COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products (Text with EEA relevance)
Date: 2012-12-19
Institutions: European Commission
Subjects: labelling, market approval, marketing standard, packaging, production standard, smoking, tobacco, tobacco industry

EUROPEAN 
COMMISSION 

Brussels, 19.12.2012  
SWD(2012) 453 final 

COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the approximation of the laws, regulations and administrative provisions of the 
Member States concerning the manufacture, presentation and sale of tobacco and 
related products 

(Text with EEA relevance) 

{COM(2012) 788 final} 
{SWD(2012) 452 final} 

EN 

   EN 

 
 
 
 
  
 
 
 
 
 
1. 

INTRODUCTION 

Directive 2001/37/EC of the European Parliament and of the Council on the approximation of the 
laws, regulations and administrative provisions of the Member States concerning the manufacture, 
presentation and sale of tobacco products (Tobacco Products Directive, hereafter TPD) was adopted 
on 5 June 2001.1 More than ten years have passed since the adoption and it has become necessary to 
consider  and  examine  options  to  update  the  TPD  in  line  with  market,  scientific  and 
international  developments,  in  particular  the  WHO  Convention  on  Tobacco  Control  (FCTC)  to 
which the European Union and all the Member States are Party. The initiative to revise the TPD is 
included in the Commission's Work Plan 2012.2 The overall objective of the revision is to improve 
the  functioning  of  the  internal  market,  while  ensuring  a  high  level  of  health  protection.  Thus,  the 
main objectives are (1) update already harmonised areas to overcome Member States' obstacles to 
bring their national legislations in line with new market, scientific and international developments,3  
(2)  address  product  related  measures  not  yet  covered  by  the  TPD  insofar  as  heterogeneous 
development  in  Member  States  has  led  to,  or  is  likely  to  lead  to,  fragmentation  of  the  internal 
market4  and  (3)  ensure  that  provisions  of  the  Directive  are  not  circumvented  by  placing  on  the 
market  of  products  not  complying  with  the  TPD.5    A  high  level  of  health  protection  has  been 
considered when defining and choosing between different policy options. In particular, the initiation 
of  tobacco  consumption  among  young  people  has  been  taken  into  account.  Most  of  the  measures 
concentrate, at a first stage, on factory manufactured cigarettes (FMC), roll-your-owns (RYO) and 
smokeless tobacco products (STP). 

2. 

CONSULTATION, EXPERTISE AND MARKET DESCRIPTION 

In the context of the Impact Assessment extensive public and targeted stakeholders’ consultations 
took place. The Impact Assessment also benefited from a number of external studies, opinions from 
the Commission’s independent Scientific Committee (SCENIHR) and Eurobarometer surveys.  

The  total  value  of  the  tobacco  market  at  retail  level,  including  taxes  and  excise  duties,  is  136.5 
bnEUR. FMC represent almost 90% (121.3 bnEUR) of the total tobacco market value, making up 
together with RYO close to 95% of the tobacco market. The remaining part of the market is pipe 
tobacco, cigars/cigarillos and STP. In 2010, excise duties amounted to over 79 bnEUR across the 
EU.    

Tobacco is the largest avoidable health threat in the EU, responsible for almost 700,000 deaths in 
the EU each year. The revision focuses on initiation of tobacco consumption, in particular among 
young people, taking into account that 94% of the smokers start before the age of 25.6 Around 50% 
of  smokers  die  prematurely,  on  average  14  years  earlier  than  non-smokers.  They  have  more  life 
years  characterised  by  serious  disease.  Annual  EU  public  healthcare  expenditure  on  treating  six 
main disease categories related to smoking is estimated around 25.3 bnEUR and society loses 8.3 
bnEUR per annum due to productivity losses (including early retirements/deaths and absenteeism) 
linked to smoking. In addition, if monetised, the life years lost due to smoking correspond to 517 
bnEUR every year.  

1 OJ L 194, 18.7.2001, p. 26–35 
2 http://ec.europa.eu/atwork/programmes/docs/cwp2012_annex_en.pdf 
3 Without an update, Member States cannot, for example, increase the size of the health warnings, change their location 
of the package or replace the display of tar, nicotine and carbon monoxide levels. 
4 For example, at this stage, eight Member States have adopted pictorial health warnings and the regulations of 
ingredients differ between Member States. 
5 For example, measures on cross-border distance sales and traceability will facilitate legal activity and thus prevent sale 
of tobacco products not complying with the TPD (e.g. health warnings and ingredients). 
6  Special Eurobarometer 385, 2012 : http://ec.europa.eu/health/eurobarometers/index_en.htm. 70% start below the age 
of 18 years. 

1 

 
 
 
 
 
 
                                                 
3. 

3.1. 

PROBLEM DEFINITION 

PROBLEM 1: SMOKELESS TOBACCO AND EXTENSION OF THE PRODUCT SCOPE  

a)  Smokeless tobacco products (STP) 

All STP are addictive and associated with a number of adverse health effects. New products with 
attractive  labelling  and  flavours  have  reached  the  market  aiming  to  explore  new  market 
opportunities  created  by  national  laws  prohibiting  smoking  in  public  places  (smoke-free 
environments).  There  are  divergent  views  among  stakeholders  whether  or  not  the  current  ban  on 
oral tobacco (snus) is still justified and whether or not the ban on oral tobacco should be extended to 
other STP. The role of STP in smoking cessation is disputed among stakeholders. STP can act as an 
entry gate for new tobacco consumers. 

b)  Nicotine containing products (NCP) 

Recent years have seen the emergence of new NCP (including electronic cigarettes), which are put 
on the market without any prior authorisation or control. In the absence of legislation at EU level, 
Member States have taken different regulatory approaches (ranging from no specific regulation, 
to  tobacco  legislation,  medicinal  products’  legislation  or  ban)  to  address  the  uncertainty  over  the 
contents and health effects of these products. Nicotine is a toxic and addictive substance and there 
are  also  reports  of  other  hazardous  substances  being  used  in  electronic  cigarettes.  Producers  of 
NRTs  (Nicotine  Replacement  Therapies)  expressed  concern  over  the  different  treatment  of  NRTs 
and  NCPs.  There  is  also  a  risk  of  an  increase  in  the  use  of  NCP  as  a  consequence  of  national 
legislation on smoke-free environment. Others supported that NCP have a potential role in smoking 
cessation/limitation and argued that NCP should be treated as a consumer product.  

c)  Herbal products for smoking 

Herbal products for smoking are treated differently in national legislations, which negatively affects 
cross-border trade. Combustion of these products is associated with health risks similar to those of 
traditional  FMC  although  they  do  not  have  the  same  addictive  characteristics  and  do  not  contain 
tobacco. Herbal products for smoking are often perceived as harmless or less harmful products by 
consumers. 

3.2. 

PROBLEM 2: PACKAGING AND LABELLING  

Some  of  the  current  TPD  provisions  in  the  area  of  packaging  and  labelling  are  no  longer  in  line 
with scientific evidence and commitments in the context of the FCTC. The current harmonised 
provisions of the TPD do not allow Member States to take action to protect public health and update 
their legislation in line with their FCTC commitments. For example, Member States cannot remove 
the display of tar, nicotine and carbon monoxide (TNCO) levels on the package, which are known 
to  be  misleading,  or  introduce  pictorial  health  warnings  on  both  sides  of  the  tobacco  packages, 
which have been shown to be more effective.  

Other  aspects  of  packaging  and  labelling  are  not  harmonised  in  the  current  TPD  and  national 
developments  have  led  to  discrepancies  between  Member  States.  For  example,  pictorial  health 
warnings  are  in  use  in  eight  Member  States  and  two  more  will  follow  in  2013.  Discussions  on 
standardised  packaging  are  on-going  in  a  few  Member  States.  This  situation  is  likely  to  be 
aggravated,  in  particular  when  Member  States  implement  the  FCTC.  These  divergent  approaches 
will negatively affect the internal market. 

3.3. 

PROBLEM 3: INGREDIENTS 

The use of different reporting formats makes it difficult for manufacturers, importers and Member 
States  to  fulfil  their  reporting  obligations  under  the  current  legislation  and  burdensome  for  the 
Commission to compare, analyse and draw conclusions from the data received.  

1 

 
 
 
 
 
 
 
The lack of a harmonised approach on ingredients regulation affects the functioning of the internal 
market  and  impacts  on  the  free  movement  of  goods  across  the  EU.  Some  Member  States  have 
adopted  legislation  allowing  or  forbidding  different  ingredients  given  their  potential  to  enhance 
tobacco consumption or initiation. Without harmonisation, the obstacles on the internal market are 
expected  to  increase  further  in  coming  years.  In  order  to  comply  with  their  obligations  under  the 
FCTC, Member States are likely to continue adopting rules unilaterally, in particular to address the 
attractiveness of tobacco products and considering the marketing development in recent years with 
more flavoured tobacco products being placed on the market.  

3.4. 

PROBLEM 4: CROSS BORDER DISTANCE SALES OF TOBACCO 

Cross-border internet sales of tobacco are - in most cases – illegal, taking into account that the main 
attraction  of  these  transactions  is  to  evade  taxes  and/or  circumvent  age  control.7  From  the 
perspective of the TPD cross-border internet sales implies a risk of circumvention of the safeguards 
of the Directive (e.g. obligation for a tobacco product to feature health warnings in the language(s) 
of the country of the consumer). Different legal approaches have been taken by Member States in 
this area and the legal disparities are expected to aggravate as Member States gradually implement 
FCTC. Cross-border sale has, by definition an impact on the functioning of the internal market. As 
internet  retailers  typically  offer  their  products  to  consumers  regardless  of  their  locations,  national 
solutions within the EU have no or little effect.  

3.5. 

PROBLEM 5: TRACEABILITY AND SECURITY FEATURES 

The  availability  of  products  not  complying  with  the  provisions  of  the  Directive  (e.g.  health 
warnings  and  ingredient  regulation)  undermines  the  objectives  of  the  Directive.  Measures  at  EU 
level in the area of traceability based on Article 5(9) TPD have not been taken and in their absence 
Member States are not in a position to take effective measures. There is currently no level playing 
field for economic operators on the internal market, as only the four largest tobacco manufacturers 
have concluded legally binding agreements, including provisions on tracking and tracing, with the 
EU and the Member States. Sales of illicit products mean that the consumers do not benefit from 
the safeguards introduced by the TPD. Moreover, they are not able to verify the authenticity of 
the  products  concerned.  Many  stakeholders  (tobacco  industry,  but  also  retailers)  have  voiced 
concerns that some of the discussed and intended measures in the revised TPD would increase the 
illicit trade in tobacco, although compelling evidence to that end was not submitted.  

4. 

EU BASIS TO ACT 

Article  114(1)  TFEU  empowers  the  European  Parliament  and  the  Council  to  adopt  measures  for 
the  approximation  of  the  provisions  laid  down  by  law,  regulation  or  administrative  action  in 
Member States which have as their object the establishment and functioning of the internal market. 
According  to  Article  114(3)  TFEU,  the  Commission  should  aim  to  ensure  a  high  level  of  health 
protection in its proposals envisaged in paragraph 1 of Article 114.  

As explained some areas included in the impact assessment are already covered by harmonisation 
in  the  current  TPD,  but  need  to  be  updated  in  accordance  with  scientific  and  international 
developments.  Other  areas  relevant  for  the  impact  assessment  are  subject  to  different  legal 
approaches in Member States which has led to obstacles to the free movement of goods.  

5. 

POLICY OBJECTIVES 

The  overall  objective  of  the  revision  is  to  improve  the  functioning  of  the  internal  market,  while 
ensuring a high level of health protection. The proposal aims to update already harmonised areas, 

7 Article 36 of Directive 2008/118 on excise duty of tobacco indicates that in the case of cross border sale, the excise 
duty have to be paid for in the country of destination. However, from a perspective of a consumer, cross-border 
purchase makes primarily sense when the consumer avoids the higher excise duties in the country of destination.  

2 

 
 
 
 
 
 
                                                 
thereby overcoming the obstacles for Member States in bringing their national legislations in line 
with new market, scientific and international developments. It also aims to address product related 
measures not yet covered by the TPD insofar as heterogeneous development in Member States has 
led  to,  or  is  likely  to  lead  to,  fragmentation  of  the  internal  market.  Finally,  the  proposal  seeks  to 
ensure  that  the  provisions  of  the  Directive  are  not  circumvented  by  placing  on  the  market  of 
products not compliant with the TPD. The proposal will also ensure a harmonised implementation 
of international obligations following from the FCTC, which is binding for the EU and all Member 
States, and a consistent approach to non-binding FCTC commitments, if there is a risk of diverging 
national transposition.   

The  revision  will  contribute  to  the  overall  aim  of  the  EU  to  promote  the  well-being  of  its  people 
(TEU Art. 3) and the Europe 2020 strategy. Keeping people healthy and active longer will have a 
positive  impact  on  productivity  and  competitiveness.  The  revision  also  fully  respects  the  EU 
Charter on Fundamental Rights. Whilst unintended, certain measures might also lead to increased 
tax revenues for Member States. 

Reaching  these  general  objectives  requires  the  realisation  of  the  following  specific  policy 
objectives: 

A.  

B.  

To remove obstacles to cross-border trade and ensure a level playing field for manufacturers 
and other economic operators.  
To  reduce  the  administrative  burden  for  economic  actors  and  public  authorities  due  to  the 
complexity of the current TPD and remaining disparities in legislation. 

A high level of health protection has been considered when choosing between different options. In 
this context, the revision seeks to regulate tobacco products in a way that reflects its characteristics 
as  an  addictive  product  with  proven  negative  health  consequences  linked  to  its  consumption 
(including mouth, throat and lung cancer, cardiovascular diseases including heart attacks,  strokes, 
clogged  arteries,  increased  risk  of  blindness,  impotence,  lower  fertility,  impacts  on  the  unborn 
child).  As  such  the  revision  aims  to  ensure  that  ingredients  and  packaging  do  not  encourage  or 
facilitate  smoking  uptake  by  young  people.  The  focus  on  young  people  is  also  reflected  in  the 
selection  of  the  policy  options  and  the  products  primarily  targeted  (FMC,  RYO,  and  STP).  In 
addition,  the  revision  should  create  conditions  which  allow  all  citizens  across  the  EU  to  take 
informed decisions about the products, based on accurate information on the health consequences of 
consuming  tobacco  products.  Finally,  all  smokers  should  benefit  from  the  safeguards  of  the  TPD 
(e.g.  health  warnings  and  ingredients  regulation).  In  light  of  this,  the  following  main  health 
consideration was taken into account when comparing and choosing between different options:  

C. 

6. 

To provide a high level of protection to citizens throughout the EU. 

POLICY OPTIONS 

A substantial number of policy options were considered in the revision. Some measures originally 
foreseen (e.g. asking the tobacco industry to contribute to health care costs as well as measures to 
introduce age verification mechanisms in all tobacco vending machines and common provisions on 
display of tobacco at point of sale) have been dropped.  

For  policy  area  “STP  and  extension  of  the  product  scope”  (i.e.  NCP  and  herbal  products  for 
smoking)  the  options  ranged  from  no  change  to  regulating  the  products  under  the  TPD  (health 
warnings/ingredients),  or  phasing  out  the  products  (herbal  products  for  smoking).  In  the  area  of 
STP, lifting the current ban on oral tobacco was also assessed and in the area of NCP, setting up a 
new authorisation system or using the current medicinal products’ framework were analysed.   

Within the policy area “packaging and labelling” policy options included no change, introduction 
of  bigger  and  mandatory  pictorial  warnings,  plus  prohibition  of  promotional  and  misleading 

3 

 
 
 
 
 
 
 
 
 
  
elements or introduction of full plain packaging. The measures exempt tobacco products other than 
FMC  and  RYO  (i.e.  cigars,  cigarillos,  pipe  tobacco  and  STP)  from  some  provisions,  but  this 
exemption  should  be  removed  if  there  is  a  substantial  change  of  circumstances  (in  terms  of  sales 
volume or prevalence level among young people). 

In  the  policy  area  “ingredients”  the  policy  options  included  mandatory  or  voluntary  reporting  in 
either  different  formats  or  based  on  a  common  electronic  format.  Various  options  in  relation  to 
content regulation were also assessed, including regulating additives with attractive, addictive and 
toxic  properties,  prohibit  products  with  characterising  flavours  and  with  increased  toxicity  or 
addictiveness  or  ban  all  additives  not  essential  for  manufacturing.  The  measures  exempt  tobacco 
products  other  than  FMC,  RYO  and  STP  (i.e.  cigars,  cigarillos  and  pipe  tobacco)  from  some 
provisions, but this exemption should be removed if there is a substantial change of circumstances 
(in terms of sales volume or prevalence level among young people). 

In  the  policy  area  “cross-border  distance  sales”,  options  range  from  no  change  to  introducing  a 
notification obligation or prohibiting cross-border distance sales of tobacco.  

Finally,  the  policy  area  “traceability  and  security  features”  includes  options  from  no  change  to 
the  introduction  of  an  EU  tracking and  tracing  system  with  or  without  security  features.  Tobacco 
products other than FMC and RYO would be granted a transitional period.  

7. 

7.1. 

COMPARING THE OPTIONS AND PREFERRED OPTION 

SMOKELESS TOBACCO PRODUCTS AND EXTENSION OF THE PRODUCT SCOPE  

a)  Smokeless tobacco products (STP) 

Lifting  the  ban  of  oral  tobacco  (snus)  and  subject  STP  to  stricter  rules  on  labelling  and 
ingredients would remove the current differential treatment between different categories of STP. In 
economic terms, this option is expected to result in a significant growth for oral tobacco, while sales 
in other STP are expected to decrease. Economic actors would be faced with some compliance costs 
to adapt to the regulations on labelling and ingredients, but a harmonised approach at EU level is 
expected  to  be  advantageous  compared  to  consecutive  changes  by  Member  States.  As  regards 
health, the degree of harm from oral tobacco is currently being debated, but the overall conclusion 
is  that  oral  tobacco  is  an  addictive  product  with  adverse  health  effects.  There  is  no  compelling 
evidence that lifting the ban on oral tobacco would lead to reduced smoking prevalence and it has 
been suggested that the product can play a role in uptake of tobacco consumption (gateway) or be 
used in combination with FMC (dual use), in particular in places where smoking is not allowed.     

Maintaining  the  ban  of  oral  tobacco,  subjecting  all  novel  tobacco  products  to  a  notification 
obligation and all STP to stricter labelling and ingredients regulation (i.e. health warnings on 
both sides of the packages and a ban of STP with characterising flavours) is the preferred option. 
This  option  would  provide  a  common  framework  for  STP  in  terms  of  ingredients  and  labelling 
while keeping the current ban on oral tobacco untouched. The introduction of a notification system 
for novel tobacco products would also contribute to increasing the knowledge base as regards these 
products  for  the  purpose  of  possible  future  amendments  to  the  Directive.  The  preferred  option  is 
well in line with FCTC guidelines on ingredients and labelling. Maintaining the ban on oral tobacco 
is considered to be the only effective measure to contain the use of this product and discourage the 
uptake of STP and nicotine addiction among non-smokers and by young people. As other STP have 
still  very  small  markets  in  the  EU  and  their  growth  potential  is  limited  banning  products  with 
characterising flavours and making health warnings more visible is considered proportionate.  

Maintaining the ban of oral tobacco, restrict the sale of other STP to areas of traditional use 
only and subject all STP to stricter labelling and ingredients rules  (i.e. health warnings on both 
sides  of  the  packages  and  a  ban  on  STP  with  characterising  flavours)  would  allow  for  equal 

4 

 
 
 
 
 
 
 
 
 
treatment of all STP and provide a high level of health protection, but considering the more limited 
growth  potential  of  STP  other  than  oral  tobacco,  at  this  stage,  this  option  was  discarded  mainly 
because it was considered unnecessarily strict.   

An  even  more  far  reaching  option  would  have  been  to  ban  all  STP  with  the  exception  of  oral 
tobacco  in  Sweden,  which  would  have  to  respect  stricter  labelling  and  ingredients  rules  and 
without allowing Member States to exempt products for traditional use. This option was discarded 
as it was considered disproportionate. 

b)  Nicotine containing products (NCP)  

Regulating  NCP  under  the  TPD  could  contribute  to  improving  the  safety  of  these  products. 
However, this option does not correspond to the current regulatory development in Member States, 
based on the function of these products.  

Setting up of a separate authorisation scheme for NCP would imply high administrative costs for 
national authorities, involve complex considerations in terms determining the criteria to be used in 
the evaluation and imply a risk of overlap with the pharmaceutical framework.  

Subjecting  those  NCP  which  fall  above  a  predetermined  nicotine  threshold  to  the  medicinal 
products’  legislation  and  allowing  the  remaining  NCP  to  be  sold  as  consumer  products 
provided  they  feature  health  warnings  is  the  preferred  option.  It  would  remove  the  current 
differential  treatment  between  NCP  and  Nicotine  Replacement  Therapies  (NRT),  increase  legal 
certainty  and  consolidate  the  on-going  development  in  Member  States  based  on  the  function  of 
these  products.  Authorised  products  could  circulate  freely  in  the  EU,  others  only  if  their  nicotine 
content  is  below  the  identified  threshold  and  they  comply  with  the  labelling  rules.  The  option 
encourages R&D in smoking cessation with the aim of maximising health gains.  

Subjecting all NCP to medicinal products’ legislation is the most stringent option identified, but 
this option was rejected for proportionality reasons.  

c)  Herbal products for smoking  

Regulating  herbal  products  for  smoking  under  the  TPD  (labelling  requirements)  is  the 
preferred  option.  It  would  contribute  to  a  homogenous  development  in  the  EU  facilitating  free 
circulation, provide a common safety net for consumers and address the misleading potential of the 
products. 

Phasing out the marketing of herbal products for smoking would be most beneficial from a health 
perspective,  but  result  in  a  negative  impact  on  the  economic  stakeholders  involved.  The  solution 
was  discarded  mainly  because  it  would  not  be  proportionate,  taking  into  account  that  the  main 
concern relates to the misperception about adverse health effects. In addition herbal products do not 
present the same characteristics in terms of addictiveness as traditional cigarettes or other nicotine 
containing products.  

7.2. 

PACKAGING AND LABELLING 

Introducing bigger and mandatory pictorial warnings on both sides of tobacco packages would 
bring coherence to the currently fragmented situation (picture warnings are already in use in eight 
Member  States  and  two  more  will  follow  from  2013),  be  in  line  with  international  commitments 
(FCTC),  and  facilitate  cross-border  trade.  The  adoption  of  EU  wide  measures  would  lead  to  cost 
savings  for  the  industry  compared  to  the  current  situation  where  the  industry  has  to  adapt 
consecutively to many different legal systems. From a health point of view, bigger and mandatory 
pictorial  warnings  would  increase  awareness  about  the  negative  health  consequences  of  tobacco 
consumption in all EU Member States (while now consumers in the Member States that use picture 
and  text  health  warnings  are  better  informed  than  consumers  in  the  countries  that  only  use  text 

5 

 
 
 
 
 
 
 
 
 
 
 
 
warnings), motivate behavioural change, and prevent smoking initiation, in particular among young 
people.  

Introducing bigger and mandatory pictorial warnings and in addition prohibiting promotional 
and misleading elements is the preferred option. This would further advance the functioning of 
the  internal  market  and  imply  cost  savings  compared  to  multiple  national  changes.  This  option 
would  also  reinforce  the  positive  impacts  on  health  by  increasing  further  awareness  about  the 
product and its health related consequences. It would also contribute to discouraging, in particular 
young  people,  from  taking  up  smoking.  Member  States  would  remain  free  to  introduce  plain 
packaging, as far as this is compatible with the Treaty.  

Introduction of plain packaging at EU level would maximise the effects on the internal market and 
further  reduce  compliance  costs  for  the  industry.  This  option  would  provide  the  most  positive 
impact from a health point of view. However, given the current lack of real life experience in the 
EU, pending legal disputes and concerns expressed by some stakeholders, it appears preferable to 
choose  a  less  stringent  option  at  this  stage  and  report  on  this  issue  5  years  after  transposition  to 
assess developments.  

7.3. 

REPORTING AND REGULATION OF INGREDIENTS 

Introducing  a  mandatory  reporting  in  harmonised  electronic  format  would  ensure  a  level 
playing  field,  facilitate  analysing  and  monitoring  of  data  and  provide  cost  savings  for  industry 
compared to the current fragmented situation with different reporting formats in Member States.  

Obliging  Member  States  to  regulate  toxic,  addictive  and  attractive  additives  in  tobacco 
products  would  provide  Member  States  with  limited  guidance  and  only  result  in  limited  positive 
impacts  on  the  internal  market.  For  economic  stakeholders,  the  measure  would  lead  to  legal 
uncertainty and only limited cost savings compared to the current situation where the industry has 
to adapt to different national measures. This option is not expected to have any significant impact 
on smoking initiation.   

Prohibiting  tobacco  products  with  characterising  flavours  and  with  increased  toxicity  or 
addictiveness  is  the  preferred  option.8  This  option  would  prevent  a  patchwork  of  national 
regulations and facilitate cross-border trade. The option would also imply a cost saving compared to 
the current situation where more and more multiple national changes can be expected. This option 
does  not  prohibit  the  use  of  all  additives,  but  focus  on  products  that  have  characterising  flavours 
(e.g. vanilla  and  chocolate), as well as  additives associated with energy and  vitality (e.g. caffeine 
and taurine), or additives creating the impression that products have health benefits (e.g. vitamins). 
The number of affected products would be limited as well as the effects for the farmers, including 
those involved in Burley and Oriental growing, as this option does not regulate additives which are 
essential  for  the  manufacture  of  tobacco  products.  This  option  would  contribute  to  discouraging 
young people (attracted by flavoured products) from taking up smoking. Test panels will assist in 
the decision making process. The option also allows for further measures when scientific advances 
on toxicity and addictiveness arise.  

Prohibiting  all  additives  not  essential  for  manufacturing  would  constitute  the  most  stringent 
option.9  This  option  would  further  improve  the  internal  market  and  similarly  to  the  option  of 
prohibiting products with characterising flavours, could result in economies of scale. However, the 
measure  would  remove  most  additives,  even  those  used  in  smaller  quantities  that  do  not  give 
products  a  distinctive  taste.  Therefore  this  option  would  affect  practically  all  products  on  the 
market, requiring reformulations and possibly leading to product withdrawals. Burley and Oriental 
tobacco growers could be particularly affected as more additives are used in the manufacturing of 

8 This option is similar to the current US approach. 
9 This option is similar to the Canadian and Brazilian approaches. 

6 

 
 
 
 
 
 
 
 
 
                                                 
tobacco products using these types of tobacco varieties. In terms of health, this option would further 
reinforce the effect on consumption/prevalence, but not to the extent justifying the additional costs. 

7.4. 

CROSS-BORDER DISTANCE SALES 

The  preferred  option  is  to  regulate  cross-border  distance  sales  in  terms  of  notification 
obligations and age verification mechanisms. This option is expected to ensure better compliance 
with  TPD  and  improve  the  situation  for  retailers  engaged  in  legal  activities,  while  continuing  to 
allow purchasing of products not available in all Member States. Age verification and higher prices 
(legal  sale)  are  expected  to  have  a  positive  impact  on  prevalence/consumption.  Setting  up  the 
system would imply some limited additional costs for national administrations, but these costs are 
considered proportionate considering the positive impacts on legal sales and reduced consumption. 
The costs are also largely compensated by improved enforcement possibilities. 

A  prohibition  of  cross-border  distance  sale  would  address  the  current  distortions  and  facilitate 
traditional retailers to carry out their legal activity. It would also make it easier for Member States 
that have adopted stricter rules to enforce these and it would further reinforce the effect of the TPD 
by  preventing  purchasing  of  products  not  complying  with  the  Directive.  On  the  other  hand,  this 
option  would  fully  remove  one  of  the  sales  channels.  Given  that  better  compliance  with  the  TPD 
can be achieved with an alternative less strict option, a full prohibition of cross-border distance sale 
was not considered necessary.  

7.5. 

TRACEABILITY AND SECURITY FEATURES 

An  EU  wide  tracking  and  tracing  system  would  ensure  a  homogenous  approach,  which  means 
significant cost savings for industry and the creation of a level playing field for all operators on the 
internal  market.  It  would  also  reinforce  the  effects  of  the  TPD  in  terms  of  health  warnings  and 
ingredients  regulation,  by  reducing  the  availability  of  illicit  and  non-compliant  products.  Taking 
into account that a large  part of  the market already has contractual obligations to have a  tracking 
and tracing system in place, the compliance costs for the industry are expected to be proportionate, 
even  if  one  considers  that  data  storage  should  be  outsourced  to  an  independent  third  party.  The 
measure  is  expected  to  contribute  to  a  drop  in  consumption  following  increased  awareness  and 
reduced availability of cheap illicit FMC and RYO. A tracking and tracing system which gives the 
authorities  access  to  the  data  storage  of  the  independent  third  party,  will  help  the  authorities 
(including the Commission) to monitor systematically the movement of tobacco products from the 
place  of  their  manufacture,  through  the  distribution  chain  to  the  intended  market  of  retail  sale 
("tracking”). 

An EU wide tracking and tracing system, complemented by security features is the preferred 
option.  The  option  would  maximise  the  effect  of  the  TPD,  facilitate  market  surveillance  and 
empower consumers in verifying the authenticity of products. It also addresses the (unsubstantiated) 
concerns of some stakeholders who claim that revision of the TPD would result in an increase in 
illicit trade. 

7.6. 

7.6.1. 

OVERALL CONCLUSION OF THE IMPACTS 

Overview of preferred options 

Following  the  conclusions  in  previous  section,  the  table  below  gives  an  overview  of  the  policy 
options as well as justifications for choosing the preferred options (which are marked in grey). 

PA / Options 

1 

2 

3 

4 

Justification 

1a. STP 

Lift the ban 
on oral 
tobacco and 
subject all 

Maintain the 
ban on oral 
tobacco, subject 
all novel tobacco 

Maintain the 
ban on oral 
tobacco, restrict 
the sale of other 

Ban all STP with 
the exception of 
oral tobacco in 
Sweden. Subject 

-harmonised labelling and ingredients 
regulation for all STP.  
-facilitated level playing field. 
-proportionate  to prevent the 

7 

 
 
 
 
 
 
  
STP to 
stricter 
labelling and 
ingredients 
regulation 

products to  
notification 
obligation and 
all STP to 
stricter labelling 
and ingredients 
regulation 

STP to areas of 
traditional use 
only and 
subject all STP 
to stricter 
labelling and 
ingredients 
regulation. 

oral tobacco in 
Sweden to stricter 
labelling and 
ingredients 
regulation.   

1b. NCP 

Establish a new 
authorisation 
scheme for NCP 

Subject NCP 
to labelling 
and 
ingredients 
requirements 
under TPD 

Subject all NCP 
to  the medicinal 
products' 
legislation 

Subject NCP 
over a certain 
nicotine 
threshold to 
the medicinal 
products' 
legislation and 
the remaining 
NCP to 
labelling 
requirements 

introduction / expansion of new 
addictive, harmful products in the 
internal market  
-health concerns with all STP  
-no evidence that STP leads to 
smoking cessation, risk of entry gate 
and dual use 
-risk for market development 
(ingredients and smoke-free 
environments)  
-Trade-off/ impact on SME justified 
due to health risks associated with 
product development, marketing and 
expansion to new user groups. Option 
3 and 4 would have more positive 
impact on health, but option 2 was 
considered more proportionate after a 
cost/benefit balance.   
-clear and well established legal 
framework for risk/benefit analysis 
facilitating the free circulation of duly 
authorised products, in conformity 
with their nature 
-possibility of mutual recognition 
within the internal market.  
-same treatment of NCP and NRT.  
-harmonised approach, consolidating 
trend in MS 
-minimum safety standard 
-potential in smoking cessation 
Trade-off: additional burden for 
application justified by the setting up 
of a harmonised safety net with 
potential to reduce smoking.   

PA / Options 

1 

2 

Justification 

1c. Herbal 
products for 
smoking 

Subject all herbal products for 
smoking to labelling 
requirements under TPD 

Phase out marketing of herbal 
products for smoking 

-facilitates the free circulation of 
products 
-remove current misperception on 
health 
- Trade-off: Removes misperceptions 
while minimising compliance costs. 

PA / Options 

1 

2 

3 

Justification 

2. Packaging 
and labelling 

Mandatory enlarged 
picture warnings 

Option 2 plus full plain 
packaging   

Mandatory picture 
warnings (option 1)  
plus harmonise 
certain aspects of 
packets and FMC 
appearance and 
prohibit promotional 
and misleading 
elements 

-removes disparities on internal 
market and facilitates free circulation 
-improves awareness and removes 
misleading elements 
-in line with FCTC commitments 
-proportionate: focus on smoking 
initiation, products attractive for 
young people 
-takes into account economic 
stakeholders’ concerns (e.g. no plain 
packaging/interference with 
trademarks) 
-allows awaiting international and 
scientific developments 
-allows Member States to adopt plain 
packaging  to comply with FCTC 
guidelines as far it is compatible with 
the Treaty 
-Trade-off: Option 3 more effective 
from health point of view, but 
appropriate to wait for real life 
experience.  

8 

 
 
 
 
 
 
 
3. 
Ingredients 

Common reporting 
format on a 
voluntary basis. 
Prohibit toxic, 
addictiveness and 
attractive additives 
in tobacco products. 

Mandatory reporting 
in harmonised format. 
Prohibit products 
with characterising 
flavours and products 
with increased toxicity 
and addictiveness. 

Mandatory reporting in 
harmonised format. 
Prohibit all additives not 
essential for 
manufacturing.   

-removes disparities on the internal 
market and facilitates free circulation 
-reduces administrative burden 
(reporting) 
-in line with FCTC 
obligations/commitments 
-proportionate: focus on smoking 
initiation, products attractive for 
young 
-takes into account stakeholders 
concerns, including growers (no 
discrimination of Burley/Oriental) 
Trade-off: Focus on smoking 
initiation while minimising costs for 
economic stakeholders. Option 3 
would have been more effective from 
a health point of view.  

PA / Options 

4. Cross-
border 
distance sale 

5. 
Traceability 
and security 
features 

1 

2 

Justification 

Notification and age verification 
system  

Prohibit cross-border distance sale of 
tobacco products 

EU tracking and tracing system 

Tracking and tracing system, 
complemented by security features  

-ensures that safeguards of the TPD 
are respected 
-facilitates legal activities (retail) -
limited economic impact on legal 
activity 
Trade-off: Option 2 would have been 
more effective from a health point of 
view, but more costly for industry. 

-ensures that safeguards of the TPD 
are respected 
-level playing field (small-big 
industry) 
-costs compensated by savings 
following shift from illegal to legal 
trade 
-addresses economic stakeholders’ 
concerns regarding illicit trade 
Trade-off: Costs for industry are 
outweighed by benefits from reduced 
illicit trade. 

In terms of effectiveness, the combined preferred options contribute to the overall objective of the 
revision of the TPD to guarantee a proper functioning of the internal market while ensuring a high 
level of public health protection. As far as the internal market is concerned, all options: 

• 

facilitate  the  free  movement  of  goods  in  the  internal  market  by  removing  existing  or 
expected discrepancies between national legislations, and/or,  

•  adapt the level of harmonisation in the current TPD to a new level warranted by scientific 

development or international obligations/commitments, and /or, 

•  ensure  that  the  safeguards  of  the  TPD  are  not  undermined  by  illicit  products  or  by  cross-

border sales not respecting these safeguards. 

As far as health is concerned, the envisaged revision focuses on discouraging young people from 
taking up smoking, but would also allow adult consumers to take informed decisions. The revision 
would also allow smokers to benefit from the protective measures set by the TPD.  

The  combined  preferred  options  are  cost-efficient  in  the  sense  that  they  are  expected  to  result  in 
overall  socio-economic  benefits  for  society.  For  economic  stakeholders,  the  preferred  options  are 
foreseen to lead to reduced direct (compliance) costs which may, however, be outweighed by lost 
revenues due to a decrease in consumption.  

9 

 
 
 
 
 
 
 
 
 
 
The  identified  options  constitute  a  coherent  approach  consistent  with  international  commitments 
and fundamental rights and values as well as the overall aim of the EU to promote well-being of its 
people (Article 3 TEU).  

7.6.2. 

Overall impacts 

It  is  expected  that  the  combination  of  the  preferred  policy  options  will  lead  to  a  reduction  of 
consumption of around 2% within a five year period beyond the baseline for FMCs and RYO. This 
corresponds to a reduction of 2.4 million smokers in the EU.  

The impacts on economic stakeholders of complying with the preferred options (direct costs) are 
expected to be positive compared to the baseline scenario. On the other hand, the indirect impacts 
following from an expected decrease in consumption will lead over time to a loss of revenue for the 
FMC  and  RYO  manufacturers  of  around  376  mEUR.  This  negative  impact  on  FMC  and  RYO 
manufacturer might outweigh the benefits from the cost savings in terms of direct costs. However, 
money  not  spent  on  tobacco  is  expected  to  be  spent  on  other  sectors  which  in  turn  benefit 
economically from increased expenditure.  

In  terms  of  employment  it  is  estimated  that  jobs  lost  in  tobacco  will  be  off-set  by  jobs  in  other 
sectors  and  that,  overall,  the  measures  will  lead  to  a  net  gain  in  employment  estimated  to  around 
2,200 jobs. Possible regional employment impacts, as well as the specific situations of SMEs and 
micro-enterprises, have been carefully considered when formulating the preferred options.   

The  main  benefit  for  Governments  following  the  drop  in  consumption/prevalence  is  the 
improvement  of  health  which  is  a  value  in  its  own  right.  The  expected  socio-economic  benefits 
(reduction  of  health  care  costs,  productivity  losses  and  monetised  life  years  saved)  represents  an 
annual amount to the EU of around 9.4 bnEUR even if one deducts reduced tax revenues. The table 
below provides a breakdown of the overall net costs and benefits.  

On the other hand, social discounting allows comparison of benefits and costs that occur at different 
times  based  on  the  rate  at  which  society  is  willing  to  make  such  trade-offs.10  This  is  particularly 
relevant in the case of tobacco control as some of the expected benefits will only develop over time 
whilst  certain  impacts  (e.g.  on  tax  revenues)  would  materialise  earlier.  Under  the  most  likely 
scenario (i.e. when decrease in tax revenues and health care/absenteeism savings materialise in the 
period of 5 years, while on average the benefits from reduced premature mortality accrue only in 25 
years), the annual net benefit of a reduction in tobacco consumption by 2 % would be 4 bnEUR. 

Figure 1: Overall net costs and benefits (m EUR)  

Different percentage reduction in tobacco consumption 
5% 
3% 
1% 

2% 

4% 

Decrease in excise tax revenues11 
Decrease in health care expenditures  
Decrease of productivity loss  
     - due to early retirement / deaths 
     - due to absenteeism 
Decrease in premature mortality costs  
Overall net benefit 
Discounted values 

794
253
83
61
22
5,167
4,709
2,016

1588
506
165
122
43
10,334
9,417
4,032

2382 
759 
248 
183 
65 
15,501 
14,126 
6,048 

3176
1012
331
244
87
20,669
18,836
8,064

3970
1265
413
305
108
25,836
23,544
10,080

10 Social discounting renders benefits and costs that occur in different time periods comparable by expressing their 
values in present terms based on the rate at which society is willing to make such trade-offs. 
11 Disregarding measures taken against illicit trade and possibility to increase tax levels. 

10 

 
 
 
 
 
 
 
 
  
                                                 
8. 

MONITORING AND EVALUATION 

The following measures will ensure effective implementation of the revised TPD:  

•  Transposition meetings between the Commission and Member States. 
•  Setting up an implementation plan.  
•  Monitoring of a number of indicators relevant for the objective of the proposal.  
•  Setting up a network of Member States to discuss the implementation of the revised TPD. 
•  Commission Report on the implementation of the Directive five years after transposition.    

11