excise fine cut 2007

Cigarettes €90 and 63%

Finecut €60

Finecut 2007

BE BG CZ DK DE EE EL

ES FR IE IT

CY LV LT LU HU MT NL AT PL PT SI

SK FI

SE UK

Average

EN 

74 

   EN 

 
€
 
€
 
 
Excise Yield FC €80 (1kg= 1333 sticks)

Graph d: 

€ 300

€ 250

€ 200

€ 150

€ 100

€ 50

€ 0

BE BG CZ DK DE EE EL

ES FR IE IT

CY LV LT LU HU MT NL AT PL PT SI

SK FI

SE UK

Average

TIRSP FC €43 (1kg= 1000 sticks)

Graph e: 

450

400

350

300

250

200

150

100

50

0
BE BG CZ DK DE EE EL

ES FR IE IT

CY LV LT LU HU MT NL AT PL PT SI

SK FI

SE UK

Average

TIRSP FC € 56 (1kg= 1333 sticks)

Graph f: 

450

400

350

300

250

200

150

100

50

Cigarettes €90 and 63%

Finecut €80

Finecut 2007

TIRSP cigarettes

TIRSP fine cut €43

excise fine-cut 2007

TIRSP cigarettes

TIRSP fine cut €56

TIRSP fine cut 2007

0
BE BG CZ DK DE EE EL

ES FR IE IT

CY LV LT LU HU MT NL AT PL PT SI

SK FI

SE UK

Average

EN 

75 

   EN 

 
 
€
 
€
 
Graph g: 

450,00

400,00

350,00

300,00

250,00

200,00

150,00

100,00

50,00

0,00

TIRSP FC €60 (1kg= 1000 sticks) 

BE BG CZ DK DE EE EL

ES FR IE IT

CY LV LT LU HU MT NL AT PL PT SI

SK FI

SE UK

Average

TIRSP FC €80 (1kg= 1333 sticks) 

Graph h: 

450,00

400,00

350,00

300,00

250,00

200,00

150,00

100,00

50,00

0,00

BE BG CZ DK DE EE EL

ES FR IE IT

CY LV LT LU HU MT NL AT PL PT SI

SK FI

SE UK

Average

Proportional minimum requirement

Graph i: 

90,00%

80,00%

70,00%

60,00%

50,00%

40,00%

30,00%

20,00%

10,00%

0,00%

Cigarettes €90 (and 63%)

TIRSP FC €60

TIRSP FC 2007

Cigarettes €90 (and 63%)

TIRSP FC €80

TIRSP FC 2007

% in TIRSP €32

% in TIRSP €43

% in TIRSP €56

% in TIRSP €60

% in TIRSP €80

BE BG CZ DK DE EE EL

ES FR IE IT

CY LV LT LU HU MT NL AT PL PT SI

SK FI

SE UK

Average

EN 

76 

   EN 

 
€
 
€
 
 
j. Impact on demand of fine cut: Increases in TIRSP 

TIRSP2007 

TIRSP€60 

increase 

TIRSP€80 

increase 

BE 

BG 

CZ 

DK 

DE 

EE 

EL 

ES 

FR 

IE 

IT 

CY 

LV 

LT 

LU 

HU 

MT 

NL 

AT 

PL 

PT 

SI 

SK 

FI 

SE 

UK 

99,00

89,48

43,58

132,18

117,50

25,00

106,00

86,00

130,00

310,00

102,50

88,84

81,21

63,72

83,00

31,82

116,47

100,00

97,00

38,46

106,25

88,75

69,57

98,00

206,80

309,74

123,6

123,1

82,4

132,2

122,4

25%

38%

89%

0%

4%

147,8 

147,1 

49%

64%

106,2 

144%

156,3 

146,2 

18%

24%

71,7

187%

95,3 

281%

106,0

114,2

130,0

310,0

105,6

118,0

113,0

96,6

117,6

0%

33%

0%

0%

3%

33%

39%

52%

42%

126,8 

137,4 

134,8 

310,0 

129,6 

141,0 

136,6 

120,2 

140,6 

20%

60%

4%

0%

26%

59%

68%

89%

69%

84,0

164%

108,0 

239%

116,5

117,9

114,3

0%

18%

18%

134,7 

141,7 

138,3 

16%

42%

43%

83,1

116%

107,5 

179%

126,7

122,4

98,0

107,0

206,8

309,7

19%

38%

41%

9%

0%

0%

150,9 

146,4 

121,8 

131,4 

206,8 

309,7 

42%

65%

75%

34%

0%

0%

EN 

77 

   EN 

 
  
Annex 15 – Questionnaire for data collection on cigarettes -  

DATA COLLECTION EXCISE DUTIES - QUESTIONNAIRE

MEMBER STATE: 

Please fill out packing units. 

Please fill out price categories per packing unit.

Packing 

unit  price category 

Jan Feb Mar Apr ….. 

Total 

packing unit A 

price category 1 

packing unit A 

price category 2

packing unit A 

add  price 

categories 

packing unit A 

price category x

packing unit B  

price category 1 

packing unit B 

price category 2

packing unit B 

add  price 

categories 

packing unit B 

price category x

add  packing  units 

price category 1

price category 2

add  price 

categories 

price category x

packing unit X  

price category 1

packing unit X  

price category 2

packing unit X  

add  price 

categories 

packing unit X  

price category x

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Adjusting of ad valorem and specific duties in order to reach 64 Euro on MPPC - 
Extrapolation 1 January 2006 excise rates  

Member 
State 

Original 
specific  

Original 
ad 
valorem 
% 

Original 
ad 
valorem 
in € 

Total tax 
on 
MPPC 
(original) 

% 
specific 
in total 

% ad 
valorem 
in total  

pre-
tax 

Adapted 
specific  

Adapted 
ad 
valorem 
% 

Adapted 
ad 
valorem 
in € 

Total 
tax 
original 

rel
sp
in

Bulgaria 

Cezch 
Republic 

Estonia 

Hungary 

Latvia 

Lithuania 

Poland 

Romania  

Slovakia 

Slovenia 

7,67 

20,27 

17,58 

27,45 

10,92 

13,76 

19,17 

9,1 

28,31 

13,94 

0,48 

0,24 

0,26 

0,27 

0,148 

0,15 

0,313 

0,3 

0,23 

0,427101 

29,83 

17,84 

16,29 

23,7 

4,68 

8,14 

23,37 

14,78 

20,72 

40,13 

37,5 

38,11 

33,87 

51,15 

15,6 

21,9 

42,54 

23,88 

49,03 

54,07 

20% 

53% 

52% 

54% 

70% 

63% 

45% 

38% 

58% 

26% 

80% 

47% 

48% 

46% 

30% 

37% 

55% 

62% 

42% 

74% 

14,29 

24,35 

19,24 

22,00 

11,19 

24,11 

18,66 

16,02 

26,68 

24,22 

13,09 

34,04 

33,22 

34,35 

44,80 

40,21 

28,84 

24,39 

36,95 

16,50 

0,54 

0,29 

0,31 

0,29 

0,22 

0,23 

0,35 

Na 

0,25 

0,45 

50,91 

29,96 

30,78 

29,65 

19,20 

23,79 

35,16 

39,61 

27,05 

47,50 

64 

64 

64 

64 

64 

64 

64 

64 

64 

64 

2

5

5

5

7

6

4

3

5

2

EN 

78 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
 
  
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
EN 

79 

   EN