Kavala: Growers in northern Greece watched the Commission table two tobacco proposals on 16 July 2025 and have been waiting on capitals ever since. Fourteen months later the file still sits in Council, where tax measures need every government to say yes.
The first proposal rewrites the tobacco taxation directive, untouched since 2011. Minimum excise rates have not moved while prices and incomes diverged sharply across the bloc, producing a spread wide enough to make cross-border buying routine and smuggling profitable. The Commission wants higher floors and a structure that indexes them, so the gap stops reopening every few years.
Scope matters as much as rates. The current directive covers cigarettes, cigars, cigarillos and smoking tobacco. The revision pulls in electronic cigarette liquids, nicotine pouches, other nicotine products, chewing and nasal tobacco, and raw tobacco. Those categories grew into a substantial market with almost no harmonised treatment, which left member states inventing national rules and companies arbitraging the differences.
The second proposal is the one finance ministries argue about hardest. The Tobacco Excise Duty Own Resource, known as TEDOR, would take a uniform call rate of fifteen per cent on quantities released for consumption, calculated against the minimum excise rate applicable in each country, and route it to the Union budget. The Commission estimates roughly 11.2 billion euros a year.
That figure explains the resistance. Tobacco revenue currently belongs to national treasuries, and several governments treat it as a reliable line they will not hand over. Others object to the principle of a new own resource arriving alongside the next multiannual budget rather than being negotiated within it. The Danish presidency circulated a first compromise text in December 2025. Negotiations continued through the spring without resolution.
Producers and retailers press a different argument. The bloc’s advisory committee warned in March 2026 that steep increases risk pushing consumers toward illicit supply, which already accounts for a substantial share of consumption in several member states and funds organised crime rather than health budgets. Enforcement agencies made a similar point about nicotine pouches, where counterfeit product moved faster than regulation.
Public health bodies answer that price remains the single most effective lever on consumption, particularly among younger smokers, and that the illicit-trade case has been made against every excise increase for thirty years while smoking rates fell anyway. Both claims rest on real evidence. The disagreement is about magnitude.
Unanimity gives every capital a veto and every veto a price. Greece, Bulgaria, Italy, Poland and Spain grow tobacco commercially and watch the file with their farm sectors in mind. Sweden defends snus arrangements it negotiated at accession. The Netherlands and Ireland, already at the top of the price range, gain least from higher floors and push hardest for them.
Parliament holds only a consultative role here, which concentrates the outcome in the Council working party on tax questions. Nothing forces a decision this year. The proposal simply waits, and the price gap it was designed to close keeps doing what gaps do.
