Esta es la versión HTML de un fichero adjunto a una solicitud de acceso a la información '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)4326359 
 
Ares(2018)3862993 
 
MEETING REPORT 
1. Subject 
Directive 2011/64/EU 
2. Date and Place 
18 July 2018, Brussels  
3. Participants 
DG TAXUD:  
 
DG SANTE: 
  
Al Fakher Tobacco Factory: 
 
 
4. Summary of the discussion 
Al Fakher, requested a meeting to provide more information about the water-pipe tobacco 
category, including the levels of illicit trade and counterfeit, volumes and user profile.  
Al Fakher is one of the largest water-pipe tobacco producers and is active in the majority 
of the EU Member States. They recently opened a factory in Poland. Al Fakher produces 
water-pipe tobacco from tobacco leaves with low nicotine content, grown in Poland, 
Germany and France. Water-pipe tobacco consists for a large part (70-85%) from other 
substances (glycerine, flavours) than tobacco. Water-pipe tobacco is consumed at home 
or in lounges, depending on the market. Internet sales and home production of water-pipe 
tobacco are low. Some states in the US decided to license the lounges as they might 
contribute to the high level of illicit trade.Water-pipe tobacco is currently classified as 
'other smoking tobacco' in Directive 2011/64/EU and the tax rates applies to the total 
weight of the product, including other substances than tobacco.  
Al Fakher is of the opinion that this relatively high tax rate is responsible for the high 
level of illicit trade. They estimate that 60 to 70% of the water-pipe tobacco consumed in 
the EU is illegally imported or manufactured. The retail selling price of the products 
differ from 3.05 euro for a package of 50 grams in Germany to 8.75 euro in France and 
14.40 euro in Cyprus. Al Fakher estimates that the level of illicit trade substantially 
increases in a country if the tax rate is higher than 40 euro per kilogram. 
 
 
Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111 

According to Al Fakher, a separate category for water-piper tobacco in Directive 
2011/64/EU would help to reduce the incentive for illicit trade. They assume that 
Member States will set a lower rate for water-pipe tobacco if the Directive allows setting 
a separate rate only applying to water-pipe tobacco. Moreover, they expect that a part of 
the industry which is currently operating illegal will move to the legal market because the 
incentive would be reduced. DG TAXUD noted that in COM 2018 (17) Report from the 
Commission to the Council on Directive 2011/64/EU on the structure and rates of excise 
duty applied to manufactured tobacco, the Commission concluded that the available data 
on water-pipe tobacco is too limited and unreliable to support a major tax reform. 
Al Fakher emphasises that the users of water-piper tobacco cannot be compared with 
cigarettes smokers. The amount of nicotine by the consumption of the two products is 
also very different. Consuming water-pipe tobacco is more about the 'experience' and not 
so much about the consumption of a tobacco product. Al Fakher is therefore looking into 
alternatives for tobacco, which offer the same experience but without the harmful 
substances, similar to 'heated tobacco products'. Some of the herbal products without 
tobacco are also taxed in Member States, due to Article 2, paragraph 3 of Directive 
2011/64/EU, which states that 'products consisting in whole or in part of substances 
other than tobacco but otherwise confirming to the definitions of a cigarette, 
cigarillo/cigar or other smoking tobacco
'. Al Fakher believes this part of the Directive is 
redundant and should be removed as the products have no link to tobacco products.  
Finally, Al Fakher is of the opinion that, if a separate tax category for water-pipe would 
be created, the risk of the development of borderline products is low because of the 
specific characteristics of water-pipe tobacco. 
Al Fakher agreed that the minutes of this meeting and their contact details would be 
shared with DG OLAF because of their interest in combatting illicit trade. 
 
 
 
Report by: 
 
c.c.: 
, TAXUD LIST C2 
 (DG SANTE)