Dies ist eine HTML Version eines Anhanges der Informationsfreiheitsanfrage 'Contacts with the tobacco industry during 2018'.



Ref. Ares(2019)797238 - 11/02/2019
EUROPEAN COMMISSION 
DIRECTORATE-GENERAL  
TAXATION AND CUSTOMS UNION 
Indirect Taxation and Tax administration 
Indirect taxes other than VAT 
 
 
Brussels, 
taxud.c.2(2018)4285295 
 
Ares(2018)3826051 
 
MEETING REPORT 
1. Subject 
Directive 2011/64/EU 
2. Date and Place 
17 July 2018, Brussels  
3. Participants 
DG TAXUD: 
  
Imperial Brands: 
 
Altadis: 
 
 
4. Summary of the discussion 
Imperial Brands requested a meeting to present their view concerning Directive 
2011/64/EU (the Tobacco Excise Duty Directive).  
Imperial Brands will be participating in the Open Public Consultation (OPC) and make 
use of the possibility to upload an additional position paper. Imperial Brand mentioned 
that it is difficult to presents views from an EU perspective in the OPC because the 
situation depends on the market. 
Minimum rates 
 
Imperial Brands and Altadis are of the opinion that the minimum rates for fine cut 
tobacco and cigarettes should remain as they are. The prices have increased over the years 
which already make the products less affordable. In particular countries which were 
granted a transitional period would be affected by an increase, while in these countries 
(for example Bulgaria) cigarettes are the least affordable in the EU. If the decision is 
taken that the minimum rates should be increased, it would be desirable if the inflation 
rate is taken as an indicator. In general, in case of an increase, industry would be in 
favour of fixed calendar with increases so it is predictable.   
 
Concerning the gap between cigarettes and fine-cut tobacco, Imperial Brand and Altadis 
highlighted that no changes should take place because of the 'buffer function' of fine cut 
tobacco. However the fine-cut tobacco is a market on itself with its' own characteristics 
 
 
Commission europĆ©enne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIƋ - Tel. +32 22991111 

and consumers, it also attracts cigarettes consumers who are looking for a cheaper 
alternative. Imperial Brands and Altadis emphasized that the consumers have moved to 
illicit trade already in countries where the tax gap between cigarettes and fine-cut tobacco 
does not exist or has shrunk.  
Structure 
 
Imperial Brands and Altadis suggest removing the minimum requirement that the excise 
duty should represent at least 60% of the Weighted Average retail selling Price (WAP). 
They believe this requirement became redundant because most Member States benefit 
from the 'escape clause' and levy an excise duty above 115 Euro per 1000 cigarettes 
without respecting the 60% requirement. The mixed structure should remain for reasons 
of principle and because it guarantees the revenue for governments and limits competitive 
distortions created by purely specific systems which target the 'lower-priced' brands. 
Instead, Imperial Brands believes that the percentage of specific excise duty as part of the 
total tax burden, which is currently 76.5% should be lowered whilst a high ad-valorem 
duty could be preserved. 
 
Next generation products 
 
Imperial Brands disagrees with the terminology 'e-cigarettes' and rather speaks about e-
vapour products. These products could contain nicotine but not necessarily. Even in case 
the products contain nicotine, the nicotine does not have to be derived from tobacco. 
Imperial Brands uses pharmaceutical grade nicotine for their liquids to guarantee a high 
quality. None of their products are medically licensed. In principle, the position of 
Imperial Brands is that these products should not be taxed because people use them to 
quit smoking or to smoke less. If a harmonised tax would have to be introduced, this 
should take place in a separate directive. Imperial Brands believes that there is no 
connection between non-nicotine containing e-cigarettes and tobacco products and sees 
no reason to include these products in a directive such as Directive 2011/64/EU. This is 
also a matter of principle. Moreover, national taxes have created illicit trade, induced to 
self-made liquids and Imperial Brands mentioned that the effect of a harmonised tax 
could be similar. They suggest considering introducing a 0% minimum harmonised rate 
to start for nicotine containing products only.  
 
Heat-not-burn products 
 
Imperial Brands believes that a range of novel products (the 'heat-not-burn' category) 
should be covered by Directive 2011/64/EU because these products contain tobacco 
which could be smoked. These products should be categorised according to similar 
products. Currently, in most cases the applied rates by Member States are the rates for 
other smoking tobacco which is not necessarily correct in particular for those that 
resemble to cigarettes and can be smoked directly without any manipulation, according to 
Imperial Brands. These rates are applied according to the weight. Imperial Brands 
believes the current rates are too low for those that could be assimilated to cigarettes. In 
particular taking into account that these are premium products, Imperial Brands believes 
that these products are higher tax burden would be bearable for this product category and 
should be applied. Guidance for Member States is needed and a possible revision of 
Directive 2011/64/EU is the opportunity for this. 
 
Minimum Excise Duty 
 



Imperial Brands and Altadis mentioned that the Minimum Excise Duty (MED) needs to 
be clarified. Some Member States apply a total tax including VAT, while others are not. 
Moreover, there is no guidance in the directive at which level the MED can be fixed. In 
some Member States the Most Popular Price Category (MPPC) is still used as a reference 
which leads to the situation that almost all products on the market are taxed according to 
the MED and the system is practically purely specific of nature.  
 
Definitions 
 
Finally, Imperial Brands believes clarification of 'smoking' and 'smoking tobacco' (ECJ 
Eko-Tabak C-638/15) is needed. In particular distinguishing between raw tobacco and 
smoking tobacco leads to problems in the markets.  
 
 
 
Report by: 
 
c.c.: 
, TAXUD LIST C2